Reaffirming the Multi-Factorial Test for Extended Disclosure under PD 57AD
Commentary on AmTrust Specialty Ltd v Endurance Worldwide Insurance Ltd (t/a Sompo International) [2025] EWCA Civ 755

1. Introduction

This Court of Appeal decision arises from a disclosure dispute embedded within a high-value, multi-party insurance claim following the collapse of a personal-injury litigation funding scheme. The scheme’s key actors are:

• AmTrust Specialty Ltd (“AmTrust”) – the after-the-event (“ATE”) insurer and Part 20 claimant.
• Endurance Worldwide Insurance Ltd, trading as Sompo International (“Sompo”) – the professional indemnity insurer of the insolvent solicitors’ firms that conducted the underlying claims.
• Novitas Loans Ltd – the litigation-loan provider and principal claimant in the main action.

AmTrust, standing in the shoes of the insolvent solicitors under the Third Parties (Rights against Insurers) Act 2010, seeks an indemnity from Sompo and over £15 million in damages. A five-week preliminary-issues trial is listed for November 2025 focusing on whether the Policies taken out by the solicitors respond to AmTrust’s claims.

At a third Case Management Conference the Deputy High Court Judge (MacDonald Eggers KC) refused AmTrust’s request for disclosure of pre-inception communications between Sompo and its insured firms, holding they were unlikely to be relevant to construction of the Policies. The Court of Appeal (Asplin and Falk LJJ; Underhill LJ) has now overturned that ruling, clarifying the correct approach to extended disclosure under CPR Practice Direction 57AD (“PD 57AD”).

2. Summary of the Judgment

The Court of Appeal unanimously allowed AmTrust’s appeal and ordered disclosure of the contested documents. Key holdings include:

• PD 57AD prescribes a multi-factorial assessment for extended disclosure; there is no “minimum threshold” test of likely relevance.
• A case-management judge must not pre-determine substantive legal issues (here, policy construction) when deciding disclosure.
• Documents expressly referenced in an “incorporation clause” may be probative of policy construction, especially where assignee claimants lack access.
• Fairness and the overriding objective justify levelling the information playing field between insurer and statutory assignee.

3. Analysis

3.1 Precedents and Authorities Considered

• CPR Practice Direction 57AD – paras 6 & 7 (extended disclosure and Issues for Disclosure).
• Practice Note in McParland & Partners Ltd v Whitehead [2020] EWHC 298 (Ch) – guidance on crafting Issues for Disclosure.
• Impact Funding Solutions Ltd v Barrington Support Services Ltd [2016] UKSC 57 – scope of standard SRA-compliant PI cover and exclusions.
• FCA v Arch Insurance (UK) Ltd [2021] UKSC 1 – general principles of contractual interpretation.
• Other insurance cases (Sutherland, Doorway Capital) referenced for context.

The Court distinguished Impact Funding (standard PI policy construction) because it did not address disclosure or policies with incorporation clauses.

3.2 Court’s Legal Reasoning

1. Misapplication of PD 57AD by the first-instance judge.
   The judge wrongly elevated “likely relevance” into a standalone threshold and effectively ruled on policy construction before trial. Asplin LJ emphasised that PD 57AD requires the court to weigh seven proportionality factors; likelihood of probative value is only one.
2. Avoiding premature merits adjudication.
   By deciding the communications could not affect construction, the judge restricted arguments available at trial and usurped the trial judge’s role.
3. Role of the incorporation clause.
   The Policies state that the proposal form and “any other information supplied” “shall be incorporated into this contract”. Whether section 9 Insurance Act 2015 alters that effect is a trial issue, but the clause itself makes the documents prima facie part of the contractual matrix requiring disclosure.
4. Fairness to the statutory assignee.
   Sompo holds the underwriting documents; AmTrust, stepping into the solicitors’ shoes, does not. Equal access is necessary for perceived and actual fairness (Overriding Objective, CPR r.1).
5. Proportionality.
   The documents exist, the financial stakes are high (c. £70 million overall), and collection burden is modest. Hence disclosure is proportionate.

3.3 Potential Impact of the Judgment

• Disclosure Practice: Clarifies that judges must not conflate disclosure decisions with merits and must expressly consider all PD 57AD factors.
• Insurance Litigation: Encourages disclosure of underwriting and pre-contractual correspondence, especially where incorporation clauses appear.
• Statutory Assignee Rights: Strengthens the position of claimants proceeding under the Third Parties (Rights against Insurers) Act by underscoring fairness considerations.
• Professional Indemnity Policies: Signals that even SRA “standard” wordings may be construed in light of bespoke underwriting information.
• Case-Management Culture: Reinforces reluctance to resolve substantive questions at CMC stage, preserving issues for the trial judge.

4. Complex Concepts Simplified

• Extended Disclosure (PD 57AD): A post-2019 regime in the Business & Property Courts replacing CPR Part 31 for most commercial cases. Parties agree a “List of Issues for Disclosure”; the court picks a disclosure “Model” (A–E) tailored to each issue. Search-based models (C, D, E) require reasoned justification.
• Issues for Disclosure vs. Issues for Trial: Disclosure issues are narrower; they identify only those disputes that need documents to be resolved fairly. They are not mini-pleadings.
• Incorporation Clause: Contract wording that imports external documents (e.g., proposal forms, emails) into the policy’s terms. Its continued effect after the Insurance Act 2015 (s.9) can be controversial.
• SRA Minimum Terms: Regulatory baseline wording for solicitors’ PI policies. Insurers must write policies no less favourable to clients/third parties than these terms.
• Third Parties (Rights against Insurers) Act 2010: Allows a claimant with a judgment or claim against an insolvent insured to sue the insurer directly, stepping into the insured’s rights.
• ATE Insurance: After-the-event cover that protects litigants against adverse costs and disbursements; often used with litigation-funding loans.

5. Conclusion

AmTrust v Sompo is a significant procedural authority. It:

• Confirms that under PD 57AD the search for “likely relevance” is not a gatekeeping hurdle but one aspect of a holistic, proportionality-driven inquiry.
• Warns judges against trenching upon the trial judge’s territory when managing disclosure.
• Affirms that incorporation clauses and underwriting material can shape construction of ostensibly standard insurance wordings.
• Promotes fairness where statutory assignees or other outsiders lack access to primary contractual papers.

Practitioners should treat this judgment as a roadmap for arguing (or resisting) extended disclosure. Where policies import pre-contract documents, the Court of Appeal has signalled a clear expectation that such documents will normally be disclosed, ensuring a fully informed construction exercise at trial.