Hussain v Medical Defence Union & Anor

Factual and Procedural Background

This opinion concerns an application for pre-action disclosure brought by Plaintiff, a general surgeon, against (1) Company A and (2) Company B, pursuant to CPR 31.16. Plaintiff had a contract with Company A, which operates as a mutual discretionary indemnifier of medical and dental professionals. Company B is authorised and regulated by the Financial Conduct Authority and acts as an agent for Company A.

Legal proceedings were initiated against Plaintiff alleging negligence in surgery performed in December 2012 while in private practice. Company A initially assisted Plaintiff in defending the claim but withdrew assistance on December 28, 2017. Plaintiff requested reconsideration, but the decision was upheld due to an under-declaration of income relevant to the subscription payments for indemnity coverage. Plaintiff had previously confirmed income declarations which were later found to be significantly underestimated. A retrospective increase in declared earnings was refused by Company A's Board.

On June 4, 2019, Plaintiff's solicitors sent a detailed letter before action outlining potential claims, including breach of contractual duty of good faith, claims under the Unfair Contract Terms Act 1977, and estoppel. The letter also requested various documents related to the decision to withdraw assistance and related accounting queries.

Company A and Company B refused to provide the requested documents beyond certain disclosures, including a Case Summary and a key email recording the decision to withdraw assistance. Plaintiff subsequently applied for pre-action disclosure seeking minutes of relevant committee meetings and all documents relating to the withdrawal decision and income under-declaration.

Company A and Company B maintained that no further documents existed or were required to be disclosed, contending that the documents provided were sufficient for Plaintiff to understand their position. They also argued that Plaintiff could obtain further information via a formal Subject Access Request under GDPR.

Legal Issues Presented

1. Whether the conditions under CPR Rule 31.16 for pre-action disclosure are satisfied against Company A and Company B.
2. Whether the court should exercise its discretion to order pre-action disclosure in favour of Plaintiff.
3. Whether Company B is a proper party to the anticipated proceedings.
4. Whether the scope and nature of the documents sought justify pre-action disclosure.
5. Issues relating to costs following the refusal of the application for pre-action disclosure.

Arguments of the Parties

Appellant's Arguments

• The conditions for pre-action disclosure under CPR 31.16 are met as there is a real prospect of litigation involving both Respondents and Plaintiff.
• Disclosure is necessary to understand the decision-making process of the Respondents regarding the withdrawal of assistance, including what was considered and excluded.
• The documents sought are relevant, exist, and are narrowly confined; the request is not a fishing expedition.
• Early disclosure could avoid or narrow proceedings, saving costs and time.
• Time is critical due to ongoing clinical negligence litigation against Plaintiff, with imminent expert report exchange and trial dates.
• The withdrawal of assistance has had significant psychological and financial impact on Plaintiff and his family, potentially leading to bankruptcy and undercompensation of the clinical negligence claimant.
• Without disclosure, Plaintiff risks fighting two costly legal battles without adequate financial support.

Respondents' Arguments

• While the CPR 31.16 conditions are satisfied as to Company A, the court should not exercise discretion to order disclosure; Company B is not an appropriate party as the contract is solely with Company A.
• The Respondents have already provided sufficient information, including key documents (Case Summary and Chairman’s email) explaining the withdrawal decision.
• The withdrawal of assistance was due to Plaintiff’s under-declaration of income, not related to his decision to change indemnifier.
• Disclosure would not result in the restoration of assistance to Plaintiff.
• The application is unnecessary and amounts to a fishing expedition.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first established that the jurisdictional requirements under CPR 31.16(3)(a) to (c) were satisfied: both Respondents are likely parties to ensuing litigation, Plaintiff is also likely to be a party, and the documents sought fall within standard disclosure obligations.

Regarding whether disclosure before proceedings is desirable under CPR 31.16(3)(d), the court found a real prospect that disclosure would help narrow or refine Plaintiff’s claims and potentially save costs. Disclosure might also lead to reconsideration by Respondents or clarify whether litigation is worthwhile.

However, the court emphasized that pre-action disclosure is an exceptional remedy and should be reserved for cases with unusual circumstances beyond the normal run. It considered factors such as the nature of the loss (withdrawal of assistance), clarity of issues, narrow scope of documents sought, and the significant difficulties Plaintiff faced without indemnity support.

The court also weighed factors against disclosure: Respondents had acted reasonably, providing key documents voluntarily; the suggestion that withdrawal was linked to Plaintiff’s change of indemnifier was speculative and unsupported by disclosed documents; Plaintiff had alternative means to obtain documents via a GDPR Subject Access Request; and the circumstances were not sufficiently unusual to justify early disclosure.

Balancing these considerations, the court concluded Plaintiff had sufficient material to assess or commence proceedings and that further disclosure should await the normal disclosure process after proceedings start.

Holding and Implications

The court REFUSED the application for pre-action disclosure.

The direct effect is that Plaintiff will not receive the requested pre-action disclosure documents. Plaintiff retains the option to pursue a Subject Access Request under GDPR to obtain further documents. No new precedent was established, and the decision reinforces the principle that pre-action disclosure is an exceptional remedy requiring unusual circumstances beyond mere litigation prospects and general document requests.

Regarding costs, the court ordered Plaintiff to pay Respondents’ costs on the standard basis, summarily assessed at a proportionate amount of £22,365.50 including VAT. The court rejected indemnity costs and found the Respondents’ resistance to the application reasonable. It also rejected Plaintiff’s request to defer costs payment pending resolution of the clinical negligence claim, emphasizing the Respondents’ right to timely cost recovery.