The High Court refused an application by three plaintiffs to inspect letters exchanged between Eagle Star Life Assurance Company of Ireland Limited and two reinsurers, holding that the correspondence was protected by litigation privilege.
The ruling, delivered by Mr Justice Cooke on 15 March 2013, concerned a discovery dispute in proceedings seeking specific performance of a life insurance contract. The plaintiffs are the legal personal representatives of Noel Rhatigan, who died on 30 August 2004. They claim €2 million under a policy issued in connection with loan facilities obtained by Clydebay Holdings Limited.
The insurer repudiated the policy. In its defence, it asserts that the policy was void or voidable because of alleged misrepresentation and non-disclosure, including matters concerning Mr Rhatigan’s medical history, smoking and family history of cancer. Those assertions were not determined in this ruling.
The plaintiffs sought inspection of letters between the insurer and reinsurer Revios, dated from September 2004 to May 2006, and between the insurer and Partner Re, dated from September 2004 to February 2006. They argued the documents predated any intimation or reasonable apprehension of litigation. The insurer claimed it had anticipated a dispute from late August 2004, when ACC Bank requested a terminal illness claim form, and had begun investigating possible grounds to reject the claim.
The court considered whether litigation was contemplated or reasonably apprehended when the letters were created, and whether preparing for litigation was their dominant purpose. It accepted evidence that the bank’s request raised suspicion because it concerned a terminal illness claim less than three months after Mr Rhatigan had apparently been in good health. The insurer then sought medical information after being notified of his death.
Mr Justice Cooke concluded that, given the substantial benefit and the insurer’s investigation towards a possible repudiation, litigation was sufficiently apprehended. He held that the same principle applied to the communications with reinsurers, who shared the risk. The court found the privilege claim established and refused the inspection order. It did not decide whether the insurer was entitled to repudiate the policy or whether the plaintiffs were entitled to payment.