Insurer’s rights to oppose disclosure of insurance policies in class action proceedings

In the substantive class action proceedings, the applicant, Evans, sought payment in the sum of approximately $47.6 million plus interest from the respondent, Davantage, and its holding company. Davantage, however, was in a less than ideal financial position to meet any judgment, with net assets of less than $1 million.

To that end, Evans could potentially seek payment from Davantage’s insurers, AAI Limited, Insurance Australia Limited, Dual Australia Pty Ltd, and Berkley Insurance Co (Insurers).

There were questions as to what the insurance policies covered and whether, in the event of judgment, the Insurers would be required to indemnify Davantage for losses payable to Evans.

Evans sought disclosure of the insurance policies.

The Insurers opposed disclosure of their policies.

Evans faced a roadblock for two reasons. First, insurance policies are not normally subject to production where they are not relevant to the determination of factual issues, save for certain exceptions. Second, an applicant has no right to examine a respondent ahead of trial for the purpose of deciding whether it is worthwhile to agitate the proceedings, save for certain exceptions.

Evans then lodged an application pursuant to, inter alia, section 33ZF(1) of the Federal Court of Australia Act 1976 (Cth)(the Act) (general power of the court to make orders), seeking production of the various insurance policies. The reasoning behind the application was that Evans sought these documents to better inform himself on questions such as:

  1. Whether it is commercially viable to prosecute the proceedings to judgment;
  2. Whether it is appropriate to settle the matter and if so, for what quantum;
  3. Whether it is necessary to take action against any insurer in order to obtain declaratory relief, through an insurance cover available to Davantage.


The Court held that, although the questions raised by Evans are noteworthy in his eyes (effectively as to whether to commence proceedings against the Insurers), the current application is not appropriate. The effect of Evans’ request would be to confer an ‘asymmetric commercial advantage’ and an asymmetric bargaining position in favour of Evans at the expense of Davantage, which would be unwarranted in circumstances where proceedings have not been commenced against the Insurers and the insurance policies are not relevant to the determination of the current facts in issue in the substantive proceedings.

The Court noted that a more appropriate mechanism for Evans, for the purpose of determining whether to commence proceedings against the Insurers, would include preliminary discovery. This mechanism, however, was not invoked by Evans.

This case is positive for insurers as it strengthens the basis for opposing the disclosure of insurance documents and policies in circumstances where the insurer, in a class action, is not a named Plaintiff or Defendant; and where disclosure of the insurance documents and policies would confer an asymmetric commercial advantage in favour of the applicant.