Insurance policies of defendants now in play to assist mediation

Consumer class action – Application by applicant for access to documents relating to respondent’s insurance cover – Documents not relevant to any issues in the proceeding, but relevant for mediation purposes – Application granted

In advance of a mediation of the Radio Rentals class action, the applicant sought access to documents relating to the respondents’ insurance position, which was opposed. The documents included the actual insurance policies and related documents. It was not contended by the applicant that the documents were relevant to an issue in the proceeding. Instead, it was contended that the documents were relevant for the purposes of the mediation.

Justice Gleeson granted the applicant the access she sought, pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth) (FCAA).

The documents in question had initially been sought by way of a notice to produce, but her Honour accepted that they could not be sought in that way. Instead, the applicant then sought an order for the production of the documents pursuant to s 33ZF.

Her Honour noted that:

  • similar orders had been made, by consent, in other class action proceedings in the Federal Court, but without any reasons being published;
  • Ryan J in Kirby v Centro Properties Ltd [2009] FCA 695 had declined a similar application;
  • in doing so, however, Ryan J had not addressed the Court’s powers under s 33ZF; further, Ryan J’s decision preceded the introduction into the FCAA of Part VB, which includes the ‘overarching purpose’ provisions.

Her Honour concluded that s 33ZF was wide enough to enable the Court to make the orders sought, and that it was appropriate to do so (at [22]-[26]):

In this case, the proceeding involves claims by persons who entered into “consumer leases” regulated by consumer protection legislation. There is an issue about [the second respondent’s] capacity to meet any judgment that may be obtained against him and there is an imminent mediation. Any settlement that may be achieved will require Court approval including evidence that the applicant’s legal representatives are satisfied that the settlement is fair and reasonable and in the interests of group members as a whole … By para 14.4 of the Class Actions Practice Note (GPN-CA), one of the factors that material filed in support of an application for Court approval of a settlement will usually be required to address is “(g) the ability of the respondent to withstand a greater judgment”.

It is reasonable to think that the prospects of settlement will be reduced if the applicant’s legal representatives are required to assess any settlement offer without information about [the second respondent’s] insurance position.

In all these circumstances, the applicant will plainly be assisted by access to the documents sought, will be at a significant disadvantage in the mediation if she does not have such access and may otherwise be unable to demonstrate that a proposed settlement is fair and reasonable and in the interests of group members as a whole.

I accepted that the production of [the second respondent’s] insurance documents will confer a tactical advantage on the applicant to the detriment of AIG and that the documents are not relevant to an issue in the proceeding. However, balancing those matters against the considerations in favour of production, I was satisfied that an order for production of the documents is appropriate (and likely necessary) to ensure that justice is done in the proceeding.

Case details

Simpson v Thorn Australia Pty Ltd t/as Radio Rentals (No 4) [2019] FCA 1229

  • Federal Court of Australia, Gleeson J, 7 August 2019 
  • Applicant’s Solicitors: Maurice Blackburn;
  • Respondents’ Solicitors: Norton Rose Fulbright / Gillis Delaney / Lander & Rogers;
  • Applicant’s Funder: N/A

Read more about this case on Austlii: Simpson v Thorn Australia Pty Ltd t/as Radio Rentals (No 4) [2019] FCA 1229

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