Company involved in producing defective vaginal mesh not ordered to disclose assets for potential damages claim

Lord Malcolm

About this case:

• Citation:
  [2022] CSIH 6
• Judgment:
  External link
• Court:
  Court of Session Inner House
• Judge:
  Lord Malcolm

The reclaimer, N, was the pursuer in one of six lead cases against five defenders, including Astora Women’s Health LLC, being managed concurrently by the court. It was argued that it was an abuse of process for the respondent to remain silent on the point, and that the court should make the order to assist the claimants in making an informed decision on whether to proceed against them.

The appeal was heard by the Lord Justice Clerk, Lady Dorrian, sitting with Lord Malcolm and Lord Turnbull. Smith QC appeared for the reclaimer and Elllis QC and McAndrew, advocate, for the respondent.

Special case

It was argued by the reclaimer at first instance that the court’s case management powers extended to giving claimants reassurance, or otherwise, that any decrees they obtained would be enforceable against the defender. The Lord Ordinary concluded that whether to pursue a case to judgment was a matter for the individual pursuers and not for the court, rejecting a subsidiary argument that it would be an abuse of process for an impecunious defender to resist an action.

On appeal, counsel for the pursuer highlighted that Astora had raised the issue by volunteering that it might be unable to meet any decrees. A post-action corporate restructuring had resulted in liabilities for mesh products being transferred from a UK company to Astora, which is based in the USA, thereby creating enforcement difficulties.

It was further argued that the pursuers should not have to wait until the end of the court process to find out whether Astora was “good for the money”, and that for it to remain silent was an abuse of process that the court should not tolerate. While it was acknowledged there was no general right to demand this information, this was an unusual and special case in which an exception should be made.

Counsel for the respondent submitted that insurance was a private matter and opening it to scrutiny would have profound implications for the flow and conduct of litigation. The particular factors relied upon by the reclaimer were not so special or compelling as to justify a departure from the general rule.

Nothing particularly compelling

Delivering the opinion of the court, Lord Malcolm observed: “It is not difficult to understand why a party to a dispute in or headed to court would like to have information as to the other side’s ability by way of insurance or otherwise to meet any liabilities. To date, and subject to the limited exception provided for by the Third Parties (Rights Against Insurers) Act 2010, the general approach has been to respect the privacy of indemnity agreements.”

He went on to say: “In our view no materially different considerations arise when it comes to the case management powers granted in either the mesh claims practice direction or [the court’s general case management powers]. As one would expect they address the management of the action, with the focus on the relevant factual and legal issues.”

Addressing the reclaimer’s access to justice arguments, Lord Malcolm said: “We have little difficulty in rejecting the proposition that the application should be granted in exercise of the court’s inherent power to do what is necessary to discharge its function and to address abuses of the court or its procedures.”

He continued: “While the existence of the power and that it might deal with the conduct of a defender are not in doubt, it is not triggered by reliance on a right to retain private information which is of no assistance to resolution of the matters in dispute. Furthermore any person called as a defender, even if impecunious, is entitled to appear and lodge defences.”

Lord Malcolm concluded: “Counsel recognised that an application of this nature is unusual and contrary to practice. He relied upon the particular factors outlined above as providing special justification. However we see nothing particularly compelling such as might lead to an exception to the general rule. It follows that we need not address the subsidiary submission that the application is unnecessary.”

The appeal was therefore refused, and the case remitted for further procedure.