Royal & SunAlliance v. Lombard and Allianz is a Divisional Court decision from last month that slipped by us. It’s of some interest, so better late than never…
RSA is suing Allianz for reimbursement for the amount paid to settle a claim that Allianz had refused to defend. The issue in the case will be whether the claim that RSA settled was within the coverage of Allianz’ CGL or Director’s Liability policies.
RSA sought production of Allianz’ underwriting file. Initially, the Master refused to order production. On appeal to Madam Justice Gertrude Speigel, the appeal was allowed and Allianz was ordered to produce the underwriting file. The basis of the latter decision was that the file “could be relevant” to issues in the action brought by RSA.
On further appeal to the Divisional Court, the court observed that Justice Speigel had applied the wrong test. Before ordering that the underwriting file be produced, she should have been satisfied that it met the “semblance of relevance” test. As the Divisional Court said, this test requires that there be “a present outward appearance of relevance”.
In other words, it’s not enough that the file might turn out to be relevant. It has to be established now, that there is at least some demonstrable “semblance of relevance”.
However, even though the Divisional Court felt that Justice Speigel had applied the wrong test, it did not reverse her decision. The court was satisfied that if the correct test had been used, a semblance of relevance would have been found. So, Allianz was required to produce the underwriting file.