Privilege, Litigation and the Loss Adjuster’s
Report - Are you Prepared?
Asian Claims Convention Bangkok
Introduction
> Almost any substantial claim by an insured will prompt the insurers to
appoint a loss adjuster.
> Loss adjusters’ reports inevitably contain sensitive information.
> Are the insurers and brokers and their lawyers the only eyes that will see
your reports?
For whose eyes only?
> Loss adjusters’ reports do not simply set out the facts but address and make
recommendations on:
> reserves;
> repair, replacement and rectification;
> policy coverage;
> Underinsurance;
> Contribution; and
Litigation Privilege - English law
> Documents must be:
> confidential;
> a communication between a lawyer (acting in a professional capacity)
and his client, a lawyer (acting in a professional capacity) and a third party or the client and a third party;
> made for the dominant purpose of litigation; and
Confirmation of Litigation Privilege Under Australian
Law
> The principles in operation in determining litigation privilege are:
> Litigation reasonably contemplated – an objective test
from the point of view of "a reasonable person in the position of the relevant solicitor".
> Dominant purpose –assistance or advice in relation to
the anticipated proceedings.
> This is an objective test.
Ensham Resources Pty limited v AIOI Insurance Company-
Background
> Australian decision on privilege for loss adjuster reports.
> AIOI’s lawyers instructed loss adjusters.
> Privilege was claimed over parts of the 10 reports prepared.
> Ensham claimed that the reports were part of the insurer's normal
investigation into a claim and that they were prepared at a time when the facts were still unknown.
> Reports addressed causation, coverage and policy limits for removal of
The Judgment
> The court agreed with AIOI that the reports were privileged and could not
be disclosed to Ensham.
> Critical factors indicating that litigation was reasonably contemplated:
“the magnitude of the claim and the fact that the two grounds on which the insurer sought to resist the claim were identified from at least
the date of the loss adjuster's retainer; and
the size of the claim and the availability of defenses meant that the circumstances were "of the kind that human experience (and the experience of lawyers) would recognize as being highly conducive to litigation."
Lessons from Ensham Resources Pty limited v AIOI
> Nature of the claim may be sufficient to allow a view to be formed that
litigation is anticipated by an insurer.
> Lawyers instructing loss adjusters can be a significant factor showing
litigation is contemplated.
> Labelling a document privileged is not determinative.
> Privilege can be claimed at an early stage.
> Reports can be sought for a number of reasons, some of which will satisfy
the requirements for privilege.
> If the dominant purpose is in relation to anticipated litigation, litigation
Position in Singapore
> Privilege is a statutory right under the Evidence Act.
> Can apply to advice and to reports.
> Not only communication between lawyers and their clients but also
> “Litigation privilege, contemplates, as well, communications between a
Position in Singapore
> Generally follows the UK/Australian approach.
> Can apply to instructions from lawyers as well as in house lawyers/counsel.
> Best practice in any event would be to communicate to loss adjusters
Position Under Thai Law
The Civil Procedure Code of Thailand ("CPC")
> Privilege can be claimed over documents obtained by a lawyer from their
client in their capacity as the client’s lawyer.
> the court has an absolute discretion to decide if all or part of a document is
privileged.
Thai Law – Disclosure of Loss Adjusters’ Reports
Office of Insurance Commission (OIC) dated 26 June B.E.2552 (2009)
> “a loss adjuster will produce a report and give it to both the insured and
the insurer within 45 days of their appointment as loss adjuster”.
> litigation privilege unlikely to apply to loss adjusters’ reports in Thailand.
Position in Thailand
> loss adjusters’ reports must be provided to both insured and insurer.
> pressure on loss adjusters to ensure that any report issued is not biased and
is balanced?
> Who is your client? And to whom do you report?
> what should be included in an initial report?
Subsequent Reports
> Although Thai law provides that a report must be issued to the insured
within 45 days of being appointed, the law is silent on subsequent reports.
> Unclear whether subsequent reports must be disclosed to the insured.
> This uncertainty in the law may give insurers some scope to keep the
subsequent reports confidential.
> Insurers and loss adjusters should carefully consider the scope and contents
See you in Court!
> Insurers and their lawyers will decide if your report is to be disclosed.
> If it is disclosed, the other parties will have access to it and the loss adjuster
may be required to give evidence in the proceedings.
> Other parties will closely scrutinise your report.
> Examination in chief and/or written (and sworn?) statement.
> Loss adjuster to be cross-examined by the lawyers for the other parties.
In the witness box
> Other parties can retain loss adjusters as their expert witnesses.
> They will assist to prepare cross examination of the other loss adjusters.
> The loss adjusters for the other parties will be looking to identify
inconsistencies, ambiguities and weaknesses in your report and to identify alternative approaches to support the position of their clients.
Multi Jurisdictional Issues
> what if loss occurs in Singapore but policy is subject to Thai law?
> Will a loss adjuster have to submit his report to both insured and insurer
within 45 days?
> If a policy was subject to Thai law, would the OIC rules apply to a loss
occurring outside Thailand?
Conclusions – Will a Loss Adjuster’s Report be
Privileged?
> Was the dominant purpose of your report to assist the insurer in relation to
anticipated proceedings, where litigation was ‘reasonably contemplated’.
> Best practice: ensure that communication between insurers and loss adjusters is
made through lawyers and that reports issued are labeled ‘confidential’.
> For many claims which the insurer reasonably believes will be contentious,
litigation privilege is likely to operate.
> Best practice: ensure that reference is made to the likelihood of litigation in
instructions to the loss adjusters and/or in the first report.
Privilege, Litigation and the Loss Adjuster’s Report - Are
you Prepared?
Speaker profile
Alan Polivnick Partner,
Litigation Group
apolivnick@wfw.com
+66 (0)2665 7805
Bangkok
Alan is a partner in the firm’s Litigation Group with a focus on the aviation, shipping and insurance and reinsurance sectors. He regularly advises brokers, insurers and reinsurers on legal issues, including coverage, liability exposure and claims handling and resolution. Alan also acts for parties looking to invest in the Thai insurance market, including due diligence, setting up insurers and brokers and related regulatory issues. Alan is advising on the 2010 Unrest and the 2011 Floods.
All references to ‘Watson, Farley & Williams’ and ‘the firm’ in this presentation mean Watson, Farley & Williams LLP and/or its affiliated undertakings. Any reference to a ‘partner’ means a member of Watson, Farley & Williams LLP, or a member or partner in an affiliated undertaking, or an employee or consultant with equivalent standing and qualification. This presentation
