High Court Confirms Documents Prepared In Coverage Investigation Are Privileged

In Rhatigan v Eagle Star Life Assurance Company the High Court found that Eagle Star was not required to provide discovery of documents prepared in anticipation of repudiation of a life insurance policy, as these documents were protected by litigation privilege. A decision to repudiate is so likely to provoke litigation, that the steps taken by an insurer towards making such a decision must necessarily be characterised as steps taken in contemplation of litigation. Communications between the insurer and reinsurer were also protected by privilege.

Case

The case involved a claim for specific performance of a €2 million life insurance policy by the personal representatives of the insured, who was deceased. The policy had been repudiated by Eagle Star on the grounds of misrepresentation and non-disclosure of material facts relating to the insured's medical history.