Court of Appeal overturns judgment to now allow underwriters access to client documents

The Court of Appeal this week overturned a judgment granting London market brokers permission to withhold documentation from underwriters.

The landmark decision in the case of Goshawk v Tyser & Co effectively reinforces the market view that brokers are contractually bound to provide, on request, placing, claims and accounting documents that the underwriter has already seen.

Lawyers for Tyser argued unsuccessfully that forwarding documents to underwriters was not always in the best interests of the insured - to whom the broker should ultimately be responsible.

According to the ruling, market practice within Lloyd's has long dictated that brokers hold and make available to underwriters the relevant documentation "for the effective performance of the insurance contracts concerned".

Ken Underhill, partner of Reynolds Porter Chamberlain, said: "Often, brokers are suspicious of document requests by underwriters, which they see as being attempts to look for reasons to avoid a policy or repudiate a claim. However, they will now have no choice but to meet these requests."

The judges in the case refused to grant leave for appeal, although Tyser could still petition the House of Lords for a further appeal.

Underhill said: "Because the justification for the decision was grounded on the fact that broker's holding onto documents is established practice, a view supported by Lloyd's, any further appeal seems unlikely."

Jonathan Sacher, senior partner at Berwin Leighton Paisner, represented Goshawk.

He said: "From a practical point of view it is essential that Lloyd's underwriters continue to make copies of all placing and claims documentation presented to them in future."

Tyser was unavailable for comment.