No B2/2000/3210
Neutral Citation Number: [2001] EWCA Civ 585
IN THE SUPREME COURT OF JUDICATURE          
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDER OF HIS HONOUR JUDGE HARRIS QC
(Oxford County Court)

								Royal Courts of Justice
								Strand
								London WC2

								Wednesday, 4th April 2001
B e f o r e:

LORD JUSTICE THORPE

LORD JUSTICE TUCKEY

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CLARK

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ARDINGTON ELECTRICAL SERVICES

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(Computer Aided Transcript of the Palantype Notes of
Smith Bernal Reporting Limited, 180 Fleet Street,
London EC4A 2HD
Tel: 0171 421 4040
Official Shorthand Writers to the Court)
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MR IAIN MILLIGAN QC and MR BEN WILLIAMS (Instructed by Herbert Smith of London) appeared on behalf of the Appellant

MR MARTIN GRANT and MR JONATHAN HOUGH (Instructed by Morgan Cole of Reading) appeared on behalf of the Respondent

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J U D G M E N T
1.	LORD JUSTICE TUCKEY: This is the claimant's appeal with the judge's permission from an order for discovery made by Judge Harris QC in the Oxford County Court on 19th September 2000.
2.	The background to the appeal must first be explained. The Helphire Group which consists of Helphire Group Plc and a number of subsidiary and associated companies run accident car hire and repair schemes, the object of which is to provide motorists who are not to blame for collisions with repairs and replacement cars while they are being carried out without recourse to their own insurers. For this the Helphire customers pay a modest fee. The schemes involve providing credit for the cost of car hire and repair until such costs are recovered from the insurers of the negligent defendant motorist.
3.	Such schemes have already been considered by the House of Lords in Giles v Thompson [1994] 1 AC 142 and Dimond v Lovell [2000] 2 WLR 1121. These cases show that motor insurers have determinedly resisted paying claims the subject of such schemes. The Helphire scheme has met with similar resistance. Last year there were thousands of disputed claims in the county courts throughout the country.
4.	On 25th August 2000 Judge Harris decided a number of test cases with a view to this court hearing any appeal from his decision as quickly as possible. Shortly before the appeal was due to be heard last November, the insurers involved settled with Helphire. The present appeal involved other insurers, Allianz/Cornhill, who have joined forces with Provident. Between them these insurers who have not settled with Helphire are involved, we are told. in over 2000 cases up and down the country. These insurers propose that this case should be treated as a test case like the others decided last year, with a view once more to an expedited appeal to this court if the decision is challenged. However this case cannot be tried until the outstanding appeal about discovery has been resolved.
5.	The claimant, Mrs Clark, used the Helphire schemes. On 2nd May 1999 her car was involved in a collision for which liability is admitted by the defendants who are insured by Allianz Cornhill. The claim is for car hire £575.75, engineer's fee £70.50 and repair costs £1,031.78; a total of £1,783.80. The amended defence alleges that the credit arrangements between the claimants and Helphire constituted a regulated consumer credit agreement which failed to comply with the relevant regulations and are therefore unenforceable. Alternatively, it is alleged that the Helphire schemes which include an insurance are a sham designed to conceal the fact that open-ended credit is being provided to its customers. It is also contended that Mrs Clark has failed to mitigate her loss.
6.	The appeal is concerned with the contention that the amounts claimed are not the amounts actually paid by Helphire on behalf of the claimant. The discovery in question relates to this issue and is directed at the arrangements which Helphire have with repairers and engineers. The repairs to Mrs Clark's car were carried out by a firm called John Oliver Body Repairs in Witney. These repairs were approved by a firm of engineers, H E Milburn (Reading) Ltd. The repairer's invoice addressed to Mrs Clark has been produced in support of her claim together with a credit repair agreement which says it provides the customer with credit so that the repairing garage can be paid before any claim is concluded against the third party. Since the hearing before the judge Helphire have disclosed a master agreement with the repairer concerned under which a Helphire subsidiary, Helphire Finance, agreed to purchase the debts represented by the repairer's invoices to Helphire's customers for 90 per cent of their face value.
7.	The engineering report is addressed to Mrs Clark at Experts Unlimited at an address in Bath. Experts Unlimited is the trading name of another Helphire subsidiary, Specialist Witness Ltd. It issued an invoice to Mrs Clark in the sum claimed. There is no information in the papers to show whether and, if so, when and by whom this invoice was paid other than the fact that it is clear that Mrs Clark herself has not done so.
8.	Under CPR 31.6 Mrs Clark was required to disclose documents on which she relied and which adversely affected her case. Disclosure by non-parties is covered by CPR 31.17 which says it may only be ordered where the documents are likely adversely to affect the other side's case or to support the case of the applicant, and disclosure is necessary to dispose fairly of the claim or to save costs.
9.	On the defendants' application the judge made three orders. First, he ordered that the claimant and/or Helphire (UK) Ltd and/or Angel Assistance (another subsidiary of Helphire) provide to the applicant's solicitors disclosure of all documents they may hold indicating when and what repair and engineer charges were invoiced and paid both by them and to them. He made similar orders directed to John Oliver Body Repairs and to H E Milburn (Reading) Ltd with which we are not directly concerned since it is accepted that the first order directed to Helphire and its subsidiaries will produce such documents as there are.
10.	There was and is no issue about whether such documents exist. But on behalf of the claimant it was argued that they were irrelevant because the claim was hers and what Helphire paid did not matter. The defendants contended that only amounts actually paid by Helphire were recoverable and the documents sought would show what these amounts were and when they were paid and this information might shed light upon whether the schemes were a sham. The judge described this argument as respectable although he made it clear that he expressed this view without detailed consideration of its merits. He continued:
“It cannot be said that it is not a realistically sustainable submission or that it has no reasonable prospect of success. The defendants should be free to pursue the point and in order to do so need to see the documents which show what the Helphire system paid to the repairers and engineers, as well as what they claimed in the claimant's name from the defendants in this respect. Such documents, if the defendants' argument is good, are likely to support the case of the applicant or adversely affect that of the claimant, and in my judgment such disclosure is necessary in order to dispose fairly of the claims. If a defendant's point is sound, then fairness can only be achieved by knowing the relevant figures and the nature of the arrangements.”
11.	A little later he said:
“Either a claimant is entitled to what it seeks or it is not, and a much more reliable judgment about this is likely to be reached by a court in possession of the facts than one operating through a mist of inference or speculation.”
12.	Mr Milligan QC, on behalf of the appellant, submits that the judge was wrong. Neither limb of CPR 31.17 were satisfied because the documents were irrelevant. Under the scheme the claimant owes Helphire the amounts claimed so her loss is quantified as her indebtedness to them for the services they provide. What Helphire pay to provide these services is irrelevant. The measure of Mrs Clark's loss is not what Helphire pays, it is the market value of the repair to the car. Despite the resources at their disposal, the defendants' insurers have produced no evidence that this value is less than the amount invoiced to Mrs Clark and claimed in these proceedings. The arrangement under which Helphire paid 90 per cent of the value of the invoice did not discharge Mrs Clark's debt to the repairer. It was, as the agreement shows, a straightforward factoring agreement under which one Helphire company bought the debt due by Mrs Clark to the repairer. Mr Milligan also showed us passages in Dimond v Lovell which formed the basis for a submission that the defendants' contention is based upon a misunderstanding of what the majority said in that case about the damages recoverable for the cost of car hire.
13.	These are interesting arguments. But the threshold question we have to answer is whether the court should proceed to resolve the issues which they raise for the purposes of determining whether the documents in question are relevant. I do not think that it should. The court ought not to determine disputes of substance in order to decide whether documents are or are not relevant. Here the issue to which the discovery relates is clearly raised in the amended defence and no attempt has been or could be made to strike the pleading out. It will be for the judge at trial to decide the issue based on the evidence (some of which will come from the discovery ordered) and the law including what the House of Lords did or did not say in Dimond v Lovell and the other submissions made to us by Mr Milligan.
14.	I think the judge was right not to enter into the merits of the debate in any detail for the purpose of making the discovery decision. He directed himself as to what CPR 31.17 required before a non-party order for discovery could be made. The documents sought did, in my judgment, satisfy both limbs of the test.
15.	The judge nevertheless had a discretion as to whether to make the orders. I see no basis for saying he exercised it incorrectly. As this is or may be a test case, it is important that the court should have as full a picture as possible as to how the Helphire schemes work. In the earlier test cases the judge regretted that he did not have the full picture because certain documents were not before the court. Furthermore, the third parties affected by the judge's order are either Helphire subsidiaries or participants in the schemes in which they obviously have a commercial interest.
16.	For those reasons I would dismiss this appeal.
17.	I add as a footnote that in the course of his submissions Mr Milligan raised the question whether it was right for the defendants to have relied upon documents disclosed in other cases involving Helphire in support of its application for discovery in this case without the court's permission. He correctly submits that such conduct, if it occurred, would be a contempt of court (Harman v Home Office (1983) 1 AC 280). As I understand it, this is the first time this point has been taken on behalf of Helphire and it is obviously a point that will have to be borne in mind by defendants' insurers in other cases, although I add that in this case the defendants say that they came into possession of the documents through their independent enquiries and not through discovery in other cases. However, the reality of the position is that these are disputes between Helphire and insurers. Although in form each is a dispute between two motorists, if the court is to look at the reality and it is open to defendants' insurers to rely on documents in one case which have been disclosed in another, then it seems to me the same rule should apply to both sides and it would be open to Helphire to protect themselves from what Mr Milligan describes as a war of attrition by alleging abuse of process were they to be faced with a succession of new points being advanced on behalf of the same insurers in a succession of cases.
18.	LORD JUSTICE THORPE: I agree that this appeal should be dismissed for the reasons given by my Lord.
Order: Appeal dismissed