![BL-2023-000620 - [2025] EWHC 2465 (Ch)](https://backend.juristeca.com/files/emisores/logo_O3rEzCI.png){kind=logo}
Section 1
:
Master McQuail
The claimant, Mr Tolias, is a neurosurgeon. By this claim Mr Tolias challenges two decisions (the Challenged Decisions) made by the defendant (the MDU) not to grant him discretionary assistance in relation to a clinical negligence clam arising out of surgery that he performed on YL in June 2013.
From 1996 until 2013 Mr Tolias was a member of the MDU.
The MDU provides services to members including arranging “claims made” insurance policies through external underwriters and a right to request discretionary assistance. The right to make such a request survives cessation of membership if, at the time of the event in respect of which assistance is requested, the requesting party was a member. It is thus an occurrence-based right.
On 1 October 2013 the claimant ceased his membership of the MDU and his insurance policy arranged through the MDU and took out indemnity insurance with a broker named PMP. He took out those insurance policies for the year 2013 to 2014 (PMP1) and 2014 to 2015 (PMP2). The policies included a retroactive date which included the date of the surgery on YL.
In January 2014 the claimant received a letter from Stewarts Law together with a form of authority signed by YL to release medical records. Those documents together give a clear indication that Stewarts Law were instructed to at least investigate making a professional negligence claim on behalf of YL against Mr Tolias. In March 2014 Mr Tolias was sent notice of funding by YL’s solicitors.
In June of 2015 the claimant received a letter before action in respect of the 2013 surgery on YL. His insurers declined cover because (i) Mr Tolias had failed to notify YL’s potential claim before incepting PMP1 or PMP2, (ii) such prior circumstances are excluded from cover under each policy and (iii) the claim was subject to indemnity or assistance provided by another defence organisation.
In June or July 2015 Mr Tolias applied to the MDU for discretionary assistance. The request was referred, in accordance with the MDU’s then practice, to a Benefits of Membership Committee (BMC) for a recommendation to be made to the Board of Management of the MDU (the Board). The request was declined. In May 2018 Mr Tolias made a further request via his then solicitors, which was again referred to a BMC for a recommendation to the Board. This request was also declined.
In accordance with the MDU’s practice, on the occasion of each request by Mr Tolias an anonymised document headed “Case Summary” was prepared for consideration by the BMC. The BMC’s recommendation to the Board was recorded in that document and a record of the Board’s decision was in due course added. The copy case summaries concerning the Challenged Decisions in the core hearing bundle were further redacted to remove confidential information.
By letter dated 27 February 2018 Stewarts Law wrote to the MDU and enclosed a letter from Hempsons Solicitors to Stewarts Law dated 5 June 2017. In the letter of 5 June 2017 Hempsons stated that:
“The [MDU] has exercised its discretion not to cover the matter because Mr Tolias had taken out a commercial claims made policy and they take the view that it should have been accepted by the commercial insurer.”
On 5 March 2018, the MDU responded to Stewarts Law’s letter by email and said:
“Hempsons have summarised the situation in their letter you sent to me. No further clarification is required.”
In summary Mr Spearman KC on behalf of the MDU explains that Mr Tolias had “claims made” policies which ought to have answered the claim and
on the basis of what was known at the time of the MDU’s first decision: if there had been no reason for Mr Tolias to report the circumstance prior to leaving the MDU, PMP1 or PMP2 should have answered but for any issue arising from failure to report during the currency of those policies. On the other hand if there had been a reason to report prior to leaving the MDU. Mr Tolias and the MDU lost the benefit of the MDU policy and the request was for discretionary assistance when he had failed to notify the MDU prior to termination; and
on the basis of what was known at the time of the MDU’s second decision: there was a serious incident which the claimant had knowledge of and ought to have reported to the MDU prior to termination of his membership and, if he had done so, the claim would have been covered by the MDU Policy but, Mr Tolias not having done so, deprived Mr Tolias and the MDU of the MDU policy and, had it been reasonable not to have reported prior to termination of membership PMP1 or PMP2 should have had no ground for refusing cover on grounds of non-disclosure of the circumstance.
The key question in the proceedings is whether the decisions were permissible exercises of discretion.
At a CMC hearing on 16 June 2025 I was asked to make decisions about disclosure questions which the parties had been unable to agree. I determined a number of issues during the hearing but reserved judgment in relation to others at the conclusion of the hearing. On 20 June I received a letter informing me that the parties were close to agreeing matters. On 30 June I was told that, although some matters had been agreed, the remaining differences were unbridgeable and that I would need to make decisions on those differences. On 8 July a revised draft DRD was submitted setting out the respective positions of the parties.
The remaining differences between the parties are over the wording of Issues 3 and 4 of the DRD, whether Issue 6 should be an issue for the DRD at all, and a question about one Model C request.
Issue 3 concerns the reasons why the MDU exercised its discretion as it did when considering the claimant’s requests for assistance. Issue 4 concerns the policy or approach of the MDU in considering requests for assistance generally. Issue 6 concerns the reasons for the MDU deciding in about 2017 to cease providing cover for future spinal surgery occurrences. In addition there is a disagreement whether a Model C request for disclosure in respect of Issues 3 and 4 is necessary, as Mr Tolias contends, or whether the relevant documents will be captured by the drafting of Issues 3 and 4.
Dr Fryar, who is the MDU’s professional services director signed a witness statement dated 9 June 2025. In that statement she explained:
the need to respect the confidentiality of third party patients and medical practitioners and the privilege of third parties in the MDU’s documents relating to decisions other than those concerning Mr Tolias as well as the commercial interests of the MDU;
there are 1,059 case summaries for matters referred to the relevant committees in the period 2012 to 2018, and the cost of accessing and assessing all of them is estimated as £80,000. The further cost of review for confidentiality and privilege will depend on the width of the criteria for disclosure and therefore the number answering. The additional cost might be £240,000 if all documents answered. By contrast if the disclosure issue includes a criterion “the potential availability of other insurance covering the alleged circumstance” the estimated costs for sifting the approximately 50 cases involved and considering redactions would be some £15,000;
so far as concerns policy documents the MDU is willing to provide documents evidencing policies or standard approaches to requests for assistance in which the potential availability of other insurance was a relevant factor at the time of the Decisions as well as departures from such policies. She went on to explain that the broader categories of documents sought by Mr Tolias do not fall into categories of documents stored in such a way as to be readily searched. It is accepted that the two documents exhibited to her witness statement entitled “MDU Service Specifications” applicable at the dates of the Challenged Decisions should be disclosed, but they include irrelevant sections which should be redacted.