Loss Adjusters’ reports are only privileged where the reports are prepared in contemplation of litigation and for the purpose of seeking legal advice. But it is not every insurance claim where litigation is likely or reasonably anticipated.

The sole or dominant purpose of the creation of the report need not be for the purposes of the pending or contemplated proceedings. It is sufficient if that is one of the purposes. The intention of the party (for example the insurer) requesting the document is decisive and not the intention of the party (the loss adjuster) creating the document. It is sufficient if there is duality of purpose, for example if the report is intended to be used both to ascertain the cause of the insured event and to quantify the loss, as well as to obtain legal advice regarding the pending or contemplated litigation.

The privilege claim fails if at the time of requesting the report, there was (or objectively was) no pending or contemplated litigation. It doesn’t matter that litigation arose or was contemplated after the report was requested.

In Chard v Old Mutual Insure Limited the insurer unsuccessfully claimed litigation privilege in respect of certain loss adjusters’ reports. On the evidence, at the outset of the claim when the reports were requested, the insurer’s approach was a willingness to co-operate in trying to resolve the claim. The communications and negotiations at the time were not done with the purpose of litigation in mind but to obtain the best deal possible. Timing is important in evidencing contemplation of litigation. The pleadings, said the court, never really addressed the matter of when and why litigation was contemplated nor what areas of advice were sought for comment on by the legal advisors.

Privilege to any loss adjuster or expert report is easily established, by the insurer instructing their attorneys to consider coverage, who will in turn instruct the loss adjusters and experts.