A controversial new WA court rule may force parties mounting legal actions to notify each other and the court who their insurer is.

The new order covering the WA Supreme Court and District Court has raised concerns the information will help plaintiffs decide to run cases if funds from professional indemnity and directors’ and officers’ cover are available, and may lead to demands for details of insurance contracts.

The order relates to “interested non-parties”, or those who provide funding or other financial assistance to a case or who exercise direct or indirect control or influence over the way it is conducted.

Moray & Agnew Perth Partner Phil Keays says the rationale for the new rule is unclear because, unlike a law passed by parliament, it was published without any explanation. But he believes it will apply in most cases to insurers whose policyholders are parties to an action.

He says the onus will be on the parties to a case, rather than their insurers, to notify if an insurer is an interested non-party.

The amendment says the notification must be made as soon as reasonably practicable after the insurer becomes an interested non-party.

“This goes against the traditional view that a party’s insurance arrangements are a private and confidential matter between the party and their insurer,” Mr Keays told insuranceNEWS.com.au.

“A question might also arise as to the precise timing of when an insurer becomes an interested non-party.”

The new rule imposes duties on interested non-parties regarding the actions affecting the conduct of a case.

Mr Keays says London-based underwriters are often reluctant to be identified and there may also be confusion about notification where there is more than one insurer.