Category: Insurance and Professional Negligence

Defending may include going on the attack (just not this time)

In this Supreme Court decision, Hargrave J confirmed that an Insured’s proactive conduct may constitute reasonable defensive action covered under the Defence Costs extension of a D&O Policy, depending (as always) on the Policy’s wording. However, Mr Hird could not establish that his Federal Court action seeking declaratory relief against ASADA was causally linked to the Defence Costs extension.

Potent antidote to denial: at behest of liquidators, court declares insurer must indemnify directors

Liquidators brought action against company directors under s 588M(2) of Corporations Act 2001 (Cth) – Liquidators sought to join third party insurer after insurer denied liability – Supreme Court had jurisdiction to grant declaratory relief on liquidators’ application – Meaning of justiciable controversy

Federal Court applies s 54 broadly (again)

In Pantaenius Australia Pty Ltd v Watkins Syndicate 0467 at Lloyds [2016] FCA 1 Foster J considered whether one insurer (‘Pantaenius’) could claim contribution from another insurer (‘Nautilus’) regarding damage to a yacht.

The case demonstrates that the courts continue to interpret the scope of s 54 of the Insurance Contracts Act 1984 (Cth) (‘ICA’) broadly, and beneficially to insureds. The case also confirms that a co-insurer can rely on s 54 to establish double insurance for the purpose of obtaining contribution.

Insurers on the hook: High Court holds that insurers of insolvent companies can be joined to proceedings commenced by third parties against those companies

The High Court of Australia has held unanimously[1] that a person who commences proceedings against an insolvent company or a bankrupt individual can join that defendant’s insurer to the proceedings and seek a declaration that the insurer is liable to indemnify the defendant.