The Australian High Court has agreed to hear oral arguments supporting the insurance industry’s application to appeal the New South Wales Court of Appeal’s (NSWCA) recent judgement in the country’s first business interruption (BI) test case.
The High Court recently confirmed it will hear arguments on a date to be determined in May or June at the earliest.
The Insurance Council of Australia (ICA) has welcomed the High Court’s decision, stating that insurers look forward to presenting what they believe is a compelling case based on a solid legal framework.
The insurance industry remains adamant that pandemics were not contemplated for coverage under most BI policies, and the Quarantine Act exclusion excludes COVID-19 pandemic-related claims.
“Given this issue relates to a policy exclusion for which insurers have not been collecting premiums, seeking reinsurance or collecting reserves, there is a strong public interest benefit in the High Court hearing oral arguments,” said ICA chief executive officer Andrew Hall.
“Once final rulings have been obtained from the courts, insurers are committed to applying the relevant principles in an efficient, transparent, and consistent way when assessing claims.”
The Federal Court is expediting the second test case, proposed to occur in the first half of September. It also proposed that any appeal must be dealt with in the Full Court of the Federal Court in the first week of November.
According to the ICA, the second test case will determine the meaning of policy wordings in relation to the definition of disease proximity of an outbreak to a business, prevention of access to premises due to a government mandate, and policies containing a hybrid of these types of wording.
The industry will meet the costs of policyholders in the second test case, as it did in the first test case, as well as any appeal.
