Steigrad & Ors v Bridgecorp Limited & OrsAuthor : Patrick Boardman, PartnerFinancial Lines
It is not often that a case occurs that has the potential to radically affect the Australian liability insurance landscape, particularly when it is a New Zealand decision. However, the judgment of the High Court of New Zealand in Steigrad & Ors v Bridgecorp Limited & Ors (Bridgecorp), which was handed down on 15 September 2011, could substantially affect all Australian liability policies (not just D&O policies, as mentioned in most commentaries on the judgment to date).
If followed in Australia (and there are persuasive arguments that it should be), the Court’s ruling would arguably be one of the most important decisions relating to Australian liability insurance and could result in insurers:
1. being unable to fund defence costs – which would mean that insureds would be responsible for that expense;
2. having difficulty paying any settlements/judgments pending determination of any prior charges – which again could mean that insureds would initially be liable pending such a determination; and
3. having to review their accounts to see whether they have previously properly accounted for the full amount of the statutory charges.
For more information about the Court’s judgment and its potential implications please contact Patrick Boardman, Partner in our Sydney office.03/11/2011