All News tagged: Insurance Contracts Act

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Insurers can be joined as parties to PIPA claims

Case note: Shapcott v W.R. Berkley Insurance (Europe) Limited & Anor [2015] QDC 102

Personal Injuries Proceedings Act Qld – PIPA – Section 16 PIPA – Insurance Contracts Act – PIPA Regulations – Contribution Notice PIPA 

Background

Mr Gary Michael (Michael) brought a claim for personal injuries against Raymond Shapcott (Shapcott) arising out of a massage and Atlas Profilax treatment.  That claim is regulated by the Personal Injuries Proceedings Act 2002 (Qld) (PIPA).

Shapcott issued a contribution notice under the PIPA to Paul Camac (Camac).  Camac held a policy of insurance with professional indemnity insurer, W.R. Berkley Insurance (Europe Limited (Berkley).  Shapcott had no relevant policy of insurance under which he was the ‘named’ insured.

Berkley denied indemnity to Shapcott under the policy.  Shapcott proposed to issue a contribution notice under the PIPA to Berkley.  Michael consented to issue of the notice but Berkley refused. Shapcott made application to the Court for leave to issue a contribution notice to Berkley.

Issue

The central issue for determination was whether section 16(1) of PIPA was engaged, so as to make the Berkley a ‘contributor’.  Section 16(1) states:

‘A respondent who receives a complying part 1 notice of claim may, within the time prescribed under a regulation, add someone else as a contributor for the purposes of this part by giving the person a written notice (contribution notice)— (a) claiming an indemnity from, or contribution towards, the respondent’s liability’. 

Decision

No authorities were before the Court that had considered the meaning of the word ‘indemnity’ in the context of the PIPA.

As such, the Court considered other parts of the legislation noting that:

  • under section 27(1)(b)(ii) reference is made to an ‘insurer’ as a respondent.
  • under section 11(3) reference is made to the fact that an insurer under a ‘relevant insurance policy’ can ‘indemnify’.

Having regard to the way these terms were used in the legislation, the Court was satisfied that reference to ‘indemnity’ in section 16(1) could include reference to indemnity under a policy of insurance.

Shapcott highlighted that the Uniform Civil Procedure Rules 1999 (Qld) and the Civil Proceedings Act 2011 (Qld) required all matters arising from the same facts to be determined together – so there was no utility in refusing the application.  He also argued it would be of benefit to allow the parties to:

  • make proper investigations.
  • inform themselves of strengths and weaknesses of their cases.
  • participate in a compulsory conference and exchange mandatory final offers.

In a judgment delivered 22 May 2015, Dorney QC DCJ allowed Shapcott’s application.

Considerations

Given this decision, it will be interesting to see how parties manage PIPA claims involving indemnity disputes in the future.  Presumably the approach taken will depend upon the circumstances of each matter and the parties involved.

BOOK A FREE CONSULTATION for advice and information about a personal injury or contribution claim against you by calling (07) 3067 3025 or contact us online.

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Kate DenningInsurers can be joined as parties to PIPA claims
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Managing indemnity disputes after Highway Hauliers

Managing indemnity disputes after Highway Hauliers

Matthew Maxwell v Highway Hauliers – Exclusion Clause Examples – Exclusion Clauses Australia – Exclusion Clauses Negligence – Insurance Contracts Act – Exclusion Clauses Common Law – Exclusion Clauses Common Law – Exclusion Clauses Australian Contract Law 

Case note: Inglis v Sweeney [2015] WADC 34

This was a judgment of the District Court of Western Australia on a preliminary question of law in a personal injury case.

Issue

The issue to be determined was whether an Allianz Sure Cover Plus home insurance policy (Allianz Policy) required Allianz to indemnify its insureds for their liability to the Defendants.

Facts

The Plaintiff, Ms Georgia Inglis (Georgia) (aged 10) alleges that she was run over by a ride-on lawnmower operated by the First Defendant, Mr Stephen Sweeney (Stephen) (aged 11).

Georgia is the daughter of Mr Stuart Inglis and Mrs Linda Inglis (Georgia’s parents).  Mr Stuart Inglis owned the ride-on lawnmower.  Georgia lived with her parents.  Georgia’s parents were named insureds under the Allianz Policy.

It is alleged that on 17 October 2004, Mr James Inglis (James) (aged 12), Georgia’s brother, rode the lawnmower from Georgia’s parents’ house, to the Second and Third Defendants’ house.  The Second and Third Defendants are the parents of Stephen.

Stephen ran over Georgia in a game that involved Georgia being towing behind Stephen on the ride-on lawnmower.  Georgia brought claims against the Defendants.  The Defendants brought claims against Mr Stuart Inglis and Georgia’s brother, James (the Third Parties).  The Third Parties brought a claim against Allianz, seeking indemnity under the Allianz Policy.  Allianz refused indemnity on the basis that the claim by the Third Parties fell within the exclusion under the Allianz Policy because Georgia was a person who normally lived with the insureds.

Allianz Policy

Insuring clause

The Allianz Policy contained the following clause relating to cover for injury to other people:

‘… We will cover your legal liability for payment of compensation in respect of:

  • death, bodily injury or illness…’

Exclusion clause

The Allianz Policy contained an exclusion clause which read:

‘What you are not covered for:

1. We will not cover your legal liability for: …

b. injury to any person who normally lives with you, or damage to their property;’

Findings

The Court found:

  1. The Defendants’ claim against the Third Parties was a claim ‘in respect of’ bodily injury. Because of this, the Defendants’ claim against the Third Parties fell within the scope of the Allianz Policy.
  2. Georgia was a person who normally lived with the insureds, for the purposes of the exclusion clause.
  3. The relevant act for the purposes of section 54 of the Insurance Contracts Act 1984 (Cth) (ICA) was that at the time the accident occurred, Georgia was living with her parents.  This act could not be regarded as being capable of causing or contributing to a loss.
  4. The exclusion clause did not operate to exclude the Defendants’ claim.  The Defendants’ claim was not a claim for the Third Parties legal liability ‘for… injury to any person who normally lives with you.  Rather, it was for a legal liability to contribute towards the Defendants’ liability to Georgia.
  5. Section 54(1) of the ICA applies in respect of the claim.

Managing indemnity disputes

Parties involved in indemnity disputes like this, may consider making application to the Court for determination of whether section 54(1) of the ICA applies to a claim.

If an indemnity dispute can be decided as a preliminary issue, then one party’s trial costs may be avoided altogether, leaving the remaining parties to the claim to focus on settlement negotiations or, the main issues in dispute.

However, the decision to make application to the Court will depend upon a number of factors, including whether a set of facts can be agreed between the parties.

BOOK A FREE CONSULTATION for advice and information about an insurance coverage dispute by calling (07) 3067 3025 or contact us online.

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Kate DenningManaging indemnity disputes after Highway Hauliers
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InDefence covers legal and technical issues in a general way. Changes in circumstances or the law may affect the completeness or accuracy of the information published. InDefence is not designed to express opinions on specific cases, to provide legal advice or to establish a relationship of client and lawyer between Denning Insurance Law and the reader, or any third party. No person should act or refrain from acting solely on the basis of this publication. You should seek legal advice particular to your circumstances before taking action on any issue dealt with in this blog.