ARTICLE · 25 OCTOBER 2011

Defence costs of insurers under threat

DLA Piper Australia

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NZ interpretation may threaten the ability of insurers in NZ and Australia to advance defence costs.

AustraliaInsurance

Peter Rashleigh

Nitesh Patel

The recent New Zealand High Court decision ofSteigrad & Ors v BFSL 2007 Limited & Ors, High Court of New Zealand CIV-2011-404-611 ("Steigrad Decision") is causing headaches for Australian and New Zealand directors, their insurers and brokers. The decision may have far-reaching implications on the ability of insurers to advance defence costs in certain circumstances.

The Steigrad Decision involves the New Zealand equivalent of section 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) ("Section 6"). The Australian Capital Territory and Northern Territory have similar sections - section 206 Civil Wrongs Act 2002 (ACT) and section 26 Law Reform (Miscellaneous Provisions) Act (NT).

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