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Second BI test case in Australia delayed as policyholders need more time: ICA

24th August 2021 - Author: Luke Gallin

The Federal Court of Australia has postponed the start of the second business interruption (BI) test case hearing by one week to provide policyholders with more time to obtain verified government data and expert evidence concerning COVID-19 outbreaks, notes the Insurance Council of Australia (ICA).

covid-19-coronavirus-pandemicIt was announced earlier this year that the Federal Court of Australia had ordered a second BI test case hearing, comprised of nine separate small business claims lodged with the Australian Financial Complaints Authority (AFCA).

The second test case is to determine the meaning of policy wordings in relation to the definition of a disease, proximity of an outbreak to a business, and prevention of access to premises due to a government mandate, as well as policies with a hybrid of these types of wordings.

Initially scheduled for August 30th, 2021, the commencement of this hearing has now been delayed to September 6th, 2021 to September 15th, 2021.

The ICA states that the decision comes as some policyholders have experienced difficulties in “obtaining verified government data and expert evidence concerning the location and prevalence of COVID-19 outbreaks.”

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It’s not expected that this delay will impact the timeframe for any appeal, which has previously been scheduled to be heard by the Full Court of the Federal Court in November 2021.

At a hearing on the postponement, the court agreed with the proposal of the insurers and policyholders that the September 6th 2021 hearing commence on the basis of available evidence. However, policyholders that are taking part in this second BI test case will have the option to present certain additional factual and expert evidence relevant to their claims.

As noted by the ICA, the court’s verdicts in both this and the first test case will provide clarity and guidance for all insures and policyholders, not just those participating in the test cases.

Andrew Hall, Chief Executive Officer (CEO) of the ICA, commented: “Insurers acknowledge that this extra week gives policy holders more time to obtain verified State Government data and expert evidence for their cases while allowing the hearing to proceed on the basis of the available evidence.

“We thank policyholders involved in this second test case for their time and patience in this important test case process.

“Insurance Council members are committed to applying the courts’ rulings in both this and the first test case in an efficient, transparent, and consistent way when determining business interruption claims.

“We encourage all business interruption policyholders who believe they may have a claim and have not already done so, to lodge a claim and gather and keep all necessary documents in support of it.”

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