The NSW Supreme Court has handed down a significant decision regarding Directors and Officers (D&O) insurance highlighting the importance of clearly expressed intent, particularly when modifying well-accepted policies and where statutory rights are being waived.

The court’s decision, handed down by Her Honour Justice Peden, calls into question some sought-after policy features such as continuity clauses and non-rescindability, while testing the definition of a ‘reasonable settlement’ in the absence of express requirements.

It also squarely points to the effect of the plaintiff’s chosen strategy of suing consecutive D&O insurance towers.

Background context

The plaintiff, CIMIC Group Limited (CIMIC), previously known as Leighton Holdings Limited, was a construction contractor, with D&O liability policies issued by the defendants (comprising the insurers for the relevant policies during FY 2010/2011 and FY 2011/2012).

The claims arose from various criminal and civil proceedings brought against Leighton and its officers for alleged bribery offences after the discovery and disclosure of a file note (Iraq File Note) relating to the Leighton’s bid for a crude oil export facility project in Iraq.

Premium

You need to login to access this

Login

What are CIP Points? About ANZIIF Membership