Insurance Newsletter
August
2015
INSURANCE
CONSTRUCTION &
ENGINEERING
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Insurers joined as a contributor to a PIPA claim
Mark Brookes, Partner
Joseph Brighouse, Solicitor
Shapcott v W.R. Berkley Insurance (Europe) Limited & Anor [2015] QDC 102
Background
A respondent to a claim made pursuant to the
Personal Injuries Proceedings Act 2002 (Qld) (PIPA)
proposed to join a professional indemnity insurer
(who had declined indemnity) as a contributor to
the claim. The claimant consented to the out of
time contribution notice but understandably, the
insurer did not.
The respondent made an application to the court
for leave to issue the contribution notice to the
insurer out of time.
Decision
Section 16 of the PIPA allows a respondent to add
a contributor by giving that person a contribution
notice claiming an indemnity from, or contribution
towards, the respondent’s liability.
In considering the meaning of the word ‘indemnity’
in s 16, the court was referred to a 2003 decision1
in which it was held:
▪▪ The ground of liability sought to be established
against the respondent as a contributor is
irrelevant to the right of the respondent to add a
contributor under the PIPA;
▪▪ While the primary action must relate to an injury
to which the PIPA applies, s 16 of the PIPA does
not confine the ability to add a contributor to
circumstances where the grounds on which the
proposed contributor is said to be liable must be
in relation to a claim for personal injury (because
if the legislature had intended the opposite, it
would have expressly said so).
Acknowledging that this was a question about which
reasonable minds can differ, Dorney J concluded
that the reference in s 16(1) to ‘indemnity’ can
include an indemnity under an insurance policy
because:
Insurance Newsletter - August 2015
© Carter Newell 2015
insurer in its denial of a liability to indemnify the
respondent.
Leave to issue contribution notice to the insurer out
of time was granted.
Comment
This decision makes clear that a contribution notice
can be given not only to those against whom a claim
can be made, but also those who have an arguable
‘liability’ to contribute to the claim. Accordingly, an
insured to whom indemnity has been declined
may seek to join its insurer to a PIPA claim as a
contributor in its own right.
▪▪ An insurer can be a respondent (in that regard
he noted that s 27(1)(b)(ii) refers to a respondent
that is an insurer of a person for the claim);
▪▪ A respondent can join a contributor, which can
be an entity or person from whom an indemnity
can be claimed;
▪▪ Having all the relevant entities that may have
a liability participate in the PIPA process
supports the main purpose of the PIPA (which
includes the speedy resolution of claims but
also, incongruously, to assist in the ongoing
affordability of insurance);2 and
▪▪ The meaning of ‘indemnity’ in other parts of the
PIPA is consistent with insurance indemnity.
Insurers who are declining indemnity to a PIPA
respondent should therefore be aware that,
despite their view that the policy in question does
not respond and therefore they ought not be liable
to indemnify the insured respondent for its liability
in respect of the claim, there is a possibility they
may be joined to and be required to investigate and
participate in (to some extent) the claim despite
any declinature.
Ridley Agriproducts Pty Ltd v CMAS Consulting Pty Ltd [2003]
QDC 284 [28].
2
Personal Injury Proceedings Act 2002 (Qld) s 4.
1
Authors
Dorney J concluded that the text of s 16 supports
a wider meaning than indemnity as a joint or
concurrent tortfeasor or as a purely contractual
indemnifier (outside the context of insurance).
In considering whether to grant leave to issue the
contribution notice, Dorney J thought there was
utility in enabling all relevant parties to become
apprised of all relevant information concerning the
PIPA claim and enabling at least some negotiation
to take place in which the PIPA claimant is also
apprised of all likely arguments presented by the
Mark Brookes
Partner
P: (07) 3000 8301
E: [email protected]
Joseph Brighouse
Solicitor
P: (07) 3000 8304
E: [email protected]
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© Carter Newell Lawyers 2015
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