Insurance list - Supreme Court of Victoria's Commercial Court

Last week the bar held a CPD seminar with the Honourable Justice Osborne as the guest speaker, in his role as Judge-in-charge of the Commercial Court’s insurance list.

His Honour spoke about two things:

1)        Why commence insurance litigation in the SCV?

2)        How do listings and allocations take place?

Why commence insurance litigation in the SCV?

The Commercial Court has a general list which is not judge managed, but managed by Associate Justices and judicial registrars.

It also has specialist lists managed by judges including the following lists:

• TEC list (technology, engineering, construction)

• Group proceedings

• Tax

• Arbitration

• IP

• Admiralty

• Insurance list (managed by Justice Osborne since October 2023)

 As of last week, there were 667 cases being actively judge-managed in a specialist list.

Choice of forum

Most defendant insurers will not be making a choice about forum.  

The practical reality is that plaintiffs initiating an insurance case in a judge-managed list (whether a company or individual) must reckon with a higher commencement filing fee than the County Court.

An individual filing in a Commercial Court specialist judge-managed list faces a filing fee of $2,390.70 (vs the County Court standard filing fee of $800.20).

A company initiating in a Commercial Court specialist judge-managed list faces a filing fee of $4,781.40 (vs the County Court company filing fee of $1,600.30). Companies with turnover under $200k can apply to the registry for a reduced filing fee.

In cases initiated by insurers, the filing fee is usually of less importance than efficient and high quality conduct of the case by the Court.  

Once a proceeding is underway in the insurance list in the Commercial Court, it is usually “ripe” for efficient, even expedited, case management. This is the major benefit of the specialist insurance list, including the processes and procedures below.

First directions hearing

All cases come up for the first directions reasonably promptly. The Court appreciates that there is usually a long history behind the dispute, a lot of work has been done by the lawyers, and experienced counsel have turned their minds to the central issue or issues in pleadings.  

The Court endeavours, where appropriate, to get a trial date at the first directions hearing and bypass a second directions hearing if possible. At the moment, it is around 15 months from first directions to trial. 

Where there is genuine urgency, the Court will attempt to accommodate parties with an earlier trial date.

Critical documents

At the first directions hearing, the Court will usually order the parties to exchange their critical documents pursuant to section 26 of the Civil Procedure Act. This will often bypass the need for formal discovery.

The Court of Appeal considers the extent of the obligation to disclose critical documents in Mullett v Nixon [2022] VSCA 174 at [82] to [87].  

Most judges will take a broad view of the term ‘critical documents’. If documents have been sent to counsel to prepare pleadings, they are probably critical.  If a party needs to undertake further searches to locate more critical documents, the Court is usually sympathetic to this.

Expedited interlocutory disputes process

The Court remains committed to reducing the time and cost spent on interlocutory disputes. The “two-letter rule” introduced in the new Practice Note SC CC 1 (paragraph 8) is working well. It is the standard practice for most interlocutory disputes.  

The judge will read the two letters and determine what to do next. It may be determined on the papers, or more documents may be requested, or a hearing may be scheduled. Sometimes a judge may call a hearing but not require written submissions as the two letters have set out the parameters of the dispute.

I have previously written about the new Commercial Court Practice Note SC CC 1 here.

Security for costs: The authorities are well known to experienced practitioners. It is expected that there is substance behind any assertions. The Court will usually not require a full set of financial documents (subject to the individual matter). Any counterclaim ought to be drafted and well formulated. Where there is a large dispute or quantum, the Court may ask for more details. Applications may be determined on the papers, or after a hearing. 

The overall outcome is that the Court has been getting through interlocutory disputes faster and cheaper. This is better for the parties, and reduces the burden on the Court.  

Preliminary questions: Dealing and disposing of these first is generally not considered to be a workable way to resolve proceedings. This is the opposite approach to many Federal Court proceedings.  

Outlines of evidence

I have written about this in detail in my previous post here. This remains the Commercial Court’s default preferred, flexible method for the giving of evidence. Outlines are not as detailed as witness statements (which are usually long, costly, inaccurate and/or engineered by lawyers). The Court has had a positive experience with the outline of evidence regime. The finding is that trials are shorter and more efficient.

Using outlines of evidence, witnesses give their evidence (often orally) which is more focussed and relevant than a written witness statement. Outlines also encourage the parties to use and rely upon the documentary evidence: they should be put in chronological order and referred to in the outline of evidence.

A good approach is to have a section of uncontroversial evidence which can be accepted into evidence, and a section of contested evidence for trial.

Trial plan

Estimates of time must be provided for opening submissions, time examining witnesses, and closing submissions. The evidence is expected to follow the time estimates.

Types of cases in the insurance list

• Indemnity disputes. Eg indemnity was granted but there is a dispute about losses within the ambit of the indemnity clause.

• Abandonment of a claim for indemnity under a policy

• Owners corporation cases and other multi-party cases

• Disputes between insurers

• Exclusions and tweaks in policies of insurance

• Building insurance cases (which may go to the TEC list)

• Business interruption cases (eg the Princess Theatre & covid case)

• Many fraud cases are filed. But few, if any, run to trial.

• Most cases that run are about non-disclosure, a legitimate dispute about an indemnity clause, or denial of cover