In Bank of Queensland Ltd v AIG Australia Ltd, 1 the New South Wales Court of Appeal had to determine how many claims had been made against Bank of Queensland Ltd (BOQ) under a civil liability claims made policy with a limit of liability of $40 million for all claims and a retention of $2 million for each claim (the Policy). Petersen Superannuation Fund Pty Ltd, on behalf of 192 investors (including itself), had brought a class action in the Federal Court against BOQ. The investors had been caught up in a Ponzi scheme run by Sherwin Financial Planners Pty Ltd which utilised BOQ bank accounts. It was alleged that the investors’ loss resulted partly from BOQ’s failure to protect the investors’ interests when it became aware of the Ponzi scheme. Following a court-ordered mediation, BOQ agreed to pay $6 million to the investors to settle the class action. Subsequently, BOQ sought to be indemnified in respect of the $6 million settlement sum and the costs of defending the proceeding under the insurers’ Policy, which provides for a retention of $2 million for each claim.
The article can be downloaded here