Under a statutory workers' compensation indemnity policy, the insurer has no contractual obligation to take over the conduct of the defence or to confirm indemnity before liability is established by judgment or settlement. An insurer's refusal to acknowledge liability to indemnify in advance is not of itself a breach of the policy or a repudiation of the contract. However, the insurer must act in good faith in dealing with requests from the insured regarding conduct or settlement. Whether the insured is dispensed from compliance with a settlement consent condition requires factual findings as to whether the insurer intimated that compliance was useless and whether the insured relied on that intimation. The term 'prejudice' in s 18(1) of the Insurance Act 1902 (NSW) does not require 'irretrievable prejudice'.
The full text is available to signed-in members, including the 13 later cases that cite this judgment.
1 of the 13 citing cases carry a classified treatment. How each court treated it is available to signed-in members.