Australia: Insurer joined as PIPA contributor - Shapcott v W.R Berkley Insurance (Europe) Ltd & Anor [2015] QDC 102

Last Updated: 16 June 2015
Article by Matthew Baker

Application pursuant to section 16 of the Personal Injuries Proceedings Act 2002 (Qld) (PIPA) to join an insurer as a PIPA contributor.

Brief Facts of the Accident and the PIPA Claim

Gary Michael (the Claimant) sought massage treatment from Paul Camac (Camac) a massage therapist that operated from business premises in Nambour. Camac held himself out, at least by his business card as providing "Atlas Profilax" treatment (a neuromuscular massage technique). Camac initially treated the Claimant with soft tissue massage and referred him to Raymond Shapcott (Shapcott) for Atlas Profilax treatment. The Claimant attended at Camac's business premises and underwent the Atlas Profilax treatment by Shapcott.

There was a dispute as to whether the Claimant's symptoms may have been caused other than by the Atlas Profilax treatment. There were also many disputes about the relationship between Shapcott and Camac particularly in relation to matters which were relevant to insurance cover.

The Claimant initially issued a PIPA Part 1 Notice of Claim against Shapcott and later also issued a PIPA Part 1 Notice of Claim against Camac.

Camac was insured for professional indemnity by W.R. Berkley Insurance (Europe) Limited (Berkley) and indemnity was extended by Berkley to Camac in relation to the Claimant's claim.

Shapcott also sought indemnity from Berkley in relation to the Claimant's claim and indemnity was denied by Berkley.

The Claimant's solicitors consented to the issue of a PIPA Contribution Notice by Shapcott against Berkley however Berkley did not consent to the issuing of the PIPA Contribution Notice against it.

The Application by Shapcott

As Berkley had not consented to it being joined as a PIPA Contributor, Shapcott brought an application seeking an order pursuant to PIPA section 16(1) to join Berkley as a PIPA Contributor claiming an indemnity from Berkley on the basis that he was an insured under the Berkley Policy.

PIPA Section 16(1)(a) provides as follows:-

"16. Respondent may add another person as contributor
  1. A respondent who receives a complying part 1 notice of claim may, within the time prescribed under a regulation, add someone else as a contributor for the purpose of this part by giving the person a written notice (contribution notice) –
    1. claiming an indemnity from, or contribution towards, the respondent's liability; and
    2. ..."

[Emphasis added]

Berkley argued that the context in which the word "indemnity" is used in PIPA section 16(1)(a) is one which, however extensive its width might be, did not include a claim for indemnity under an insurance policy.

In relation to the requirements for the grant of leave to issue the PIPA section 16 Contribution Notice Dorney QC DCJ held:-

Dorney QC DCJ's Decision

Dorney QC DCJ held that the reference to "indemnity" in PIPA section 16(1)(a) can include an indemnity under an insurance policy for the following reasons:-

  1. An insurer can be a "respondent" (see PIPA section 27(1)(b)(ii));
  2. A respondent can join a "contributor" who, or that, can be an entity from whom, or which, an indemnity from liability can be claimed;
  3. The methods by which a main purpose of PIPA can be achieved being appropriate, speedy and early resolution of claims support the concept of all relevant entities having "arguable liability" being made part of the PIPA "pre-court procedures" (see PIPA section 4 which states the main purposes of PIPA);
  4. The meaning of "indemnity" in other parts of PIPA, besides section 16(1)(a), is consonant with insurance indemnity; and
  5. The text of PIPA section 16(1)(a), in context, and upon understanding its purpose, supports a wider meaning than indemnity as a joint or concurrent tortfeasor (whether in tort or pursuant to a concurrent obligation under contract) or as a purely contractual indemnifier (outside insurance).

In relation to the requirements for the grant of leave to issue the PIPA section 16 Contribution Notice Dorney QC DCJ held:-

  1. Prejudice was not a significant factor in relation to Shapcott's application;
  2. The delay in bringing the application had been adequately explained;
  3. There was sufficient evidence to be satisfied, at a "reasonably superficial level", that Shapcott's case against Berkley had "arguable merit";
  4. That there was utility in enabling all relevant parties to become appraised of all relevant information in relation to the Claimant's claims and enabling at least some negotiation to take place in which the Claimant is also appraised of all likely arguments presented by Berkley in its denial of indemnity to Shapcott.

Accordingly, Dorney QC DCJ ordered that leave be granted pursuant to PIPA section 16(2) for the Contribution Notice to be issued by Shapcott against Berkley.

Disclosure of the Insurance Policy

Interestingly, Dorney QC DCJ also dealt with the disclosure obligations of Berkley despite there being no application in relation to disclosure (the issue was incidentally referred to in Shapcott's written submissions) . He noted that:-

  1. The "terms" of the Berkley Policy were before the court only as stated by Berkley's lawyers in their letter to Shapcott's lawyers dated 11 September 2014;
  2. The disclosure provisions in the Uniform Civil Procedure Rules (UCPR) did not apply to Shapcott's application where there had been no order by the court pursuant to rule 209(1)(c) of the UCPR for the proceeding to be started by application;
  3. PIPA contained its own disclosure requirements for procedures proceeding court pleadings (see PIPA section 29 for the duties of a contributor to give documents to a respondent "about the incident alleged to have given rise to the personal injury");
  4. As for legislative provisions such as those in the Insurance Contracts Act 1984 (Cth) (ICA) (see sections 74, 13 and 20) Shapcott's application was not the appropriate forum to decide such questions, especially where there was significant dispute about the ambit of the coverage.

Dorney QC DCJ held that any issue of disclosure was an issue dependent on what occurs in the future with respect to the obligations imposed upon the parties by PIPA.

Conclusion

It is now clear that insurers who deny indemnity to a PIPA respondent can be joined as a PIPA contributor where there is sufficient evidence to be satisfied at a "reasonably superficial level" that the claim for indemnity has "arguable merit".

The question that remains unanswered is in what situations will a Court order an insurer during the PIPA proceedings to disclose the relevant policy schedule and policy wording if they are not already in the possession of the PIPA respondent who alleges they are an insured under the insurance policy.

In our view an application by a PIPA respondent pursuant to PIPA section 29 for the insurer to disclose the insurance policy would not be successful as the insurance policy is not a document "about the incident alleged to have given rise to the personal injury" (see Haug v Jupiters Limited t/a Conrad Treasury Brisbane [2007] QCA 199 which dealt with the similarly worded PIPA section 27 relating to the obligations of respondents to provide documents to claimants). It would certainly be very difficult for a PIPA respondent that alleges they are an insured under an insurance policy to argue why they are an insured without a copy of the relevant insurance policy. A PIPA respondent when bringing an application to join an insurer as a contributor should in our view also give consideration to seeking an order for disclosure of the insurance policy relying on a basis other than the PIPA disclosure obligations such as the ICA or UCPR.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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