The legal test case process triggered by declined pandemic-related business interruption claims will head into a third year as the wheels of justice turn slowly and clarity is still sought over the issues.

The High Court will hear oral arguments on whether to grant special leave to appeal on second test case matters, rather than deciding the issues “on the papers”, but it has also indicated a hearing won’t be scheduled before October at the earliest.

The issues in dispute arise from claims for disruptions caused by lockdowns and restrictions in the early months of the pandemic in 2020. Two years have passed and the High Court process could still extend for a while yet.

Looking at the process from here, once a date is set to hear the appeal application, lawyers from both sides will each have 20 minutes to present cases over whether the High Court should take a look at the Full Court decision delivered on February 21.

The High Court justices will likely make their decision on the application that day. If declined, the test case comes to an abrupt end and the Full Court decision stands. If the court accepts the case, it will then take months before the actual appeal hearing is scheduled and a decision later handed down.

The High Court hears appeals in only a small percentage of cases where its views are sought, setting a high bar based on criteria such as whether there’s sufficient importance and public interest. In the 2021 financial year, the high court refused 329 applications, granted 48 and seven didn’t proceed.

In the insurance industry’s first test case last year, on exclusions citing the Quarantine Act, the court rejected the application. But there may be a greater chance of an appeal going forward this time, despite the high threshold.

“They are still up against it to get leave, but I have always thought there was a greater chance that leave could be granted in these applications. There’s more parties, more issues, and they are broader,” Berrill & Watson Principal John Berrill tells insuranceNEWS.com.au.

Ultimately, it could be the second half of next year before a final decision is handed down, based on the track record of appeal timelines.

The High Court 2021 annual report shows that when leave to appeal was granted, 20% of the appeals were then dealt with in three to six months, 49% in six to nine months and 30% in nine-12 months. In 67% of cases judgment was delivered within three months of the hearing, and in all cases within six months.

The Insurance Council of Australia (ICA) started proceedings related to the Quarantine Act issue on August 13 2020 in the first test case. The matter was finally concluded against insurers when the High Court rejected the appeal application in June last year.

The more complex second test case, which considers issues around covid outbreak proximity and the impact of government mandates, first went before the Federal Court in September last year,

Five of ten disputes in the case were appealed to the Full Court, with the result that in the case of nine it was found that the insuring clauses don’t apply, ICA says.

The High Court appeal applications are for three matters: two from policyholders and one from the insurers.

Policyholders have filed applications in The Taphouse Townsville v Insurance Australia and in LCA Marrickville v Swiss Re International, while from the insurers’ side, the appeal is about payment calculations in the event a business interruption claim is accepted.

In Insurance Australia v Meridian Travel (Vic), IAG is arguing JobKeeper should be taken into account, a stance that was accepted by the initial trial judge but not by the Full Court.

As well as the ICA test case, casino group The Star Entertainment is seeking leave to appeal after lower courts found in favour of Chubb and other insurers in its dispute.

Separately, class actions are waiting in the wings as lower courts look toward progress in the High Court applications.

ICA has acknowledged the length of time the process is taking.

“While we understand there is frustration that the matter continues through the courts, we recognise the need for both policyholders and insurers to obtain definitive guidance from the courts as to how relevant business interruption policy wordings are to be interpreted and applied,” ICA CEO Andrew Hall said in March.

That test case legal processes may be a few months away from completion if the High Court rejects an appeal, or it could yet have a long way to run.