The Federal Court has held an initial case management hearing for the insurance industry’s second business interruption legal proceedings, setting out a timeline for the next steps.

The first hearing before Chief Justice James Allsop follows the filing last month of documents relating to nine disputed claim denials involving insurers Swiss Re, Guild Insurance, Allianz Australia, IAG and Chubb.

Justice Allsop today said another case management hearing will be held after June 18 to determine the approach to non-agreed facts and whether there are matters in dispute that should be referred to the Full Court.

In the meantime, lawyers for the insureds are due to file concise statement responses by April 23 and provide documents by May 14 setting out more details on their businesses, actions taken due to the pandemic and the financial loss or damage claimed.

By June 18 the parties should finalise statements of agreed facts and a list of issues for determination.

The Insurance Council of Australia (ICA) is also awaiting the outcome of a High Court application to appeal a NSW court decision that found exclusions citing the Quarantine Act and subsequent amendments are not valid in denying cover for COVID-19.

ICA says even if the High Court appeal doesn’t succeed there are other issues concerning the interpretation of business interruption policies that need to be resolved.

The second test case will examine the meaning of policy wordings in relation to the definition of a disease, proximity of an outbreak to a business, and prevention of access to premises due to a government mandate, as well as policies that contain a hybrid of these type of wordings.

Lawyers have warned that the legal issues may not be resolved until well into next year, assuming matters exhaust any appeal processes.

Insurers have agreed they will not rely on any policy time limits to lodge a claim or avoid liability where the policy holders is insolvent, because of the passage of time associated with waiting for an outcome on the two test cases.

The insurance industry is meeting the costs of policyholders in both the test cases.