The COVID-19 business interruption test case could head straight to the NSW Court of Appeal, insuranceNEWS.com.au understands.

The case was listed for a directions hearing at the NSW Supreme Court on Friday, but the hearing was postponed until next Friday.

As previously reported, the Insurance Council of Australia and Australian Financial Complaints Authority (AFCA) agreed to launch the case to resolve uncertainty about some outdated wording in pandemic exclusions.

Some Australian insurers’ policies still include exclusions referring to the repealed Quarantine Act 1908, which was replaced by the Biosecurity Act 2015. As a result, some claimants hope the exclusions will not apply to COVID-19 claims.

The test case consists of two separate small business claims that were lodged with AFCA as part of its dispute resolution process. The claims were with HDI Global Specialty and Hollard. Clyde & Co is representing the insurers and Clayton Utz the businesses.

A spokeswoman for Clayton Utz told insuranceNEWS.com.au the directions hearing was adjourned “by mutual agreement of both parties, as the parties intend to file a motion to have the matter referred direct to the Court of Appeal or, in the alternative, for the matter to be heard expeditiously”.

If there is a high likelihood of appeal a case can be sent straight to the Court of Appeal to save time.

AFCA says it will use the test case outcomes to determine complaints related to business interruption claims and infectious disease exclusions.