An appeal of the groundbreaking Bridgecorp judgement on directors’ and officers’ cover (D&O) will start in the New Zealand Court of Appeal next month.

The court has set aside September 5 and 6 to hear the case, which aims to reverse a decision by the NZ High Court that has affected D&O cover in New Zealand and Australia.

The High Court last year ruled that a receiver had first claim on policy proceeds when the claim might exceed the amount of cover, effectively denying company directors and executives funding for legal defence costs and forcing insurers to restructure D&O policies.

The Court of Appeal will hear the Bridgecorp case at the same time as arguments over who is entitled to policy proceeds from the failed carpet manufacturer Feltex, which is subject to a shareholder class action.

Entitlement to D&O policy proceeds is at issue in both cases.