A High Court challenge over access to directors’ and officers’ liability (D&O) insurance may not happen, with the Great Southern shareholder class action likely to end in a settlement.

It means Australia and New Zealand remain divided on the matter that started with the Bridgecorp decision in New Zealand.

Parties in Chubb v Moore – a case based on the collapse of plantation company Great Southern – had sought leave to appeal to the High Court over a NSW Court of Appeal decision that upheld directors’ access to defence costs under their D&O policy.

The High Court was due to hear their arguments this month but has been advised of a conditional settlement.

The case has been relisted for mid-June in case the settlement is not reached.

The insurers involved are main policy provider Chubb, with Allianz, Axis, Chartis, Liberty Mutual, Wesfarmers and QBE.

The case has been called “Australia’s Bridgecorp” because it started in response to a New Zealand High Court ruling that creditors of failed property developer Bridgecorp could have priority over directors and executives in accessing D&O policy proceeds.

The NSW Court of Appeal last year rejected the Bridgecorp reasoning.

Litigation in Australia started because some states have legislation similar to that on which Bridgecorp was based.

But TressCox Lawyers Insurance Lead Partner Mark Sheller says the NSW court took a much more limited view of the how the law applies.

Its ruling put the directors’ access to defence costs ahead of the creditors’ claim, he told insuranceNEWS.com.au.

Earlier this month litigation funder Bentham IMF revealed a confidential settlement had been reached on Great Southern but it had to be agreed by half the plaintiffs.