The New Zealand Court of Appeal has reserved its decision in the Bridgecorp case concerning access to funds under directors’ and officers’ (D&O) cover.

Parties close to the matter have told insuranceNEWS.com.au they expect a decision within three to five weeks.

The court heard arguments in Wellington last week seeking to overturn last year’s “Bridgecorp decision” by the High Court, which ruled a receiver had first claim on D&O policy proceeds when the claim might exceed the amount of cover.

The decision effectively denies company directors and executives funding for legal defence costs and has forced insurers to restructure D&O policies so the cover is provided.

Three former directors of the failed finance company – Peter Steigrad, Bruce Davidson and Gary Urwin – are appealing the judgement that denied them defence costs under a $NZ20 million ($15.5 million) D&O policy with QBE.

Bridgecorp’s receiver is suing the company’s directors for about $NZ450 million ($350 million).

The appeal was heard along with arguments regarding the Feltex carpet company, whose former directors are facing a shareholder class action and who have a policy with Chartis.

Counsel for Chartis, Michael Ring QC, told Justices Mark O’Regan, Terence Arnold and Rhys Harrison the Bridgecorp directors joined the company in the belief they would be covered by the insurance.

He claimed defence costs were fundamental to the policy, with the cover designed to either prevent legal liability or minimise it, with anything left over going to the claimant.