High Court allows an insured to sue in New Zealand under an Australian policy

An insured takes out an Australian insurance policy with an Australian insurer, governed by Australian law, and with an Australian jurisdiction clause. Can the insured sue under the policy in New Zealand? Yes, says the High Court.

The insured was James Hardie, and it was claiming from the insurer $32 million in legal fees that it incurred in defending two court proceedings in New Zealand. While the jurisdiction clause (as shown in the image) only referred to court proceedings being brought in Australia, the High Court ruled that this clause was not exclusive, and therefore that it did not prohibit the insured from suing in New Zealand.

I’ve seen this many times: parties who agree on a jurisdiction clause, but where the courts have ruled that it is not an exclusive jurisdiction clause. The key takeaway? Review your jurisdiction clause carefully to ensure that it’s exclusive, if that’s what you want to achieve.