Allens

Insurance & Reinsurance

Our experienced Insurance & Reinsurance legal team regularly publishes articles and updates - the full list of publications appears below. Our insurance publications provide regular commentary on issues affecting the industry. We also give detailed updates on cases before the courts both in Australia and overseas. If you'd like to be notified when we add new insurance & reinsurance publications to the site, please go to our subscription page to sign up for email alerts or, alternatively, you can subscribe to our RSS feed.

Read about our track record in insurance law.

For an overview of the most important cases and developments in this area, see our series of Annual Review archive.

Insurance & Reinsurance Publications

  • Unravelled: What does the Government's response to the FSI mean for banks?

    6 November 2015

    The short answer is: it depends on which kind of bank you are. The Financial System Inquiry's final report and the Government's response mean a lot for ANZ, CBA, NAB and Westpac, particularly given their significant residential mortgage portfolios. They also mean a lot for Macquarie. As for the rest of the banks, they are likely to see the ramifications for the major banks as their own gain.

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  • Unravelled: Superannuation and the Government's response to the FSI

    6 November 2015

    The Government's response to the FSI's superannuation recommendations is, as with much of the rest of the responses, somewhat safe (and, as a result, arguably disappointing). As with the Inquiry's recommendations, it shifts from the sublime to the ridiculous – on the one hand it deals with the really central question of what our superannuation system is for, to the other of extending choice of fund to the small number of employees who are currently excluded because they are covered by State awards and enterprise agreements. In between, it is going to ask the industry to sort out retirement incomes (with some legislative loosening) and the Productivity Commission to sort out costs and competition.

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  • Unravelled: Government says 'Yes ASIC'

    6 November 2015

    The FSI recommended that the Government 'Introduce an industry funding model for Australian Securities and Investment Commission (ASIC) and provide ASIC with stronger regulatory tools'. This recommendation (No.29) covers two topics that ASIC has pursued on a number of occasions, including in its submissions to the FSI. The first is ASIC's preference to move to an industry funding model; and the second is ASIC's recommendation that penalties under ASIC-administered legislation be increased.

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  • Client Update: All but one: Federal Government issues response to FSI report

    20 October 2015

    The Federal Government today released its long-awaited response to the Financial System Inquiry. The Government says it has accepted all but one of the Inquiry's 44 recommendations released late last year. And this is broadly true, with the only substantial recommendation to be rejected being the recommendation to stop superannuation funds borrowing to invest.

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  • Unravelled: Proposed industry funding model for ASIC

    6 October 2015

    Treasury has released a Consultation Paper seeking comments on a proposed industry funding model for ASIC. Under the proposed model, the costs of ASIC's regulatory activities will be recovered directly from the companies and other entities that are regulated by ASIC – at a direct cost to industry of approximately $260 million. This amount will be collected through a combination of annual supervisory levies (around $196 million) and significant fee increases for fee-for-services activities to reflect ASIC's actual costs of providing specific on-demand services to individual entities. In this article, we look at the proposed model in more detail.

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  • Unravelled: Corporate culture and conduct risk

    6 October 2015

    Regulators, particularly in the UK and Australia, are increasingly interested in corporate culture in the financial services industry, its impact on the integrity of the system, and what the regulators are doing to try to entrench a corporate culture that works for the benefit of consumers and investors. In this article, we look at various aspects of the relationship between corporate culture and conduct risk – convincing Australian financial services organisations that by focusing less on profit, and more on investors' long-term interests and market integrity, they really are helping themselves.

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  • Unravelled: ASIC - A crackdown on corporate culture

    4 September 2015

    Corporate culture, and its role in shaping conduct within the financial services sector, is now clearly at the forefront of ASIC's enforcement agenda. This focus was apparent in ASIC's 2014-2015 strategic outlook, released in October 2014, which identified corporate culture as a key risk driver and poor culture within the financial services sector as a root cause of conduct that threatens the integrity of the financial services industry.

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  • Unravelled: Financial System Inquiry: where are we at?

    5 August 2015

    Federal Treasurer Joe Hockey released the Financial System Inquiry report on 7 December 2014 saying that: '[the] report I release today delivers on our election commitment and lays out a blueprint for the financial system over the next decade.' And he is right – the Government did, as promised, commission an inquiry and the report does set out recommendations for how the financial system 'could be positioned to best meet Australia's evolving needs and support Australia's economic growth'. But the electorate may have hoped for more than a report and a blueprint. Of more interest will be whether the blueprint will be implemented. And here, the Treasurer has been more circumspect.

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  • Unravelled: Broadening approved product lists - would it really achieve anything?

    5 August 2015

    In his report earlier this year on retail life insurance advice John Trowbridge recommended that every advice licensee include at least half of the 13 relevant life insurers on its approved product list. The Assistant Treasurer has since indicated the Government may 'consider measures to widen APLs by 1 July 2016'.

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  • Paper: Insuring against cyber-risks: a changing landscape

    23 July 2015

    As cyber-attacks on Australian businesses increase, many companies are discovering they are not adequately prepared or insured to handle a cyber-attack.

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  • Unravelled: How to avoid anti-money laundering compliance headaches - financial product issues

    3 July 2015

    Issues of securities, interests in managed investment schemes and other types of financial products typically involve a number of 'designated services' under Australia's anti-money laundering and counter terrorism financing (AML/CTF) regime. However, in the midst of preparing governing documents, disclosure documents and negotiating with service providers, it is all too easy for parties to neglect AML/CTF issues when preparing for a product launch. They should not, particularly in light of recent developments on the AML/CTF front.

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  • Unravelled: APRA's assessment of life insurers: 'must try harder'

    3 July 2015

    As an institution, APRA can be partial to bureaucratese. As keen readers of APRA's writings, we sometimes find ourselves asking – what is APRA really saying here? And that is a question worth asking when reading APRA's recent letter to life companies setting out its concerns with group insurance.

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  • Unravelled: Full Federal Court rules against agreed civil penalties

    4 June 2015

    Ecstasy, cocaine and industrial action at a construction site are unlikely subjects for an article on financial services regulation. They are, however, the things that have led to what could be a significant change to the way in which financial services regulators like ASIC and APRA can resolve civil penalty proceedings.

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  • Unravelled: Tax musings

    4 June 2015

    You would need to have been living under a large rock with your hearing aid turned off not to be aware of the current debates raging in relation to tax. But it is hard to sort the wood from the trees or the real facts and issues from all the surrounding noise.

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  • Unravelled: Trowbridge - a bridge too far?

    4 June 2015

    In October 2014, ASIC released its report into retail life insurance advice practices. The findings were pretty grim – with poor advice being more common than good, or even adequate, advice. ASIC said that advisers were motivated by the promise of commissions, not the interests of their clients. Following the ASIC report, the Association of Financial Advisers and the Financial Services Council bravely commissioned a review of the report by a working group chaired by John Trowbridge. They asked Mr Trowbridge to make recommendations on how the industry should respond to ASIC's findings. And he has.

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  • Focus: Timing is everything: Major shareholders exclusions in D&O insurance policies

    15 May 2015

    A recent Victorian Supreme Court decision has resolved a disputed construction of a major shareholder exclusion in a D&O policy in the insurer's favour after considering the broad commercial purpose of these provisions. Partner Andrew Maher and Law Graduate Shelley Drenth report.

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  • Focus: High Court limits proportionate liability regime and expands insurers' liability for costs

    14 May 2015

    The High Court yesterday overturned a decision of the Full Court of the Federal Court and held that if the same loss is caused by both apportionable and non-apportionable claims, proportionate liability does not apply to the non-apportionable claims. The High Court also ordered that the defendant's insurer pay the costs of the appeal, resulting in its total liability being greater than the limit of indemnity under the policy. Partners Malcolm Stephens and Jenny Campbell and Senior Associate Mark Hare examine the decision and its implications.

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  • Client Update: Significant 'blow' for penalties claims

    8 April 2015

    Today the Full Federal Court clarified the law of penalties as it applies to fees. The key development is that, in considering whether the amount of a fee is 'extravagant and exorbitant' compared to the potential costs incurred in dealing with a failure to perform an obligation, the court held that indirect costs could be taken into account. Subject to a likely attempt to appeal to the High Court, this development imposes a substantial hurdle for current and future penalties class actions. Partner Jenny Campbell and Lawyer Alicia Lyons report.

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  • Unravelled: Nudge, nudge, think, think - ASIC and behavioural economics

    1 April 2015

    In 2014, ASIC started promoting the use of behavioural economics in its regulatory activities. Two reports recently released by ASIC provide clues as to how ASIC may try to counteract behavioural biases in the future.

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  • Unravelled: ASIC's enforcement powers may receive a boost

    5 February 2015

    In preparing its Final Report, the FSI has clearly paid close attention to the report of the Senate Economics References Committee's Report into ASIC's performance and its recommendations designed to strengthen ASIC through a combination of better funding, an enhanced regulatory toolkit and higher penalties, with a view to enabling it to be the 'respected and feared' leader desired by the Senate Committee. The impact of the FSI's recommendations is now likely to be the subject of further submissions to the Government before any decisions are taken.

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  • Focus: Public authorities - reduced protection against negligence

    19 December 2014

    In coming to a recent decision, the Queensland Supreme Court has taken a narrow view of a section of that state's civil liability legislation that was designed to limit the liability of public authorities in Queensland. Partner Nicholas Ng and Senior Associate Goran Gelic report on this decision and its implication of greater liability exposure.

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  • Unravelled: Bold and sometimes radical - the final Murray report

    7 December 2014

    The Financial System Inquiry's final report has been released. We haven't tested this with 'Word Cloud', but we think the report can best be encapsulated in the word 'however'. The financial system has held up well, 'however, ...'. And what follows the 'however' is often bold and sometimes radical. There are five chapters and just 44 recommendations - compare this with the Cooper Review's 177 recommendations. But this helps - the messages are clear and the recommendations plain, although much of the implementation is left to the imagination.

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  • Client Update: ASIC seeking feedback on electronic disclosure proposals

    17 November 2014

    The Australian Securities and Investments Commission is seeking feedback on proposals to help facilitate the increased use of electronic means of providing disclosure for financial products and services. The proposals include new class order relief to facilitate the increased use of multimedia product disclosure statements, and revised guidance in Regulatory Guide 221. Partner Marc Kemp and Associate Simun Soljo report.

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  • Unravelled: Risk management - what, if anything, does the 'three lines of defence' model do?

    5 November 2014

    From 1 January 2015, a new 'common' risk management prudential standard will apply to banks, general insurers and life companies and, in many cases, to other companies in the corporate groups in which those institutions sit. Michael Mathieson looks at the 'three lines of defence' model that APRA proposes to adopt in its associated risk management guidance materials.

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  • Unravelled: Should APRA's prudential standard-making powers extend to directors' duties?

    5 November 2014

    In recent times, APRA has been active in prescribing duties for directors of the institutions it regulates. In light of what has happened, it is worth asking: should the question of directors' duties be excluded from APRA's prudential standard-making powers?

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  • Unravelled: Big Data v 'personal advice' - an unequal contest?

    5 November 2014

    There is a contest underway between two heavyweights. In one corner of the ring we have Big Data. In the other corner we have the definition of 'personal advice' in section 766B(3) of the Corporations Act.

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  • Unravelled: The 'Internet of Things' meets financial advice

    5 November 2014

    With financial services providers already taking advantage of the possibilities created by a new tide of internet meta data, we need regulators and a regulatory regime that see the opportunities implicit in the change, and not only the risks.

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  • Client Update: Clues for industry in ASIC'S Strategic Outlook

    24 October 2014

    ASIC's recently published Strategic Outlook outlines its priorities for responding to the key risks it believes will affect investors, and gives some interesting clues into what industry participants can expect from ASIC over the next 12 months, such as more surveillance of insider trading, breaches of continuous disclosure obligations and governance practices. It also provides a warning to the six largest financial institutions that it will be targeting them by focusing on their compliance with high-risk areas of the law. Partners Marc Kemp and Michelle Levy and Overseas Practitioner James Kanabar report.

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  • Focus: Section 54 of the Insurance Contracts Act: Putting insureds in the driver's seat

    16 September 2014

    A recent High Court decision highlights the substantial scope of s54(1) of the Insurance Contracts Act 1984 (Cth) to prevent an insurer from denying cover following an insured's non-compliance with certain terms of an insurance policy. The court confirmed that, in certain circumstances, the section can relieve an insured from the consequences of an act or omission which triggers coverage exclusions and limitations. Partner Andrew Maher, Senior Associate Jonathan Light and Lawyer Brydon Wang report.

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  • Client Update: Another step towards prudentially regulating conglomerate groups

    18 August 2014

    The Australian Prudential Regulation Authority has taken another step towards implementing its prudential framework for the supervision of conglomerate groups. While it has made some new prudential standards that are specific to conglomerate groups and extended some of its existing standards to such groups, it has delayed the commencement of these changes pending the final report of the Financial System Inquiry and the Government's response to it. The Allens Financial Services Regulation team reports.

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  • Unravelled: Retirement phase of superannuation

    8 August 2014

    The Financial System Inquiry's interim report has identified the retirement phase of superannuation as a priority issue that requires change. If the Federal Government decides to implement various policy options to encourage the development of more suitable products, it could result in significant changes to the retirement phase of superannuation.

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  • Unravelled: Increasing ASIC's enforcement powers

    8 July 2014

    In its submission to the Financial System Inquiry, the Australian Securities and Investment Commission has again raised the issue of the penalties that are available to it to punish and deter corporate wrongdoing. ASIC's submission recommends that a 'holistic review' be conducted into the availability and adequacy of penalties available under ASIC-administered legislation.

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  • Client Update: Federal Government announces FOFA changes

    20 June 2014

    The Federal Government announced today that it will press ahead with changes to the future of financial advice provisions, initially by regulation and then by legislation (when it has a more sympathetic Senate). The announcement includes some key changes, including narrowing the proposed general advice exception from the bans on conflicted remuneration for employees of financial services licensees (such as banks). Employees who provide general advice in relation to products issued or sold by the licensee will be able to receive conflicted remuneration, provided that it is not commission. While the announcement will provide some comfort to the industry, it does little to alleviate uncertainty. Partner Michelle Levy and Senior Associate Simun Soljo report.

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  • Unravelled: Disclosure: current complexity, future clarity?

    4 June 2014

    Since the 1996 Wallis Inquiry, disclosure has been at the heart of the regulatory philosophy for the retail financial services sector in Australia. Under the Financial System Inquiry's terms of reference, the Inquiry 'will refresh the philosophy, principles and objectives underpinning the development of a well-functioning financial system' and it is likely this will include a rethink of the role of disclosure. With this in mind, we take a look at the current disclosure regime and consider its likely future.

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  • Unravelled: Will ASIC shift its regulatory focus from disclosure to suitability?

    4 June 2014

    The Financial System Inquiry (inevitably, the 'Murray Inquiry') is the successor of the Campbell Inquiry (1979-1981) and the Wallis Inquiry (1996-1997). Both the Campbell and Wallis reports considered that investors were best protected through disclosure and market integrity rules. Both reports assumed that adequate disclosure would result in efficient markets and efficient capital allocation: caveat emptor ('let the buyer beware').

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  • Unravelled: Superannuation retirement phase - lessons from recent UK annuity changes.

    4 June 2014

    A key risk faced by self-funded retirees is the possibility that their superannuation savings will not last as long as they will. While lifetime pensions and annuities issued by life companies can assist in addressing this risk, there has traditionally been a relatively low uptake of these products by retirees in Australia.

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  • Focus: Proposed reforms to create a consistent proportionate liability regime

    31 January 2014

    In response to concerns about inconsistencies across various state-based jurisdictions, and following a public consultation process, the Standing Council on Law and Justice has released revised draft model legislation to reform Australia's proportionate liability laws. Partner Andrea Martignoni and Senior Associate Andrew Lazzaro report on the proposals.

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  • Focus: The importance of being ... 'businesslike'

    24 July 2013

    The Queensland Court of Appeal has decided that an insured's professional indemnity policy does not cover legal costs incurred in defending an excluded claim. This seemingly obvious and 'businesslike' conclusion was not so clear-cut on the express language of the policy. Partner Andrew Maher reports.

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  • Focus: Post-Bridgecorp decision offers road map to section 6

    12 July 2013

    In a unanimous decision in the first Australian case to deal with the issues raised by Bridgecorp, the New South Wales Court of Appeal has provided important guidance on the operation and scope of section 6 of the Law Reform (Miscellaneous Provisions) Act, including that the statutory charge it creates does not prevent an insurer from advancing defence costs to an insured. Partner Andrea Martignoni, Senior Associate Jonathan Light and Lawyer Theodore Souris report on this significant development.

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  • Linklaters Insights: UK Corporate Update

    5 July 2013

    In the latest UK Corporate Update, our Linklaters alliance partners look at: the European Council to examine proposals to widen non-financial disclosure requirements of large companies and groups to include country-by-country reporting; the EU Commission reaches agreement on Transparency Directive amendments; dematerialisation of shares; and an AGM mid-season review.

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  • Linklaters Insights: Insurance Update

    2 July 2013

    In the latest Insurance Update, our Linklaters alliance partners look at: the FCA launches thematic review of insurers' claims processes; developments in China, Solvency II update and long-term investments; 8th Annual World Takaful Conference, and recent deals.

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  • Client Update: ASIC guidance on litigation funders' obligation to manage conflicts

    26 April 2013

    The Federal Government has recently limited the regulation of litigation funding to an obligation to have adequate arrangements in place to manage conflicts of interest. In the latest chapter in this continuing story, ASIC has released a Regulatory Guide that 'fleshes out' what it considers funders must do to comply with that obligation. Partner Jenny Campbell and Senior Associate Mark Hare report.

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  • Focus: High Court broadens the reach of proportionate liability defences

    5 April 2013

    In its first decision addressing proportionate liability in detail, the High Court has suggested a relatively broad approach to identifying 'concurrent wrongdoers'. This will be welcomed by professional advisers and their liability insurers. Partner Andrea Martignoni, Senior Associate Andrew Byrne and Lawyer Sally Keenan report. 

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  • Focus: Bridgecorp overturned

    21 December 2012

    In a decision that is good news for insurers, directors and other professionals in Australia, the New Zealand Court of Appeal has overturned the first instance decision in Bridgecorp, finding the directors were not prevented from having recourse to their D&O policy for cover for their defence costs. Partner Malcolm Stephens, Senior Associate Jonathan Light and Lawyer David Rountree report on this important development.

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  • Client Update: Significant changes to insurance contracts law proposed

    30 November 2012

    Significant changes to insurance contracts law are proposed in exposure draft legislation released by Treasury. Previously proposed legislation lapsed due to the last federal election and this new Bill retains many of its amending measures, with some refinements. Partner John Morgan and Senior Associate Amanda Taylor explain.

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  • Focus: Court confirms limitation on joinder of insurers

    16 November 2012

    The NSW Supreme Court recently declined to grant leave to join an insurer to proceedings under section 6 of the Law Reform (Miscellaneous Provisions) Act where the 'wrongful act' occurred before the inception of policy. Partner Malcolm Stephens, Senior Associate Jonathan Light and Law Graduate David Rountree report on the court's interpretation of this important section.

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  • Focus: Insurers being joined to proceedings

    5 November 2012

    An insurer declined to indemnify an insured under a professional indemnity policy. The insured was bankrupt and incapable of contesting the insurer's decision. A third party subsequently commenced proceedings against the insured and sought to join the insurer so as to enable it to dispute that insurer's decision not to indemnify the insured. Partner Michael Quinlan, Senior Associate Jonathan Light and Law Graduate David Rountree look at a WA Supreme Court of Appeal case that recently considered the questions that arise in these circumstances.

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  • Focus: Insurance broker's advice half-baked

    17 May 2012

    The Supreme Court of Queensland recently considered the scope of an insurance broker's duty to its client and found that it extends to the exercise of reasonable care and skill. This, however, is to be judged with reference to the terms of the relevant broker's services contract and the circumstances of the case. Partner Michael Quinlan, Senior Associate Gareth Horne and Law Graduate David Rountree report

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  • Focus: ASIC crackdown on use of the terms 'independent', 'impartial' and 'unbiased'

    7 May 2012

    The Australian Securities and Investments Commission has issued a warning to all financial services licensees, after a surveillance operation identified a number of insurance brokers and financial planners who were unlawfully using certain terms. Partner Dean Carrigan, Senior Associate Rhiannon Eagles and Lawyers Tanvir Ahmed and Stephen Lloyd report.

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  • Client Update: Landmark changes to discovery in the NSW Supreme Court

    1 May 2012

    In March of this year, the Supreme Court of New South Wales announced major changes to its approach to discovery that are likely to profoundly alter the conduct of commercial disputes in that court. On 30 April 2012, the Chief Justice and key judges of the court's Equity Division addressed practitioners to further explain and clarify aspects of the new appraoch. Partner Richard Harris and Lawyer Elnaz Nikibin report on the changes, some of the matters being emphasised by the court and some similar themes emerging in the Federal Court

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