Section 54 of the Insurance Contracts Act 1984 - A clearer course

2016 marked the 30th year of operation of the Insurance Contracts Act 1984 (Cth). Section 54 of the Act, whose purpose is to provide circumstances in which an insurer may be precluded from refusing to pay an insurance claim, has been the most litigated provision of the Act in the High Court.

The High Court’s most recent decision in Maxwell v Highway Hauliers Pty Ltd (2014) 252 CLR 590 emphatically resolved a tension as to the proper interpretation of s.54.  Whilst the decision is succinct, it builds upon the significant Australian insurance law jurisprudence in relation to the section and sets a clearer course for the future.  It ensures, after a generation of the operation of the Act, that s.54 will continue to ensure a fairer contractual relationship between Australian insurers and insureds.

For an analysis of the case and its implications:

• Wilson, “Section 54 of the Insurance Contracts Act 1984 (Cth) – A thirty year long haul” (2016) Australian Bar Review 1.