Roger Traves KC authored this article, published in the Insurance Law Journal. The article examines when a liability insurer is bound by a judgment, default judgment or settlement against its insured. A judgment on the merits is generally conclusive of indemnity, subject to the policy terms. A default judgment not set aside can also establish that the insured is “legally liable”, as in QBE Insurance Ltd v Nguyen. The position on settlements is less clear, as it may not always be sufficient to establish liability. The article also considers the effect of s 41 of the Insurance Contracts Act 1984 (Cth), which protects an insured in circumstances where the insurer will not confirm indemnity, but observes that literal compliance with its terms is required.
The article can be read by clicking here
