The case revolved around whether Allianz was required to indemnify the Uniting Church for a raft of claims tied to historical child abuse. The scale of the litigation was immense: the court noted that the value of known claims from 53 third-party claimants alone was at least $40 million. The Uniting Church also sought declarations that could have exposed Allianz to additional liability for at least 139 more potential claimants. If the church had succeeded on all fronts, the total exposure could have exceeded $100 million, though this figure was subject to the limits of the relevant insurance policies.
At the trial’s first instance, the Uniting Church secured a monetary judgment of $839,952.89 and certain declarations of indemnity, including one relating to a specific potential third-party claimant. However, Allianz appealed, and in a sweeping decision, the Full Court set aside most of the primary judge’s orders, leaving the church with only minor relief. The court’s analysis zeroed in on which party could truly be called “successful,” given the magnitude of the claims and the limited outcome for the church.
A central issue was who should bear the legal costs. Allianz argued that it had achieved substantive success and should recover its costs. The Uniting Church countered that it should receive a portion of its costs to reflect its limited wins. The court ultimately sided with Allianz, ordering the Uniting Church to pay 85% of Allianz’s costs at first instance. This included costs related to a reference process ordered by the primary judge on April 27, 2023, and any reserved costs, all on a standard basis.
The judgment referenced the Federal Court of Australia Act 1976 (Cth), the Insurance Contracts Act 1984 (Cth), and the Civil Liability Amendment (Child Abuse) Act 2021 (NSW). While the case touched on the operation of insurance law, the outcome did not hinge on the interpretation of specific policy clauses. Instead, it was the sheer scale of the claims, the conduct of both parties, and the legal principles governing costs that shaped the result.
The court found that although the Uniting Church had achieved some minor success - most notably the $839,952.89 monetary judgment - this was dwarfed by the overall scope of its claims and the relief it failed to secure. The court noted that the monetary award related to payments made to certain claimants who had already settled but later sought increased compensation following legislative changes. Allianz had accepted indemnity for these payments well before the trial concluded, and the court found that the costs associated with these claims were minimal compared to the overall litigation.
For insurance professionals, the decision is a clear signal: in high-stakes, hard-fought institutional claims, the party that achieves substantive success will generally recover the majority of its legal costs. The ruling also underscores the risks and complexities insurers face when defending or contesting large-scale liability claims, especially those involving historical abuse and multiple claimants.
The outcome is a reminder that litigation strategy and cost management are critical in major insurance disputes. Even when a party achieves some relief, if the broader claims are unsuccessful, the financial consequences can be significant. For Allianz, the decision not only limits its liability but also ensures it will not bear the brunt of the legal bill for a sprawling, multi-million-dollar dispute. For the insurance industry, the case stands as a precedent for how courts may approach cost orders in similarly complex, high-value litigation.
