“Double insurance” or not? CTP insurer recovers 50% of damages and costs paid to car crash victim from workers compensation insurer

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By Scott Moloney, Partner and Kate Heremaia, Lawyer

In Insurance Australia Limited v Allianz Australia Insurance Limited [2022] ACTSC 75 (14 April 2022), McWilliam AJ of the ACT Supreme Court was asked to determine whether a CTP insurer (NRMA) was able to recover 50% of the settlement amount for common law damages that it had paid to a worker injured in a motor vehicle accident from the workers’ compensation insurer (Allianz).

The facts

The injured worker was travelling in a truck in Canberra being driven by a colleague. The truck collided with the back of another vehicle.  The injured worker made a claim for workers’ compensation payments against his employer (indemnified by Allianz), which was accepted.

The injured worker also made a claim for common law damages against the owner of the truck that he was travelling in at the time of the accident.  The owner of the truck was not the injured worker’s employer, and the CTP policy for the truck was issued by NRMA.

The common law claim for damages was settled by NRMA for $1 million inclusive of previous payments made by NRMA and workers’ compensation payments, plus costs of $100,000.00.

NRMA sought declaratory relief that the injured worker’s employer had double insurance in respect of the injured worker’s claim for loss and damage, and that both NRMA and Allianz shared co-ordinate liabilities. NRMA also sought a further declaration that the workers’ compensation insurer was liable to contribute to NRMA 50% of the settlement amount including costs paid.

The law

The doctrine of double insurance arises when an insured is entitled to indemnity from two different insurers in respect of the same liability. The rationale behind the doctrine is that payment by one insurer benefits the other, and fairness or equity requires that the burden be shared. The central issue for determination in this case was whether both insurance policies covered the same insured for the same risk (that is, liability).

If that was the case, then NRMA and Allianz shared co-ordinate liabilities. Applying the doctrine, this attracts a right to contribution between the insurers.

In her decision, McWilliam AJ reviewed a number of different authorities including the leading High Court authority on the doctrine Albion Insurance Co Ltd v Government Insurance Office of New South Wales [1969] HCA 55; (1969) 121 CLR 342.

From her review of the cases Her Honour determined as follows:

(1) The rationale for the doctrine is fairness and it is designed to balance out what would otherwise be a disadvantage to one insurer and a benefit to another, depending on who the claimant chooses to sue, in circumstances where the same person is insured in respect of the same risk and could have been indemnified under either policy.

(2) For the doctrine to apply, notwithstanding the words used in Albion at 346 (in particular, the reference to the policy holder), it is not essential that the policy holder be the same. What is critical is that the risk that is insured is the same (not in issue here) and that “the insured” is the same.

(3) The time for assessing when the doctrine applies is the time of the accident, not a later date, the point being it does not matter who was actually sued, but who could have been sued.

(4) “The insured” is determined by identifying who is covered under each insurance policy. If there is a potential defendant liable to the claimant who, if sued, could make a claim on either policy (i.e. choose their insurer), double insurance applies.


Applying the law to the facts this case, Her Honour found as follows:

  1. Under the relevant CTP legislation at the time (the now repealed Road Transport (Third Party Insurance) Act 2008 (ACT)), the CTP policy expressly covered the employer of the driver and therefore someone vicariously liable for the acts of its employee, namely, the driver at fault.
  2. The employer could have been sued as a respondent for personal injury damages arising out of the accident. By the operation of the CTP legislation, the employer could have chosen to call upon either NRMA or Allianz to indemnify it, notwithstanding that it did not have a direct contractual relationship with NRMA.
  3. Had Allianz indemnified the employer and paid the settlement sum that NRMA paid, any liability NRMA had to the employer by virtue of CTP legislation would have been relieved.
  4. The doctrine of double insurance applied and accordingly McWilliam AJ found in favour of the CTP insurer awarding the declaratory relief sought by it and interest under the Court Procedures Rules 2006 (ACT) to be calculated from the date the claim was filed.

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