Updated: 27 October 2022

The High Court of Australia has denied special leave for an appeal of a court ruling on the interpretation of certain policy wordings in business interruption (BI) insurance policies. 

This largely brings to a close a second test case involving COVID-related BI insurance claims. 

The second test case was heard initially by the Federal Court, with subsequent appeals heard by the Full Court of the Federal Court. 

Earlier, a first test case decided that insurers could not rely on references to the Quarantine Act in policies to exclude COVID-19 related claims, after that Act was replaced by the Biosecurity Act 2015. 

AFCA is reviewing the effect of these latest developments and will soon contact each small business that has lodged a complaint related to business interruption insurance and COVID-19 which has been on hold at AFCA pending the outcome of the test cases. 

AFCA will now help resolve each of these complaints individually, according to its particular circumstances. 

AFCA will also assess the effect on each of these complaints of class actions which have been filed in the Federal Court in relation to similar issues. 

As at 16 October 2022, AFCA had registered 340 COVID-19 related business interruption insurance complaints, of which 306 remained open.  

As always, AFCA encourages financial firms to seek to resolve complaints through their internal dispute resolution process.  

AFCA and test cases

Under the AFCA Rules, a member financial firm must seek AFCA’s consent to bring a test case about a matter that would otherwise be handled by AFCA as a complaint.

AFCA cannot initiate its own test case and, once it provides approval to the member firm, it is not involved in the filing or running of a test case or any appeals. AFCA does not provide any financial, legal or other support.

One of the factors considered before agreeing to allow a member firm to treat a complaint as a test case is whether there are important issues of law to be decided.

In addition, the financial firm must meet AFCA requirements such as agreeing to pay the complainants’ legal fees incurred in the test case.


Test Case 1

You can read the NSW Court of Appeal judgment in the first test case here.  

Test Case 2

A full copy of the Federal Court judgment, delivered by Justice Jagot on 8 October 2021, and summary is available here:

A full copy of the Full Court judgment, delivered on 21 February 2022, and a summary is available here:

Full Court of the Federal Court Judgment Summary: Second test case

Sorry, we’re currently offline.

Would you like to end your chat with AFCA?

Please bear in mind that your conversation will not be saved.

AFCA chat service terms and conditions

Welcome to our live chat help service.

Please be advised we cannot provide you with financial or legal advice. However, we may be able to refer you to a community legal centre or financial counselling service if you need help.

Our live chat is operated by Genesys Cloud on behalf of AFCA. Any personal information provided in this chat will be captured by both organisations in accordance with their privacy policies, available at www.afca.org.au/privacy and www.genesys.com/company/legal/privacy-policy


We provide consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

Please enter your details to start your chat with an AFCA representative.

Please enter your name
Please enter a valid email address
Please enter a valid phone number

We provide consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

Welcome to our live chat help service.

An agent should be with you shortly.