Standing alongside your insured — when an insurer will have a common interest

By Chern Tan and Catherine Hamilton-Jewell

In Marshall v Prescott [2013] NSWCA 152, the New South Wales Court of Appeal considered the issue of common interest privilege and when insurers and insureds are likely to have a ‘self-same’ interest in proceedings.

The court found that a common interest currently in existence will not be lost if it is possible that the parties’ interests may diverge in the future. This is an important decision for insureds and insurers who often need to share legal documents and strategy with each other (and often before final decisions in relation to indemnity are made), allowing both parties a greater level of comfort in doing so.

The court also endorsed a three-step process for determining whether a common interest exists…

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