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Financial Institutions

We understand the industry

Gilchrist Connell has particular expertise advising insurers on claims against Financial Institutions (FIs).  We have advised on claims against banks, asset managers, private equity companies, venture capitalists, hedge funds, superannuation trustees, corporate advisers and stock broking houses.

We have expertise across all sections of an FI policy, including professional indemnity, directors’ and officers’ liability, crime/fidelity and banker’s blanket bond.

We advise insurers operating locally, US insurers and the Lloyd’s market operating on a subscription platform.  We also have expertise advising on the interaction between local and master/global policies.

We understand the FI industry and the unique triggers for claims being made, often following media scrutiny or an economic downturn.  We also understand and have the skills to manage the often competing interests of regulators, the investors and the reputational interests of the FI, together with the interests of insurers.

There is no doubt that FIs are uniquely exposed to risk of litigation in Australia, not just from clients, investors and competitors but also regulators.  With business increasingly being driven online, there is of course now also greater exposure to the risk of cyber-crime.

Our team is skilled at drafting and reviewing wordings and endorsements for FI insurance policies and we provide advice to insurers entering the Australian market to ensure regulatory compliance.

Our experience

  • Acting as defence counsel for a corporate trustee company in two related class actions commenced in the Federal Court of Australia and the NSW Supreme Court by investors in Provident Capital Ltd seeking damages exceeding $100m: Creighton v Australian Executor Trustees Limited [2015] FCA 1137
  • Advising insurers on coverage and acting in the defence of various claims arising from the collapses of Opes Prime and Storm Financial
  • Providing coverage and monitoring advice to insurers in relation to claims against various FIs concerning unit pricing errors and other claims dealing with mispricing of financial products, involving regulators (ASIC and APRA) and the tax office (ATO)
  • Providing coverage advice and acting as monitoring counsel for insurers of FIs who are the responsible entities of registered managed investment schemes in a large number of claims including claims against advisers
  • Providing coverage advice and acting as monitoring counsel in claims against trustees of superannuation funds in respect of a variety of errors made and subsequent losses to unit holders
  • Providing coverage advice in respect of claims by FIs for losses arising out of taxation treatments of financial products and broader investments impacting the trust/fund
  • Providing coverage advice in respect of claims by financial institutions arising from loan agreements and allegations concerning breaches of the Contracts Review Act 1980 (NSW) and the ASIC Act 2001 (Cth) and acting in the defence of the claims
  • Providing coverage advice on large fidelity claims and losses, managing the development and progress of such claims on behalf of insurers and acting in recovery proceedings
  • Acting for reinsurers of a major Australian bank in a denial of indemnity regarding a claim arising out of the collapse of the Bombay Stock Exchange and involving the fraudulent practice of stockbrokers implicating the bank. The bank settled for approximately $350 million.
  • Acting for financial institutions (lenders) in respect of actions brought against them and property valuers concerning negligent and misleading and deceptive valuations and lending practices
  • Defending a large stockbroking house against allegations by over 100 investors of negligence, discretionary trading, covering up losses and margin calls, with the quantum exceeding $26m
  • Acting for a former director of the responsible entity of a managed investment scheme, which was placed into liquidation with a shortfall to creditors estimated to be in excess of $20 million.
  • Acting for the insurers of Strategic Joint Partners Pty Ltd and defending a Federal Court class action brought by ASIC over failed investments by member of the public in the Westpoint group of companies. The claim, along with 8 other class actions, was mediated at the same time.

Click here for our Financial Institutions Limelight articles.

Contact us for further information on how we can assist you.