Avant Insurance Limited v Darshn & Anor

Avant Insurance Limited appealed to the Full Federal Court against a decision of the Federal Court of Australia concerning the interpretation of a professional indemnity insurance policy. The dispute arose from a claim made by a third party against the respondents, Dr. Darshn and his practice, alleging professional negligence. Avant sought to deny indemnity under the policy, leading to the present proceedings.

The central legal issue before the Full Federal Court was whether the policy's exclusion clause, specifically relating to "any claim arising from or in connection with the provision of advice or services in relation to the management of a patient's medical records," operated to exclude cover for the claim made against Dr. Darshn. The court was required to determine the scope and application of this exclusion in the context of the alleged professional negligence.

The Full Federal Court held that the exclusion clause was not applicable to the claim. Their Honours reasoned that the claim against Dr. Darshn was fundamentally based on allegations of negligent medical treatment and diagnosis, not on the management of medical records. While the management of records was a component of the overall medical service, the core of the alleged wrongdoing did not fall within the specific wording of the exclusion. The court applied the principle that exclusion clauses in insurance policies are to be construed strictly against the insurer and in favour of the insured, and that the language of the exclusion did not clearly and unambiguously encompass the nature of the claim made.

The appeal was dismissed, with the Full Federal Court affirming the primary judge's decision that Avant was not entitled to rely on the exclusion clause to deny indemnity.