Court rejects Toyota Finance, Aioi Nissay Dowa bid to limit class action payouts.
A Victorian court has knocked back a push by an insurer and Toyota's finance arm to limit who can share in any settlement of a large add-on insurance class action.
In a judgment handed down on April 8, 2026, Justice M Osborne of the Supreme Court of Victoria refused an application by Aioi Nissay Dowa Insurance Company Australia (ADICA) and Toyota Finance Australia (TFA) for what is known as a soft class closure order. In plain terms, the defendants wanted group members to register their claims within 12 weeks, or forfeit any share of a pre-trial settlement. The court said no.
For insurers watching how big class actions play out in Australia, the decision matters. It means an insurer defending a large open-class case in Victoria may have to head into mediation without a locked-in count of claimants - and without the early certainty on exposure that usually shapes reserving and settlement strategy.
The case itself is one to watch. The proceeding led by Glenda Walker, known as the Insurance Proceeding, is brought on behalf of consumers who entered into a TFA finance agreement between January 1, 2010 and October 5, 2011 and were sold one or more add-on insurance products - Finance Protection Insurance, Payment Protection Insurance, Finance Gap Insurance, or Extended Warranty Insurance. Those products were issued by TFA and underwritten by ADICA from January 1, 2014 until October 5, 2021. Ms Walker alleges that TFA and ADICA engaged in misleading or deceptive conduct, unconscionable conduct, unfair conduct, unjust transactions, and the provision of inappropriate personal advice in connection with the sale of add-on insurance through car dealerships.
A related proceeding led by Jaiden Petrucci targets flex commissions paid to car dealers on TFA loans. The two cases are being case-managed together, and the numbers are substantial: around 163,890 primary borrowers in the Insurance Proceeding, 519,900 in the Flex Proceeding, and roughly 130,000 who sit in both. A mediation had been scheduled for May 2026.
ADICA's solicitor told the court that insurers cannot engage meaningfully in settlement talks without understanding the extent of their exposure. TFA pointed to the overlap between the two classes and historical claims reaching back to 2010 - some involving borrowers who had already received premium refunds, policy payouts, and remediation payments - as reasons the parties needed hard numbers before mediating.
Justice Osborne was unmoved. The proceedings, he said, were at a comparatively early stage - pleadings not closed, discovery unfinished, no evidence filed, no trial date. Forcing registration now, he found, risked an artificially low participation rate that could compromise the plaintiffs' duty to the class as a whole.
Cost played a part too. The plaintiffs estimated a full registration regime would run between $1.85 million and $2.47 million, against $109,000 to $203,000 for an opt-out notice alone - money that would come out of any eventual settlement.
Citing Fox v Westpac and Preece v Aristocrat Leisure, the judge noted that soft class closure carries an inherent advantage to defendants in minimising group member participation, and that a meaningful mediation can take place without it.
