What happened: The Supreme Court of Western Australia refused an insurer's application for separate legal representation across three defendants in a silica exposure claim involving eleven employers.
Who's involved: AAI Limited (Vero Insurance), Protech Personnel, NRW Holdings, WorkPac, and eight other defendant employers.
What's at stake: Whether insurers covering different periods of a single defendant's exposure can field their own legal teams inside the same proceeding.
Why it matters: Insurers managing overlapping coverage in long-tail disease claims cannot assume dual representation is available - inter-insurer disputes must be resolved outside the plaintiff's case.
Where it stands: Application refused on October 28, 2026, with a two-day mediation listed for the following week.
The worker was in hospital with worsening respiratory symptoms when one of his employers' insurers tried a procedural move that would have added a new layer of complexity to an already sprawling case.
AAI Limited, which trades as Vero Insurance, asked the Supreme Court of Western Australia for permission to field separate legal teams for three of the eleven defendants it insures in a silica exposure claim. The court refused.
The case, decided on October 28, 2026, centres on a worker who alleges he was exposed to respirable crystalline silica across eleven employers between about October 2016 and May 2025, working in civil construction and at iron ore mine sites across the Pilbara, including Koodaideri, Marvel Loch, and Newman. He has been diagnosed with Erasmus Syndrome - a rare occupational condition in which prolonged silica exposure triggers both silicosis and systemic sclerosis, an autoimmune disease that causes progressive scarring of the skin and internal organs. He also alleges progressive pulmonary fibrosis, pulmonary hypertension, and severely restricted lung function.
AAI Limited was on risk for three of those defendants: Protech Personnel, NRW Holdings, and WorkPac. But its coverage did not span the full period of any single defendant's alleged exposure. For Protech, AAI's policy only kicked in from 4pm on June 30, 2019 - CGU Insurance Limited covered the period before that. For NRW, AAI held the workers' compensation policy for the period of direct employment, but a separate insurer covered the earlier period when the worker's labour was supplied through a hire firm. For WorkPac, AAI had accepted liability and instructed solicitors.
AAI argued that these split insurance periods created conflicting interests that made it ethically impossible for one law firm to act for a single defendant on instructions from two different insurers. It wanted Moray & Agnew Lawyers to appear separately in its interests for each of the three defendants, while the other insurers' lawyers handled the remaining periods.
The court accepted it has the power to permit dual representation in exceptional circumstances, drawing on interstate authority including decisions of the New South Wales Court of Appeal and the Queensland Supreme Court. But having the power is one thing. Using it is another.
No actual conflict had crystallised between the insurers - only a potential one. Settlement talks between AAI and the other insurers had not been exhausted. AAI's own lawyers had written to CGU on a confidential basis seeking to discuss how to split responsibility, but no reply came, and no agreement was reached. The court was not satisfied that every other option had been tried.
The usual course, the court noted, is straightforward: if insurers cannot agree on how to share the defence, the insured company gets its own independent lawyer and starts a separate claim against its insurers. That is a dispute between the insured and its insurers. It should not land on the worker's doorstep.
The decision cited a 2011 New South Wales Court of Appeal observation that the assumption insurers are entitled to separate lawyers whenever multiple insurers are involved is a "myth" that "should be exploded."
The timing mattered. The case had been running since February. Pleadings had closed, discovery was done, interrogatories had been answered, and expert reports exchanged. A two-day mediation was listed for the following week. The worker had been admitted to hospital on October 2 after reporting worsening respiratory symptoms, and a report from his treating physician - including whether he was at risk of imminent death - was still pending.
AAI's proposed orders would have required the worker to undergo separate expert assessments arranged by each set of insurers, and to face cross-examination by separately retained counsel on liability, causation, and how to divide responsibility. That additional burden on someone already struggling to breathe weighed against granting the application.
There had also been delay. The proceeding was eight months old. A mediation order had been made back in April. AAI did not file its application until August.
The application was refused. The court will hear the parties on costs. The existing mediation orders already allow insurers to attend as non-party observers, provided they give notice and agree to keep the process confidential - so the refusal did not shut AAI out of settlement discussions entirely. If the matter does not resolve at mediation, provisional trial dates are being held for April and May 2027.
For claims and coverage professionals managing long-tail occupational disease exposures across multiple employers and overlapping insurance periods, the message is clear: sort out your inter-insurer disputes between yourselves, not inside the worker's case.
