A court has allowed shareholders pursuing a class action against IAG over Covid-19 disclosures to amend their statement of claim relating to how losses were caused.

The plaintiffs say a greater loss is calculated under their amended statement.

The Victorian Supreme Court has also approved an amendment narrowing the window of time in which the action applies.

IAG did not oppose the narrowing of time but objected to an amendment in the statement of claim about the way causation and loss are pleaded.

It argued the plaintiffs were trying to recover damages for non-disclosure of information that it was not required to disclose.

The action centres on when IAG should have disclosed to the sharemarket possible covid-related business interruption losses of $716 million.

The plaintiffs originally said that under the market’s continuous disclosure obligations, IAG should have acted on March 11 2020, when Covid-19 was declared a global pandemic.

On November 18 2020, the NSW Court of Appeal ruled insurers could not rely on the repealed Quarantine Act to exclude business interruption claims for covid disruptions.

As a result of the test case, two days later, IAG announced it intended to recognise an $865 million post-tax provision, and its shares fell.

The class action argues that if IAG disclosed the information earlier, the share price would have fallen substantially then. The plaintiffs seek compensation for their loss.

The date of the action has changed from March 2020 to June 2020, after the plaintiffs’ lawyers gained information through discovery and expert evidence. This will exclude from the group people who bought shares between March and June.

Read the judgment here.