Nest Insurance Consult has lost an appeal against a court decision that backed Resilium Insurance Broking’s use of its client information.

The business was an authorised representative of Resilium in 2020, but Resilium revoked its AR status after finding Nest gave insurers wrong or false postcodes and drivers’ ages, mostly for motor policies. 

Although the parties considered Nest selling its client portfolio, Resilium gave it to another AR – Milestone, trading as Australian Consolidated Insurance.

Nest sued Resilium for breach of contract and sought damages, but last year the NSW Supreme Court dismissed its case. The court was not satisfied the client information was Nest’s “confidential information” and ruled Resilium had to act as it did due to its obligations as a financial services licence holder.  

The court said Nest’s misconduct was the cause of any loss, but it was not satisfied Nest had established it suffered loss, or the amount.

Nest challenged all these findings, but three NSW Appeal Court judges have agreed with the original ruling and awarded costs against Nest.

The judges say Resilium, as the licence holder, was the broker on the policies Nest arranged, and was liable for Nest’s conduct as its AR, whether or not Nest acted within the scope of its authority. Resilium was obliged to take steps to protect the insureds.

Nest had 754 clients with 1095 policies when Resilium ended the agreement, and the court says it is not possible to isolate the insureds who were affected by the misconduct.

Read the judgment here.