Who pays the legal fees for people caught up in ICAC probes? One director is facing a bill of more than half a million dollars after an insurance company refused his claim.
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In a case that will be watched closely by other business and political figures hauled before the Independent Commission Against Corruption, Newcastle businessman Andrew Poole has taken court action against insurer Chubb after it declined to cover his legal bills.
The ICAC found last year that Mr Poole had acted corruptly by agreeing to "false and misleading" statements being made to the government to support the award of a lucrative Hunter Valley coal licence.
Former Labor mining minister Ian Macdonald was also found to have acted corruptly by issuing the licence in 2008 to Doyles Creek Mining, a company set up by Mr Poole and his business associate Craig Ransley.
The ICAC found Mr Macdonald was motivated to grant the licence – without a tender and against departmental advice – because the company was then chaired by his "mate", former union boss John Maitland.
Sydney silk Alec Leopold told the Supreme Court last week that Chubb should not have to foot the bill for Mr Poole's ICAC legal fees under a directors and officers liability policy because he had failed to disclose crucial information when entering the contract.
The information that should have been divulged included the "close relationship" between Mr Macdonald and Mr Maitland, which "elevated the risk of a formal investigation" into the granting of the licence. Mr Leopold said a relationship of this kind was the "basic fodder" of ICAC investigations.
He said Mr Poole, a former director of Doyles Creek Mining, was prepared to engage in "extremely dishonest conduct in order to gain rights over a valuable state asset".
Justice James Stevenson said he was not aware of the ICAC's findings in relation to the Doyles Creek licence and was deliberately not informing himself of them.
The state government has since cancelled the coal licence, triggering a High Court challenge by listed company NuCoal, which acquired the licence.
A conservative estimate of Mr Poole's legal fees would be more than $500,000. Mr Ransley, his business associate who was also found to have acted corruptly, is likely to have an even higher bill and would be keeping an eye on the proceedings.
It is likely that Liberal Senator Arthur Sinodinos and Obeid associate Nick Di Girolamo – who were on the board of Australian Water Holdings, the subject of another ICAC probe that will report next year – will also seek to rely on directors and officers liability policy to cover their legal costs.
They may be in a better position as the insurance contract likely would have existed before they joined the board. But an exclusion may apply depending on the wording of the contract.
Mr Sinodinos has previously declined to answer whether any third party has provided assistance with his legal expenses.
Mr Macdonald and his one-time political ally, corrupt former minister Eddie Obeid, have received hundreds of thousands of dollars in taxpayer-funded legal assistance.
