In the decision of Mason v Cashel Financial Services Pty Limited [2021] NSWSC 201 delivered on 9 March 2021, the Supreme Court of NSW confirmed that an indemnity in a contract between an AFSL holder and its authorised representative, entitled the AFSL to recover an insurance excess and deductible incurred to settle a claim brought by a third-party investor arising from the conduct of the representative.

The decision makes clear what has been known for a long time: that a properly drafted indemnity gives a clear right to license holders to recover far reaching losses arising from the negligence and omissions of authorised representatives. 

In a decision of the NSW Supreme Court given on 26 November 2020, the Court has found that AFCA has no jurisdiction to determine a dispute against an AFSL holder where the complaint arises from the conduct of its representative allegedly acting outside their authority.