A Canadian Catholic diocese is locked into a bitter struggle with its insurers over responsibility for historic sexual abuse cases.

The Diocese of London, Ontario, is suing AXA Insurance after it said it wanted the repayment of $10 million paid to the diocese so it could settle claims brought against it by victims of predatory priests.

According to The Star, AXA says the diocese covered up the crimes of paedophile priests by moving them to different parishes, exposing the insurance company to greater financial risk.

AXA cites examples going back to the 1960s, saying in court documents: 'The Diocese of London, consistent with the policies and practices of the Roman Catholic church more broadly, engaged in a practice of concealing reports of child sexual abuse by members of the diocese's clergy, and then assigning the priests in question to different parishes in the Diocese, thereby providing the priests with further opportunity to commit sexual assaults upon children within the new parish.'

The diocese has failed to produce an insurance document it says covered it between 1963 to 1971, while the company says it would have been invalidated anyway by its failure to disclose the abuse.

The case has been going on since 2008, when AXA refused to pay two abuse claims. The diocese is suing for breach of contract and wants AXA to cover 'future claims which counsel for the Diocese asserts are inevitable', according to a 2016 court ruling. The trial will be held in September.

Other Catholic dioceses in North America have also become involved in disputes with insurance companies, leaving them with liabilities of millions of dollars, according to The Star.