A LEADING south-west civil lawyer has urged St Patrick’s Day bushfire victims to seek independent legal advice after saying a no-cost insurance offer will “almost certainly” provide the best outcome.
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Creon Coolahan said his firm did not undertake class action work but had received many inquiries from victims of the devastating bushfires wanting to know whether they should opt out of the class actions that have been initiated in the Supreme Court of Victoria.
Mr Coolahan has a special interest in keeping bushfire victims informed as he grew up in Terang and is highly regarded in the town and district.
He said the other main inquiry he was receiving was about minimising the cost and delay while victims aimed to get back as much of their losses as possible.
Mr Coolahan warned that the class action system of recovering compensation for bushfire victims had seen many receive little, or no, compensation at all in the past.
He said the cost of experts to assist in formulating a claim and uplift fees that can amount to a 60 per cent increase on the Supreme Court Scale of Costs were a significant barrier to achieving just outcomes.
The Standard reported last week that in a recent NSW case involving a bushfire at Mount Victoria there was a settlement in the NSW Supreme Court of $2.6 million but legal fees from Warrnambool’s Maddens Lawyers “substantially exceed” the payout.
The victims received nothing.
Mr Coolahan said media analysis of the reported returns to claimants were variable and often fall well short of compensating bushfire victims for the losses they have suffered.
“Never before have we advocated that victims of any accident, disaster, or injustice rely upon their insurance company to assist them to pursue the path to recovery of compensation,” he said.
“Too often we are approached by clients, especially in the context of transport accident and worker’s compensation claims, who have been left high and dry by insurers.
“In the context of bushfire litigation, however, a recent offer made by the insurer group IAG (which consists of CGU, RACV, WFI, and Lumley – who apparently collectively insure about 78 per cent of the property owners affected by the St Patrick’s Day bushfires - and other insurers, Allianz and QBE (which includes Elders Insurance), warrants serious consideration in our view.”
Mr Coolahan said the offer contained a commitment that those insurers would take action for victims to recover not only the insurance companies’ losses but also the uninsured losses the victims had sustained without charging any legal costs or administration fees (except for specialised loss assessment reports relating to some forms of uninsured loss).
He said recent comments by Justice John Dixon should also provide some comfort when he said: “Lawyers appointed by insurance companies to pursue recovery of insured and uninsured losses arising from the St Patrick’s Day fires have duties to act in the best interests of both the insurer and the insurer’s customers (insured group members). It would be contrary to such duties for such lawyers to act in a way that favoured the interests of the insurer to the detriment of the group member.”
Mr Coolahan said that on the basis of the statements made by the IAG group of companies, Allianz, QBE and Elders, bushfire victims would be “almost certainly more likely to recover more of their uninsured losses by having the insurers take action for them than they would if they participated in the class action”.
“It is important that people who have been devastated by the St Patrick’s Day bushfires seek urgent independent legal advice before deciding whether to continue to remain a member of the class action proceedings that have been launched,” he said.
“If claimants do not ‘opt-out’ they will not be able to avail themselves of the insurers’ offer to represent them free of charge. The opt-out notice is likely to be issued within the next few weeks, giving claimants only a short time to consider their options.”