Terms of settlement have been agreed between the majority of St Patrick's Day Terang/Cobden bushfire victims and Powercor.
Most victims opted out of being involved in a Supreme Court class action run by Warrnambool's Maddens Lawyers and joined the unprecedented no-cost offer from an alliance of insurance companies.
The insurance companies have now settled the recovery action on confidential terms.
A spokesman for global insurance giant IAG said: "I am pleased to confirm that we have entered into terms of settlement with Powercor on behalf of our clients, the victims of the Terang bushfire.
"However, the terms of the settlement must remain confidential pending the outcome of the Maddens' class action," he said.
Maddens has not settled and the class action trial is scheduled to start in the Supreme Court at Warrnambool 10.30am on Monday.
Maddens Lawyers class action principal Kathryn Emeny encouraged everyone participating in the class action to attend on Monday.
"Day one of the hearing will commence with the plaintiff's opening submissions which will summarise the plaintiff's case and the evidence that will be given by various witnesses throughout the trial, she said.
"It is expected that up to 20 witnesses will be called to give evidence over the next three to four weeks.
"The commencement of this trial is an important day for the victims of the Terang bushfire. The Judge will be required to determine whether Powercor was negligent in maintaining its electrical assets.
"If the judge rules in favour of the plaintiff, victims will be entitled to compensation for their extensive losses and the suffering that they endured on that catastrophic day in March 2018."
The majority of victims left both the Terang/Cobden and The Sisters/Garvoc class actions after the no-cost offer from insurance companies.
Those left in the class actions run by Maddens will have to foot the firm's legal bills if the actions are successful.
A spokesman for insurer IAG previously said: "A very high proportion of our customers impacted by the Terang and Garvoc bushfires fires have chosen to opt out of the Maddens' class actions.
"That is not surprising given that we have agreed to pursue recovery of our customers' uninsured losses without seeking any contribution to our legal costs.
"This has proven to be very attractive to our customers who were concerned about shouldering the substantial legal costs being incurred in the Maddens' class actions."
Member for Polwarth Richard Riordan said the insurance companies' no cost offer to victims of The Sisters/Garvoc and the Terang/Cobden bushfires was exceptional.
"The insurance companies have made a commercial decision. They have assessed their chances of success in those fires as being very, very good," he said.
There were four main fires in the south-west on St Patrick's Day last year - Terang/Cobden, The Sisters/Garvoc, Camperdown and Gazette bushfires.
Maddens initiated class actions in all four bushfires against Powercor.
In February this year a Supreme Court judge dismissed the Gazette class action claim as "fanciful", which is likely to leave the lead plaintiff liable for Powercor's legal costs - expected to be about $250,000.
The Gazette bushfire was caused by a eucalypt tree falling on to a powerline that ran through a blue gum plantation, sparking the ignition of nearby vegetation.
The cause of the fire was admitted by Powercor.
Justice John Dixon found: "The proposition that Powercor created, or aggravated, the risk of bushfire on St Patrick's Day in the pleaded circumstances - that is, by failing to clear healthy blue gums in a plantation - is fanciful.
"The claim in nuisance that is articulated by (plaintiff) Block is not coherent with the responsibilities and obligations created by the statutory scheme," he found.
Maddens Lawyers and Tim Tobin, QC, ran the class action and will not be paid for their professional services.
The issue of Powercor's costs have been adjourned until a further hearing, but it is expected that those costs will have to be paid by the Gazette class action lead plaintiffs Nicholas and Georgina Block.
Mr Block has previously declined to comment when contacted by The Standard.
The class action involving the Camperdown/Gnotuk bushfire was also discontinued in July with members understood to have walked away from the litigation seen as having little prospect of success.
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