13 December 2009

2003 Canberra bushfires - NRMA's class action stops

| moneypenny2612
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Last Friday the ABC reported that the NRMA had decided to stop its class action seeking compensation from the ACT and NSW Governments for the Governments’ allegedly negligent bushfire management.

Insurance claims filed after the bushfires for property losses and other damage ran into the hundreds of millions of dollars. The NRMA had joined the class action in July this year and had been representing more than 2000 policy holders out of the nearly 4000 plaintiffs involved in the litigation against the Governments. Class actions run by QBE and Suncorp are continuing, together with a number of individual claims. Trial is set for middle of next year.

The NRMA refused to tell the ABC its reasons for stopping the litigation. It’s a bit surprising that they seem to have withdrawn so soon after joining in (and it’s not like they rushed to join in – the negligence litigation started years ago).

Does anyone know the reasons for the NRMA’s about face?

I assume that the NRMA has already paid its policy holders for their losses caused by the bushfires, and that the class action was really designed for the NRMA to recoup its losses and keep their shareholders happy. But I may be wrong about that.

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Perhaps the ACT government threw a CTP sweetener to NRMA, or threatened to transfer all the ACT’s CTP coverage away from NRMA or somesuch.

Isn’t it NRMA that advertises “un-doing things”

Rawhide Kid No 210:32 am 14 Dec 09

I think its a bit hard to sue any Government for something which is considered (by those Governments) a natural event.

You can sue individuals for perceived negligence, but hasn’t all this been through the Coroners courts already?

And as for the perceived ACT and NSW Governments allegedly negligent bushfire management, and the time that has passed and the “old guard” no longer there, it would be a very if not costly (to both parties) to litigate.

If this does go ahead and the litigates are successful, it would then set a precedent which could lead to very expensive flow on to the community, ratepayers and taxpayers.

Off my soapbox now…….

The NRMA won’t have needed to recoup losses, as they will have passed these costs through to an international insurance underwriter.

They probably figure it isn’t worth the trouble. It’s entirely possible the action will not result in sufficient funds being extracted from the govts to warrant the legal expense.

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