Read the full story from the ABC

A number of claims (in excess of 3000) were lodged with the Supreme Court of the ACT just before the limitation period expired after the 2003 Canberra firestorm. That action was commenced by insurers who had paid out following the fires. It appears that the NRMA has now withdrawn from the action but the reasons are not given.

In a paper presented to the 2009 Australasian Fire and Emergency Services Authorities Council/Bushfire Cooperative Research Centre conference held at the Gold Coast I said:

Where the claim is for money damages arising out of property damage the situation is complicated by insurance. In those cases the property owner may have claimed on their insurance policy and the insurer then has the rights of the insured, including the right to sue in the insured’s name. In the litigation before the ACT Supreme Court arising from the 2003 Canberra bushfires there are in excess of 3000 plaintiffs. In fact what is happening is the insurers are seeking to recover damages and their obligation is not to the community, not to the fire service and not to the policy holders. Their primary obligation is to their shareholders and to try and recover funds where they can to maximise their profit and to minimise the impact of the fires on their balance sheet. The question of what they could ‘reasonably expect’ from the fire brigades or the Emergency Services Bureau will not be relevant to their decision to sue.

This has to be remembered when we ask ‘why don’t people accept responsibility for their own actions in preparing for and responding to a fire threat?’ The answer is that even though there is litigation it does not mean that the home owner doesn’t accept that the fire authorities did all that they could reasonably do or that they could or should have done more to prepare themselves. The insured may be perfectly happy with the response but it is their insurer who has decided that bringing a legal action is worth the potential cost.

As noted in the ABC story, the reason why the NRMA have pulled out of this litigation is not given. It may be that the insurer decided to be a ‘good’ corporate citizen or it may be that they thought the chance of winning didn’t justify the cost.

Michael Eburn
11 December 2009