The 2004 COAG inquiry into bushfires described the bushfire cycle as shown below.

The cycle is now repeating itself with the Queensland floods of 2011 and we are now well into ‘accusations and blame’, as reported by the ABC: Qld Government could face massive flood lawsuit

Of course the Queensland government, as with business and citizens are already facing huge costs from those floods and the 2012 floods.  Maurice Blackburn principal Damian Scattini is reported to have said some of the claimants were insured but others were not, or were underinsured.  If the claimants were insured then presumably it will be their insurance companies who will sue exercising their right of ‘subrogation’.  That right means if you claim on an insurance policy, the insurer is given all your rights, and may seek to recover whatever they paid out on the claim.  That right means that they get to sue not in their own name, but in your name – that is what happened after the 2003 Canberra fires and I’ve often wondered if many of the people named as plaintiffs in that case realised that there was legal action in their names.

Following the 2011 Perth fires, insurers have also started litigation in the names of their policy holders; see  story ‘Insurers sue over fires’ from WA Today (10 October 2011).  In that story one person is quoted as saying ‘… most people in the area would not want to be part of the legal action. “My name should not be on there, I’d be absolutely spewing if it were.”  Regrettably for the insured, they have no say in the matter.  They don’t get to direct their insurance company and their consent is not required for legal action to be brought in their name.

For those that were uninsured we may be tempted to say ‘you live by a river, you take the risk’ but as post event inquiries have revealed, flood and flood insurance are not concepts that were easiliy defined or understood.  We can understand why the uninsured may feel they need to seek compensation in this sort of claim because that is the only way they can recover any of their losses.

The chilling side effect however, is that yet again government employees may feel that they are unwilling to take on positions of significant responsibility because of the tendency of these proceedings to focus on personal blame – it was the engineers fault, rather than systemic issues.

We are told that ‘Ipswich City Council has flagged it will take legal action if the dam’s operator, Seqwater, is found to have been negligent.’  That is a statement that shows a fundamental misunderstanding of inquiry and legal processes.  An inquiry such as the Queensland flood inquiry, or the 2009 Victorian Bushfires Royal Commission, is set up to discover what happened.  Whether or not those facts meet the legal test of negligence is not something the inquiry can decide, that can only be decided by a court of law.   If Ipswich is waiting to see if SEQWATEWR is ‘found to have been negligent’ they have missed the point of the legal action.  The point of the legal action is to answer that very question so they will need to commit their money to the legal action to see if they, and the other claimants, can satisfy a court that whatever facts there are, constitute negligence.  As we have seen in litigation from the Black Saturday fires, the findings of these post event inquiries are not necessarily admissible in subsequent legal proceedings (see my blog ‘More from the Black Saturday litigation’, September 6, 2011)

If this action does proceed, the plaintiffs will also have serious legal hurdles to clear.  It will be very difficult to show that SEQWATER and its staff had a legal duty to take action to protect individual interests.  They were operating a major water utility and had a number of competing duties including, primarily, a duty to protect the dam.  It is likely that this litigation, if it proceeds, will take many years, and add many millions of dollars to the final bill, before it is resolved.

What has to happen is we have to find a way to distribute losses from significant and catastrophic events without degenerating into a process of finding someone, and not even some institution but someone to be blame.

Michael Eburn

5 February 2012