Class action appealed
30 Jan 2017
Southern Response has continued in its protest against a proposed class action levelled against it this week by filing an appeal of the High Court’s decision.
The government insurer had earlier expressed disappointment that the High Court had given the complainants the nod to proceed and warned that it would likely cause delays.
It made that disappointment official on Monday by filing an appeal of the High Court’s decision.
“We are concerned that a class action will not fairly and efficiently resolve each customer’s individual insurance claim,” the insurer’s spokesperson said.
“We are also concerned that a class action will delay the settlement of individual claims, especially given the Court’s indication that customers’ individual insurance claims will not be considered by the Court until after the Group’s general claim is dealt with.”
Southern Response also pointed to the High Court’s own admission that the class action was based on a ‘reasonably tenuous’ general claim by the Group about the insurer’s claims management practices, and the fact that the Court had reached its decision to allow a class action to proceed ‘by a rather fine margin’.
The verdict followed an earlier High Court decision that had not allowed the class action to proceed.
The spokesperson said: “The Group’s claim about Southern Response’s claim management practices, which the High Court described as ‘tenuous’, has no basis and there is no evidence to support it.
“As a result, a class action should not have been allowed to proceed. Instead, customers’ insurance claims should be dealt with on an individual basis, taking into account the unique circumstances of each case.”
The insurer said it also held ‘serious concerns’ about the impact of the funding arrangements for the class action on individual customers.
“We welcome the Court’s decision that some customers may have been misled about some aspects of the class action, and that the Group’s Australian funder and lawyers must take corrective action,” it said.
Southern Response said its offer to customers to seek two free hours’ expert, independent legal advice from a lawyer of their choice (but not involved in the action) around the conditions of the class action still stood.
It also pointed out that the original representative for the Group had now settled with Southern Response and had withdrawn from the action.
“An additional 10 other Group members have also settled their claims with Southern Response and have withdrawn from the action, or are in the process of doing so,” the insurer said.
“As the Group reduces from the original 47, we will continue to work with the remaining 36 customers in the Group, and all other customers, to settle their claims fairly and as quickly as possible.”
It also said it had successfully settled 2,289 claims since the original proposed class action was launched in April 2015, which in total meant 83% of nearly 8,000 over-cap house claims and 99% of 21,693 out-of-scope claims had now been settled.
- Insurance Business