Settlement reopened due to fraud

james.morse_clrIn Hayward v Zurich Insurance Company plc [2016] UKSC 48 the Supreme Court of the United Kingdom considered whether a settlement agreement could be set aside in circumstances where proof (or, rather, further proof) of a dishonest claimant’s fraud was subsequently established.

At the time of settling an insurance claim in 2003, the insurer knew the claimant was exaggerating his injuries the subject of the claim.  However, in 2009, evidence surfaced which proved the exaggeration was to a greater extent than initially known, and the insurer sought to set aside the previous agreement.

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Bank Fees Class Action – High Court Judgment Imminent

james.morse_clrThose of you following our coverage of one of the commonly termed ‘Bank Fees Class Actions’; namely, the proceedings of Paciocco & Anor v Australia and New Zealand Banking Group Limited, presently before the High Court of Australia, will be pleased to hear judgment is set to be delivered at 10.00am on Wednesday, 27 July 2016, in Brisbane.

As these proceedings are something of a test case for a number of other ‘Bank Fees Class Actions‘, it appears the industry is only a matter of days away from getting some real clarity around this longstanding saga.

The Insurance Flashlight team will provide an update after judgment has been delivered – so please stay tuned.

Queensland WorkCover amendments to render contractual indemnities void

paul.baxterIt is a serious matter to interfere with the rights of parties to agree between themselves to whatever contractual terms they chose. There is currently a Bill before the Queensland parliament proposing a significant change to the way businesses are allowed to contract with each other and allocate risk for injury to workers.

If passed into law, the Bill will render void and unenforceable, certain contractual clauses where an employer, effectively indemnifies another entity against contribution claims the employer might otherwise have had for damages for injury to a worker. It is doubtful the full ramifications of this proposal have been adequately considered.

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Burroughs digs deep to convince Federal Court he is fit and proper

chris lisicaStephen Burroughs, a former manager of a general insurer whose conduct in the late 90s was found to have contributed to the infamous collapse of HIH, is again able to take up a senior insurance role after his disqualification was revoked by the Federal Court of Australia.

In 2004, the Australian Prudential Regulation Authority (APRA) disqualified Burroughs on the basis he was not a fit and proper person to be, or act as, the holder of a senior insurance role pursuant to s 25A(1) of the Insurance Act 1973 (Cth) (the Act). This decision was based on the applicant’s conduct in a number of reinsurance transactions which effectively concealed the insurer’s under-provisioning from auditors (it was the subsequent unexpected losses suffered by HIH as a result of this under-provisioning which was found to have substantially contributed to its collapse).

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Can a bankrupt maintain legal action on a TPD claim?

Clancy ODonovanIn Berryman v Zurich Australia Ltd [2016] WASC 196, the Supreme Court of Western Australia held a bankrupt, Berryman, was able to maintain legal action in his own name, claiming TPD insurance benefits from Zurich.

The Bankruptcy Act 1966 (Cth) relevantly provides:

  • an action commenced by a person, who subsequently becomes a bankrupt, is stayed until the trustee makes an election to prosecute or discontinue the action (ss 60(1)(2) & (3)); however
  • a bankrupt may continue in his or her own name, an action commenced in respect of any personal injury or wrong done to the bankrupt (ss 60(4) & 116(2)(g)) .

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ASIC extends relief for group purchasing bodies

1202398876_1_AUGroups(Alex_Samson_lr_Brisbane)The Australian Securities & Investments Commission (ASIC) has once again extended the relief provided to group purchasing bodies under Class Order CO 08/1. The relief was due to expire on 30 June 2016, but ASIC has extended it until 30 June 2017.

The class order gives eligible group purchasing bodies relief from the licensing and managed investments provisions of the Corporations Act. This includes relief from the requirement to hold an Australian financial services (AFS) licence for providing the following financial services in relation to risk management products:

  • dealing (other than issuing);
  • providing a custodial or depository service; and
  • giving financial product advice by providing certain general information when arranging for a person to be covered by a risk management product.

Further information can be found in ASIC Regulatory Guide 195.

This blog was co-authored by DLA Piper graduate solicitor Ann-Marie Coleman.

Optus to refund customers over A$2 million due to compliance breaches

1202398876_1_AUGroups(Alex_Samson_lr_Brisbane)Optus Insurance Services Pty Ltd (Optus) will refund approximately $2.4 million to around 175,000 Optus mobile customers in response to The Australian Securities & Investments Commission’s (ASIC) concerns about its compliance with Australian financial services laws. These concerns arose after Optus, one of the largest telecommunications company in Australia, self-reported a breach regarding its failure to provide certain customers who purchased mobile phone insurance with a Product Disclosure Statement and a Financial Services Guide. This breach occurred over a number of years.

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A slip up – shopping centre liable for slip and fall on wet tiles

Clancy ODonovanIn Raad v KTP Holdings Pty Ltd as Trustee for VM & KTP Nguyen Family Trust [2016] NSW 2016 888 the Supreme Court of NSW held the Defendant, an occupier of the Busby Shopping Village, was liable for injuries and damage suffered by the Plaintiff – notwithstanding he was injured when running on wet tiles.

Breach was made out because the Defendant did not produce any evidence anti-slip coating had been applied to the tiles prior to the Plaintiff’s fall (in respect of which the court drew a Jones v Dunkel inference), failed to apply and periodically reapply to the tiles a slip-resistant surface, failed to replace the tiles with tiles that had a more pronounced texture and failed to lay tiles in a way that permitted run off of water.

It was accepted the Plaintiff’s speed of movement may have been a contributing factor to the fall and a reduction of 10% for contributory negligence was made.

This decision is a reminder of the need for occupiers and managers of commercial premises to assess and respond to slip risk by devising and implementing routine systems of treatment, maintenance and review of flooring.

Federal Court of Australia decides Centrelink payments can still be used for funeral insurance

1202398876_1_AUGroups(Alex_Samson_lr_Brisbane)On 30 June 2016, the Federal Court of Australia blocked the Federal Government from stopping the use of Centrelink payments for funeral insurance. The Department of Human Services was due to stop making Centrepay payments (i.e. deductions from Centrelink payments) to Aboriginal Community Benefit Fund Pty Ltd (and its related companies) (ABCF) from 1 July 2016. However, ABCF successfully applied to the Federal Court to overturn the Department’s decision, meaning Centrepay payments to ABCF remain in force. ABCF is a private organisation and is the main provider of funeral insurance in Aboriginal communities.

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Humans and machines – the perfect partnership for discovery?

JamesMorseIn Pyrrho Investments Limited & Anor v MWB Property Limited & Others [2016] EWHC 256 (Ch), the Court expressly approved the use of predictive coding to meet the parties’ disclosure obligations.

Predictive coding combines human review with technology-assisted review and can provide a number of advantages, including the ability to reduce costs in certain matters. In the case at hand, which involved disclosure of a large data set, the Court also noted predictive coding could match (if not improve) the accuracy of the disclosure, and would be in line with the overriding objective of the Civil Procedure Rules and accompanying Practice Directions.

Ultimately, whether it would be right for predictive coding to be used in other cases would depend on the circumstances of those other cases. However, it is clear technology-assisted processes are becoming more common in litigation, and will continue to do so in the future.  By way of example, you can read how DLA Piper has already embraced artificial intelligence for document review during M&A due diligence here.

This blog was co-authored by DLA Piper graduate solicitor Anjali Narendra.

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