Bushfire liability claims soar to $800m

Class actions are having a dramatic effect on the liability claims environment, with legal action over the Black Saturday bushfires resulting in settlements of almost $800 million in the space of two months.

The 2009 bushfires killed 173 people and caused more than $1.2 billion in claims and Maurice Blackburn Lawyers have been leading a series of class actions against power company AusNet Services.

Maurice Blackburn alleged that an AusNet powerline failed, falling onto a fence and sparking the blazes that hit Kilmore East-Kinglake and Murrindindi-Marysville.

The former fire killed 119 people and in late December Ausnet settled with 5000 class action plaintiffs for $500 million, although it admitted no liability.

The settlement is easily Australia’s largest class action, far outstripping the previous high-water mark of $200 million.

Under that settlement, AusNet will pay $378.6 million, Utility Services Corporation $12.5 million, and the Victorian Government $103.6 million.

On Friday, Ausnet also settled with plaintiffs for a class action over the Murrindindi-Marysville fire for $300 million, with Ausnet again paying the lion’s share of $260.9 million.

AusNet General Counsel Susan Taylor says its insurance will cover all of its liabilities.

“AusNet Services can confirm that its contributions and costs in all class action settlements arising from the Black Saturday bushfires have been, or will be, paid by its liability insurers under the insurance cover available for the events of Black Saturday,” she says.

“AusNet Services reviews its insurance cover annually and ensures it is commensurate with the scale and size of its operations, the risks assessed to be associated with its operations and with industry standards and practice.”

In the twelve months to September 2014, all gross incurred claims for public and product liability claims totalled $1.3 billion.