AILA-News-June-2012

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www.aila.com.au www.nzila.org                                                                                    JUNE 2012



BARRISTER WARNS:
Beware reliance on probabilities over facts
by Nicole Sosnowski, KT Journalism         Court Judge Chris Robison dismissed
                                           the case against CPT but found
There are risks in straying too far
                                           Woolworths guilty of negligence. He
from the courts’ “traditional views” of
                                           said Woolworths owed Ms Strong a
probabilities, and relying on statistics
                                           duty of care to implement a thorough
and mathematical probabilities, a
                                           cleaning and inspection system. He
Victorian barrister says.
                                           awarded Ms Strong $583,000.
Michael Thompson SC said with
                                           Mr Thompson said the District Court
increasing information technology,
                                           had ignored the issue of causation.
great care was needed when using
                                           The judge had assumed since a
statistics and surveys, instead of
                                           grease mark from the chip was visible
“good, old-fashioned facts”. An
                                           after the incident, cleaners and shop
“appropriate degree of confidence”
                                           assistants had a duty to pick up the
was needed when relying on statistics.
                                           chip and remove the hazard, he said.       The court said Ms Strong had
His presentation on the High Court’s                                                  provided no evidence on how long
                                           Woolworths appealed against the
Strong v Woolworths slip & fall                                                       the chip remained on the floor and,
                                           District Court decision. It did not
decision to AILA’s Victorian branch                                                   under s5D of the NSW Civil Liability
                                           contest the duty of care finding,
was broadcast live via a two-way                                                      Act, Ms Strong had the onus of proof.
                                           but argued Judge Robison did not
video link to Brisbane and Sydney                                                     They said the chip could have been
                                           establish causation between its alleged
AILA meetings.                                                                        there five minutes or three hours.
                                           negligence and Ms Strong’s injury.
Amputee Kathryn Strong fell when                                                      The judges assumed it fell “during
                                           Mr Thompson said timing was                the lunch period”, since chips were
one of her crutches slipped on a
                                           important in proving causation.            normally eaten at lunch.
potato chip at about 12.30pm on
                                           Woolworths had no obligation to
September 24, 2004, in front of Big                                                   Ms Strong was granted special leave
                                           clean “every square inch of floor, every
W at Centro Taree Shopping Centre,                                                    to appeal against that decision. High
                                           second of the day”. Rather, its cleaning
NSW, owned by CPT Manager Ltd. Big                                                    Court Justice Bill Gummow, with
                                           system needed to be “reasonable”
W was conducting sidewalk sales in                                                    whom Justices Susan Crennan and
                                           and at “regular intervals”. He said it
an area to which Woolworths Ltd had                                                   Virginia Bell agreed, said the appeal
                                           was “tricky” because a good cleaning
exclusive rights under its lease.                                                     concerned the “familiar difficulty” in
                                           system, which all parties agreed was
Ms Strong had used crutches since a                                                   ‘slipping cases’ to establish a causal
                                           every 15 minutes, could have existed,
                                                                                      connection between the absence of
right leg above-the-knee amputation        but the chip still could have fallen.
                                                                                      adequate cleaning systems and the
decades earlier. She fell and was          On November 2, 2010, Appeal Court          injuries, when it was unknown when
injured while moving between two           Justice Jo Campbell, with whom             slippery substances were deposited.
plant stands where her crutch slipped      Acting Justice Ken Handley and
on a potato chip. CPT engaged                                                         Continued page 9
                                           Justice Ian Harrison agreed, said
contract cleaners who cleaned the mall     Judge Robison had not determined
and common areas every 15 minutes,
but not the sidewalk sales area, which
                                           whether Woolworths’ failure to
                                           implement a proper inspection and            Inside
was Woolworths’ responsibility.            cleaning system resulted in Ms
                                                                                        Reassess capabilities              7
Ms Strong sued CPT and Woolworths,         Strong’s injury. “They found the
claiming damages for negligence.           incident could have occurred without         Cultural conference                8
On August 28, 2009, NSW District           negligence,” Mr Thompson said.               Trucker payout                    10
                                                                                        Winemaker loses appeal            12
 2012 – Celebrating 29 years of AILA’s                                                  Risk cost impacts SMEs            13
contribution to insurance law education
News from the branches
                                           Dobson, Mitchell & Allport; Luke          On May 1, Michael Thompson SC
     Western Australia                     Taylor, from Page Seager; and Steven      presented a seminar on the Strong
                                           Smith, from Hunt & Hunt.                  v Woolworths High Court decision.
by Stephen Williams
                                                                                     The seminar was fully subscribed in
The WA branch had a busy seminar                  South Australia                    Victoria and video linked to Sydney
program in March and April.                                                          and Brisbane offices (see page 1).
In March, Chris Rimmer, a partner          About 60 people gathered at
                                                                                     Representatives from WorkSafe and
at Jarman McKenna, spoke on legal          Adelaide’s CGU offices on April 24 for
                                                                                     the Transport Accident Commission
liabilities that arise in the principal/   the latest in the Young Professionals
                                                                                     will give presentations on Victoria’s
contractor relationship in light of the    Insurance Fundamentals series.
                                                                                     statutory compensation schemes at
WA Court of Appeal decision in Parlin      Michael Fotheringham, partner at          the next seminar.
v Choiceone [2012] WASCA 19.               Winter, Hildich Fotheringham, spoke       Upcoming seminar topics include
In April, physiotherapist Michelle         about conflicts of interest, managing     ethics in insurance; proportionate
Butler, WA president of Australian         interests of insureds, insurers and       liability a decade on; FOS, a directors
Rehabilitation Providers and regional      solicitors, and steps to minimise risks   & officers’ update; Amaca asbestos
manager of Recovré for WA and              and conflict.                             litigation developments; and financial
NT, and Kelly Alderson, executive          The series is aimed at new insurance      lines in light of the FOFA reforms.
member of the Australian Society           industry workers, particularly those      Keep an eye out for details of this
of Rehabilitation Counsellors and          who have been in the industry five        year’s Young Professionals networking
Recovré’s principal rehabilitation         years or less.                            event, which aims to build on the
consultant, spoke on the important
                                           A breakfast briefing at Adelaide          success of last year’s inaugural event.
roles rehabilitation and rehabilitation
                                           Town Hall was scheduled for May 29,
providers play in return-to-work
                                           featuring Sydney barrister Geoffrey
                                                                                               Queensland
programs, vocational assessments and
as expert witnesses at all stages of       Watson SC.                                by Tim Hancock
personal injury claims.
                                                         Victoria                    The annual 2012 Insurance Intensive
In May, the branch had scheduled                                                     was at Sheraton Noosa on May 10-
a seminar on the impact of the Fair        by Cameron Roberts                        11. An outstanding array of speakers
Work Act and industrial relations          The Victorian annual dinner and           included Justice David Boddice, of
generally on personal injury claims.       annual general meeting on February        the Queensland Supreme Court;
                                           22 was a great success.                   Celine McInerney, of the University
The branch welcomes feedback from                                                    of Adelaide; and Heinrich Eder, from
members on topics they would like          Guest speaker, crime writer Andrew        Munich Re. Full coverage will be in
covered. Please contact any WA             Rule, entertained the record crowd with
                                                                                     the next issue of AILA News.
committee member with suggestions.         background to the Underbelly stories
                                           he co-authored with John Silvester.       On June 13, Justice Jean Dalton of
Also in May, I presented the annual                                                  the Queensland Supreme Court will
AILA Insurance Law prize at the            Committee members elected at
                                                                                     present a lunchtime seminar on the
                                           the AGM were David Abell, ANZ
University of Western Australia Law                                                  topic of self-represented litigants.
                                           (secretary/treasurer); Richard
School’s 2011 academic year award
ceremony. More details next issue.
                                           Adamcyck, Chartis; Mark Attard,                 New South Wales
                                           Monahan & Rowell; Peter Chapman,
Leanne Malauski, of CGU Insurance,         Cerno; David Chew, Norton Rose;           by Penny Paterson
has resigned as a member of the WA         Nieva Connell, Hunt & Hunt; Melanie
                                           Flatman, Willis; Cain Jackson, Wotton     AILA NSW has been very busy in the
committee. The committee thanks her
                                           + Kearney; George Karalis, Willis;        year to date.
for her participation and hard work,
particularly at last year’s National       Joe Naccarata, Cornwall Stoddart;         The Young Professionals networking
Conference.                                Raff Pisano, Minter Ellison; David        subcommittee held its first event of the
                                           Randazzo, DLA Piper; Mikaela              year, “Peers at the Pier”, at the Water
            Tasmania                       Reynoldson,Calliden; Oenone Ritman,       Bar, Woolloomooloo, on March 29.
                                           CGU; John Simpson, barrister; Michael
by Brian Aherne                            Thompson SC; and me as chairman.          It was a huge success that was sold
                                                                                     out a week prior; 500 people attended
The annual seminar on several              The 2012 seminar program started
                                           strongly.                                 for a night of networking and fun
insurance-related cases dealt with by
                                                                                     with an even mix of the insurance and
Australian courts in 2011 was held in      On March 27 the University of             legal professions attending. Thanks
March.                                     Southampton’s Ozlem Gurses                to the sponsors: Holman Webb, Hunt
Thirty-five insurance and legal people     presented an update on the UK Law         & Hunt, MDD Forensic Accountants,
attended to hear the guest presenters,     Commission’s Consultative Document        Curwoods Lawyers, Cunningham
Alison Quinn and Steve Knight, from        201 and recent cases.                     Lindsay, Crawford and Co, and

2 | AILA NEWS
News from the branches
Gallagher Bassett. Thanks also to
Technical Assessing, AR Conolly &
Co, and Lee & Lyons for providing     Young Professionals at the “Peers at the Pier”
lucky door prizes for the evening.    networking event, at the Water Bar, Woolloomooloo.
If any Young Professionals have
ideas for events, please email me.
The first seminar of the year, Law
for Insurers, was on May 8. It gave
younger members of the insurance
industry an overview of steps
involved in claims.
The Twilight Seminars are:
Wednesday, May 23
What 2012 has delivered so far
Wednesday, June 6
What’s going on with ISR policies?
Wednesday, June 20
The Financial Ombudsman Service
Wednesday, July 11
Practical aspects of dispute
resolution
Wednesday, July 25
Latest Trends in D&O
Wednesday, August 8
Proportionate liability: Where are
we at? Where are we going?
The branch is in the planning
stages of the Insurance
Fundamentals series that examines
various kinds of insurance and
how they are affected by claims.
The liaison subcommittee is
planning the inaugural Ron
Shorter Memorial Award, which
is aimed at Young Professionals
and sponsored by Colin Biggers
& Paisley in honour of colleague
Ron Shorter who died this year
(see page 6). Young Professionals
will be asked to provide 250 words    Editorial submissions
on why they want to enter the         AILA encourages members to submit editorial contributions for consideration for
competition and 15 will have          publication in AILA-NZILA News.
an opportunity to develop their
presentation skills through a         Contributions will be included at the editor’s discretion. They should be supplied as a
session with a professional coach.    Word document by email to ktj@ktjournalism.com well in advance of the final deadline
                                      (see page 16).
At the end of the session they
will give a short presentation and    Articles should cover topics of interest in furthering insurance law education, for example,
three finalists will be asked to      case notes and commentary on topical issues. Articles should be non-technical, written
give a 20-minute presentation         in plain English, and a maximum of 750 words.
at a public seminar. The final        Letters to the editor are also welcome, as are suggestions for leads the AILA-NZILA News
session will be judged by industry    journalists can pursue. For all editorial inquiries, please email the editor Kate Tilley (see
luminaries and the winner will        above) or phone (07) 3831 7500.
receive the award and a prize.
                                      We look forward to receiving your contributions – this is your publication, have your say.


                                                                                                              AILA NEWS    | 3
AILA President’s message

Insurance contracts
under a UK spotlight                                                                                 David Lee


Since the last issue of AILA News,          The meeting was attended by key               the pension age was scheduled to rise
I have participated in two major            stakeholders, including senior members        to 67 and it was important sufficient
events as president.                        of the industry and consumer groups.          income protection was available for
                                            Before the IRAG meeting, Mr Shorten           older working Australians who would
I was invited by Professor Rob Merkin,
                                            indicated he was very keen to promote         be affected by that rise. It agreed in
Research Professor of Commercial
                                            the National Disability Insurance             principle to work towards addressing any
Law at Southampton University, to
                                            Scheme, which was detailed in the May         gap in income protection insurance for
participate in the Insurance Contract
                                            federal budget.                               older working Australians.
Law Reform Academic Conference
hosted by Norton Rose in More               Discussing senior Australians and travel      Industry Super Funds Network
Riverside, London, on April 16.             insurance during the meeting, Mr              said most industry superannuation
                                            Shorten said the ageing population            funds should be able to increase
Speakers included UK Law                                                                  income protection coverage beyond
                                            meant accessibility of insurance by
Commissioner David Hertzell; UK                                                           65 over time. The Association of
                                            older Australians, including travel
Financial Ombudsman Service senior                                                        Superannuation Funds of Australia said
                                            insurance, was important. The group
ombudsman Robert Short; and some                                                          some, though not all superannuation
                                            discussed some challenges faced by
notable academics.                                                                        funds, already extended income
                                            senior Australians and advised of
I participated in a panel discussion        ongoing work by members to assist             protection cover to beyond 65. It said
before lunch with Professor Merkin;         senior Australians to access travel cover.    while there may be pricing issues for
Murdoch University insurance and                                                          extending cover beyond 65 for some
                                            The Insurance Council of Australia (ICA)
maritime law specialist Kate Lewins,                                                      funds, including cross-subsidisation and
                                            is establishing a telephone hotline for
from Perth; and Mr Hertzell. My                                                           upward pressure on premiums, those
                                            insurance inquiries and will explore
contribution concerned discussions                                                        issues were not insurmountable.
                                            how it could handle travel inquiries
on Australia’s experience with pre and      for older Australians. The National           IRAG’s mental health and insurance
post contract remedial provisions in        Insurance Brokers Association will            working group met three times since
the Insurance Contracts Act (sections       explore upgrading its website to make         the last IRAG meeting. The group’s
28 and 54). It was a wide-ranging           it more user friendly for consumers,          discussions included:
discussion that also touched good faith     including senior Australians.                 • opportunities to improve training of
(sections 13 and 14) and fraudulent                                                         staff dealing with people with mental
claims (section 56).                        The minutes show there were divergent           health conditions;
                                            views on the extent of the problem            • contractual issues, including
Craig Langstone, New Zealand                for senior Australians accessing
Insurance Law Association President,                                                        consistency of clauses across policies
                                            travel insurance. IRAG participants             and data availability; and
participated in a panel discussion in the   representing senior Australians agreed        • the scope of policy coverage offered
afternoon and spoke about the New           to survey their members to identify             by insurers.
Zealand experience.                         and gauge the extent of any problems.
                                            The results y will inform policy              Mr Shorten encouraged working group
Dr Lewins’s presentation on insurance
                                            considerations and industry solutions.        participants to continue their dialogue
law in Australia was excellent and very
                                                                                          and work towards practical initiatives
well received. There is certainly an        IRAG agreed to a roundtable meeting           to improve insurance outcomes for
appetite for reform.                        of interested IRAG participants being         people with mental illness, including by
She was followed by several prominent       convened by Treasury in July to look          training financial advisers and reviewing
UK insurance law academics.                 into senior Australians’ concerns,            and, where appropriate, removing
                                            including premium pricing.                    unnecessary inconsistency in insurance
Insurance Reform Advisory                   The group discussed some challenges           contract clauses.
Group                                       faced by older working Australians            ICA told IRAG it was working with the
On March 29 I attended, on AILA’s           in accessing income protection. The           Department of Human Services (DHS)
behalf, a further meeting convened by       product was broadly available and many        to identify possible demand from
Financial Services and Superannuation       life insurers offered protection to workers   Centrelink customers for fortnightly
Minster Bill Shorten, who chairs the        up to the age 65 and, in some cases,
Insurance Reform Advisory Group (IRAG).     beyond. The life industry recognised          Continued page 5

4 | AILA NEWS
NZILA President’s message

Earthquake fallout
continues                                                                                          Craig Langstone


With more than 10,000 earthquakes,             complicated and time-consuming. Many       hoped will provide important guidance
aftershocks and tremors since                  hours are likely to be spent working       to the market. However critics say it
September 4, 2010, the situation in            through the BI claims quantification       is just another level of unnecessary
Christchurch continues to present its          process.                                   bureaucracy being foisted on the city
fair share of challenges.                                                                 and its rebuilding process.
                                               At a practical level, insurers have been
The New Zealand Earthquake                     frustrated by the changing landscape.      At a personal level, the Canterbury
Commission (EQC) has received                  What insurers can and cannot do is         earthquakes were the reason the British
459,046 claims and completed 149,143           intrinsically linked to decisions of       Insurance Law Association invited me
assessments to date, according to              other entities, including the EQC,         to speak at a Lloyd’s session recently.
a recent website update. However,              the Canterbury Earthquake Recovery         My presentation, Some legal and
presumably this means 310,000                  Authority (CERA), the Department           coverage issues arising out of the
assessments have not been completed,           for Building and Housing and others.       New Zealand earthquakes, proceeded
some 20-odd months since the first             Thousands of domestic dwellings            before a near full house in London
earthquake hit. Obviously the EQC still        remain in an uncertain state pending a     on April 20. There was great interest
has an enormous amount of work to              ruling on whether rebuilding can occur     in earthquake issues in the London
do, even if there are no more major            on the land where they are situated.       market. Those present were particularly
                                                                                          interested in learning what was actually
earthquakes (heaven forbid).                   So even where insurers want to settle
                                                                                          happening ‘on the ground’ in New
Private insurers also have a lot of            claims, often they cannot, even with
                                                                                          Zealand at the moment.
work to get through. Pressure from             the best will in the world.
                                                                                          Like any good lawyer, I prefaced my
insureds has been building in recent           To further complicate matters
                                                                                          presentation with a clear disclaimer
months, particularly from commercial           for insurers, on April 18 the New
                                                                                          that I did not have any answers to any
entities whose business interruption           Zealand Government announced the           of the issues for discussion. It was said
(BI) cover came to an end 12 months            establishment of a new business unit       jokingly, but the fact is many situations
after the devastating February 2, 2011,        inside CERA to focus on rebuilding         New Zealanders face do not have
earthquake. Insurers are moving quickly        Christchurch’s CBD. The Christchurch       straight forward solutions. All I could
to settle claims where the opportunity         Central Development Unit is to provide     do was raise issues for the audience to
exists. But, increasingly, legal and           “clear leadership for the rebuild of the   be aware of. They seemed to appreciate
coverage issues are arising, which delay       city and work in a positive partnership    the breadth of issues and I certainly
the claims settlement process.                 with Christchurch City Council, which      fielded some wide-ranging questions.
Litigation seems inevitable over the next      remains the consenting authority”.         On a different note, there still has
few years on coverage issues that arise for    The new unit’s first task is to prepare    been no firm date set for the Steigrad
consideration on a daily basis, particularly   a blueprint for implementing the           v Bridgecorp D&O appeal by the NZ
given millions of dollars are at issue. But,   Central City Plan inside the next 100      Court of Appeal (see the December
in the meantime, claimants, loss assessors,    days. The blueprint aims to achieve a      2011 issue of AILA News). In the
claims adjusters and others are delving        coherent roll-out of anchor projects       meantime, uncertainty prevails.
into the claims quantification process         in Christchurch, like public buildings     Craig Langstone
in detail. BI claims, by their nature, are     and strategic city blocks, , which it is   NZILA President n


Insurance contracts under a UK spotlight
From page 4                                    • the cost of systems upgrades             The parties agreed to continue to work
                                                 for insurers to receive fortnightly      through those issues. It was a very
payments of premiums through
                                                 payments; and                            productive discussion with beneficial
Centrelink’s Centrepay facility.
                                               • legislative limitations to allow         outcomes for the insurance industry
ICA and DHS had also met to                      Centrelink to withhold fortnightly       and consumers.
discuss other issues that may present            premium payments and remit them          David Lee
barriers to paying premiums through              monthly to insurers.                     AILA President n
Centrepay, including:

                                                                                                                     AILA NEWS   | 5
AILA remembers Ron Shorter
                                             Mr Shorter was well known in the           He worked as claims manager at
                                             Australian and New Zealand insurance       LawCover, held a contract position
                                             industries.                                with Marsh and, in April 2007, became
                                                                                        practice manager of Colin Biggers &
                                             Sydney’s Northern Suburbs Memorial         Paisley's Insurance Group. He left in
                                             Gardens and Crematorium chapel             mid-2011 due to illness.
                                             overflowed with family, friends and
                                                                                        Mr Shorter's reputation, expertise and
                                             colleagues from the insurance and legal
                                                                                        generosity of spirit in the insurance and
                                             professions on February 13 to celebrate    legal community were highly regarded
                                             Mr Shorter's life.                         and will be greatly missed. In her eulogy,
                                             Mr Shorter graduated with a Bachelor of    Supreme Court principal registrar and
                                             Law degree from Auckland University in     CEO Linda Murphy said: "Ron gave his
                                                                                        time selflessly to many of us to foster
                                             1979 and practised as a solicitor in New
                                                                                        our understanding and appreciation of
                                             Zealand until July 1983.
                                                                                        our strengths and weaknesses. However,
                                             He worked as a loss adjuster with          he would never call them weaknesses,
                                             MBS Loss Adjusters Ltd, a liability        because that was not his way. He
                                             claims supervisor with Alexander           infused us every day with a tremendous
                                             Stenhouse Ltd and spent 11 years with      sense of the positive, either personally
                                                                                        or professionally. He encouraged us to
                                             FAI General Insurance Company Ltd,
                                                                                        realise we were capable of achieving so
                                             where he was promoted to professional      much more and it was just at our finger
by Colin Biggers                             indemnity and commercial national          tips to do so. In his professional life, he
                                             claims manager in May 1998.                calmly, but concertedly, steered many
AILA celebrates the life of Ron
Shorter who passed away on                   Mr Shorter left FAI when it was            who were at the start of their careers."
February 7, 2012, after a lengthy            acquired by HIH and became claims          Ron was a great supporter of AILA and
battle with cancer.                          manager at Dexta Corporation Ltd.          will be greatly missed. n




The world of insurance
by Michael Gill                              locations including Tel Aviv, Israel;      Jerome Kullmann’s chairmanship,
                                             Asuncion, Paraguay; and most recently,     has identified chairpersons for those
The global nature of insurance has
                                             Istanbul, Turkey.                          topics and agreed on a program
been graphically demonstrated by the
impact catastrophes in one part of                                                      format to attract and involve a broad
                                             Later this year we will meet in one
the world can have on business and                                                      range of countries and legal systems.
                                             of the undisputed financial capitals
markets around the world.                                                               The Scientific Council also plans to
                                             of the world - London - before the
                                                                                        have participation from practising
Floods in Australia and Bangkok,             2013 meeting in Lisbon, Portugal and
                                                                                        lawyers, academics, and company and
earthquakes in New Zealand, a                Sydney, Australia.
                                                                                        government lawyers.
tsunami in Japan, and a financial            It is reassuring to see the national
crisis in Europe have had knock-on                                                      The Turkish Chapter, with assistance
                                             AIDA chapters’ expertise used to
effects worldwide; directly and via                                                     and participation from the German
                                             ensure not just successful council and
the insurance processes compensating                                                    Chapter, hosted an excellent
                                             executive meetings, but also seminars
business and people for their losses.                                                   conference. Its main theme was
                                             and conferences examining important
Reinsurance and its ongoing availability                                                transparency in insurance. I have asked
                                             insurance issues.
is just one example.                                                                    all national chapters to be aware of the
                                             The meeting in Istanbul (May 2-4,          topics for the Rome/Florence World
As a world organisation with global          2012) approved, in-principle, the          Congress in 2014 when setting their
ambitions, AIDA’s charter can only be        Program for the World Congress in          domestic programs. The papers from
achieved by constantly striving to make      2014, to be held in Rome and Florence.     the Turkish conference on transparency
our presence felt, exert our influence and   The sessions will include:                 are first class.
share our expertise in both the developed    • transparency in insurance - theme
and developing parts of the world.                                                      Seven AIDA working parties met in
                                               nominated by the Italian Chapter;
                                                                                        Istanbul. I was able to attend Chris
AIDA has met several times in countries      • insurance & arbitration;                 Rodd’s well-received presentation at the
and cities recognised as centres of          • preventative measures;                   Climate Change Working Party on the
the financial and insurance world.           • online insurance; and                    Queensland floods. I also attended good
However, over the last two years
                                             • discrimination.                          presentations of the working parties.
significant AIDA Presidential Council
meetings have been held in other             The scientific council, under professor    Continued page 14

6 | AILA NEWS
     Employers urged to reassess
     employee capabilities
by Nicole Sosnowski, KT Journalism         process. “Employees have to be strong         4. manipulative behaviour. For example
                                           and fit enough to cope with the                  an injured person might say they
Orthopaedic surgeon Professor Jerzy
                                           demands of work and, generally, that             did not want to do the washing up
(George) Sikorski says employers,
                                           declines with age.”                              because they are in pain or might
insurers and return-to-work
specialists need to reassess their         For example, if a person started in a            say they are “not in the mood”
misconceptions about workplace             position at age 20 at their maximum              because they were injured.
injuries, including assuming no pre-       work capability, by the time they             Dr Sikorski said the extent of those
existing conditions exist, all problems    reached their mid-30s in the same             behaviours should be proportionate
are caused by ‘the event’, and that        job, they could be on the verge of            to the injury, but abnormal illness
victims are “forever young”.               a breakdown because they may be               behaviour sometimes occurred, where
                                           unable to cope with the job’s demands.        the proportion of behaviours was “out
He told AILA News his West Australian
                                           “The bigger safety margin you have
AILA branch presentation had three key                                                   of whack”.
                                           [when you start a job], the longer you
messages: understand not all injuries
                                           will be able to work in that job,” Dr         They could be inadequate, for example
that happen at work are caused by
                                           Sikorski said.                                being told you will die, but not facing
work; consider the impacts of ageing
                                                                                         the reality of the situation; or excessive,
on employees; and look out for illness     It was important insurers and return-to-
                                                                                         for example stubbing your toe and
behaviours attached to injuries.           work specialists were aware of potential
                                                                                         spiralling into depression.
                                           injury issues because it could save them
“You spend one third of your life at
                                           money in the long term. “For example,         He said employers and return-to-work
work, so you can expect some [injuries]
                                           trying to get an older worker back into       specialists needed to learn how to deal
that arise are not caused by work,” Dr
                                           the same job, if he is not fit for the job,   with those behaviours. “That is the art
Sikorski said.
                                           could be a waste of time.”                    of trying to get people back to work.”
The likelihood of a person who spent
                                           Physical illnesses had psycho-social          Dr Sikorski said employers should
40 hours a week at work having a
                                           consequences because particular illness       regularly consider whether work
spontaneous on-set of illness was
                                           behaviours were linked to injuries.           demands were appropriate for
36%. So pre-existing injuries may
                                           Four normal behaviours occurred when          employees. He stressed it was not just a
cause workplace illness. “Neither work
                                           someone was injured:                          once-off activity, but employers should
nor injury prevent the development of
                                           1. depression, or getting annoyed with        re-examine employees’ capabilities at
unrelated illness.”
                                              the situation;                             least every 10 years. “It should be a
He said employees needed to be “fit        2. anxiety;                                   repeated assessment process. Not only
for purpose” in their positions, so        3. wanting someone to look after them         is it a useful exercise, but it may save
employers had consider the ageing             or show sympathy; and                      employers money.” n




Damages awarded for late payments
The Queensland Supreme Court has           from selling the properties. It initially     it was entitled to receive damages for
ruled a property investment finance        received $4 million “in undisputed            the Lloyd’s syndicates’ failure to pay
provider is entitled to receive interest   amounts” from the syndicates..                the undisputed claim amounts on time.
on late payments made by unnamed                                                         One amount was not paid until the day
                                           It then took court action seeking
Lloyd’s syndicates.                                                                      the trial began.
                                           amounts advanced for interest
Oakland Investments (Australia) Ltd        payments, or as provisions for possible       Justice Applegarth assessed damages at
held two mortgage indemnity and            future interest payments; and fees or         10% a year, starting from three months
impairment policies with two separate      charges it would have received, had the       after the sale of the final security in
groups of Lloyd’s syndicates from          borrowers not defaulted.                      each claim. He ordered the parties to
July 1, 2006, to June 30, 2008.                                                          agree on costs.
                                           Justice Peter Applegarth did not allow
Oakland made six claims under the          the extra payments. He said Oakland           (Oakland Investments (Aust) Ltd v
policies after borrowers defaulted and     had “failed to establish an entitlement       Certain Underwriters at Lloyd’s & Anor
it could not recoup what it was owed       to be indemnified”. However, he said          [2012] QSC 6, 31/01/2012) n

                                                                                                                    AILA NEWS   | 7
     Conference shapes up as a
     cultural experience
                                                                                                73km northwest of Hobart. The
                                                                                                full-day tour is a golf and distillery
                                                                                                package, including morning tea at the
                                                                                                Australasian Golf Museum; a game
                                                                                                of golf; lunch in the Elm Corner Cafe
                                                                                                Courtyard; and a mill & distillery tour,
                                                                                                with whisky tasting and afternoon tea
     Delegates and partners attending the              2011 and showcases artworks, including   at the Nant Distillery.
     2012 AILA national conference can                 antiquities, such as coins, flints and
                                                                                                Bothwell was settled by a boatload of
     expect a Devil of a time, as the social           sarcophagi; paintings by Sir Sidney
     activities on offer keep mounting.                Nolan; and an array of controversial     pioneering Scottish settlers in 1822.
                                                       modern art.                              Along with their proud Scottish culture,
     The October 31-November 2                                                                  they brought the game of golf with
     conference, at Hobart’s waterfront                Transport will be provided, and          them. Ratho is considered the oldest
     Hotel Grand Chancellor, will be a                 delegates will have time to wander       known golf course existing outside
     memorable experience.                             through the museum and its surrounds.    Scotland.
                                                       Drinks and finger foods will be served
     Delegates are encouraged to visit                                                          Delegates also can do a half-day tour
                                                       in a MONA function area, The Void,
     the Museum of Old and New Art                                                              of the Cascade Brewery to learn about
                                                       before delegates return to the city.
     (MONA) on Friday, November 2, after
                                                                                                Australia’s oldest brewery, its best beers
     the conference’s official sessions                There are two pre-conference tours
                                                                                                and the brewing process.
     finish. MONA, described by owner                  available for Wednesday, October 31.
     David Walsh as “a subversive adult                Delegates can visit Australia’s oldest   For the latest conference information,
     Disneyland”, houses Australia’s largest           gold club, Ratho Golf Links. Open        go to www.cdesign.com.au/aila2012/
     private art collection. It opened in early        since 1822, Ratho is in Bothwell,        index.html n




                                            from
     Ratho Golf Links in Bothwell, 73km
     Hobart, is Aust ralia’s oldest golf course. Photo
                                              Tasmania.
     by Garry Moore, supplied by Tourism

                                                                                                           Founded in 1824, the Cascade
                                                                                                           Brewery in Hobart is Australia’s
                                                                                                           oldest brewery. Photo by George
                                                                                                           Apostolidis, supplied by Tourism
                                                                                                           Tasmania.




The Museum of Old and New Art, in Hobart, from
Little Frying Pan Island. Photo by Leigh Carmichael.




                                                                                                 The facade of the famous brewery.
                                                                                                 Photo by Richard Eastwood, supplied
                                                                                                 by Tourism Tasmania.


     8 | AILA NEWS
Keep Allen comments “in context”
Queensland barrister Kevin Holyoak          “inadvertently” disclosed, including the   such as s20, which prohibits privilege
said the Appeal Court’s 2011 State          treating doctors’ accounts. Mr Allen       from arising in certain circumstances;
of Queensland v Allen decision              sought orders requiring PCH to hand        and subsection 30(2), which removes
showed it was important to rehearse         over copies of “investigative reports”,    privilege from certain communicators.
the principles of legal professional        including witness statements and file
                                                                                       Mr Holyoak said Justice Fryberg’s
privilege.                                  notes. The State of Queensland’s (SoQ)
                                                                                       comment in Allen that a witness
Although the issue of whether privilege     law firm Minter Ellison had requested
                                                                                       statement given to a loss adjuster
                                            statements from medical practitioners
existed was not addressed in the                                                       would not attract privilege must be
                                            not involved in the procedure as part of
appeal case, he said the judges clearly                                                kept in context. “His Honour was not
                                            an investigation into the incident.
implied if privilege’s existence had                                                   propounding a rule of law.”
been challenged, it may not have been       On November 26, 2010, Supreme Court
                                                                                       Justice Fryberg could not have made a
upheld.                                     Justice Peter Applegarth rejected SoQ’s
                                                                                       rule of law because there was authority
                                            plea that file notes and statements
Mr Holyoak spoke on the topic at an                                                    that documents given to loss adjusters
                                            of evidence were not “investigative
AILA Queensland meeting last year                                                      could, in appropriate circumstances, be
                                            reports”. But on November 4, 2011,
and was invited back to present again                                                  subject to privilege, he said.
                                            Appeal Court Justices Hugh Fraser,
after receiving interest from members.
                                            Margaret White and Henry Fryberg           The majority of the Appeal Court
Mr Holyoak was junior counsel for the
                                            ruled a doctor’s witness statement         had held there was insufficient
Crown in the appeal.
                                            must be disclosed, but file notes of       documentation on the medical record
The Appeal Court’s decision disclosed       discussions with two doctors not           to give the hospital administration
the circumstances in which an               related to the incident were privileged.   a complete picture, so, the witness
existing privilege might be retained,                                                  statement was necessary. “Justice
                                            Mr Holyoak said the Appeal Court did
or removed, by s30 of the Personal                                                     Fryberg was merely commenting that
                                            not need to consider when, and in
Injuries Proceedings Act 2002 (PIPA).                                                  if a witness statement, as opposed to a
                                            what circumstances, privilege could
On December 23, 2003, 16-month-old          be claimed. However, Justices White        proof of evidence, was given to a loss
Ethan Allen was diagnosed with severe       and Fryberg made clear inferences          adjuster, that would not attract legal
brain damage following a procedure          that, if the existence of the privilege    processional privilege,” Mr Holyoak said.
at Brisbane’s Prince Charles Hospital       were challenged, it may not have been      “In other words, the dominant purpose
(PCH). His father and legal guardian,       upheld.                                    of such a ‘witness statement’ given
Daniel James Allen, instructed solicitors   He said Justice David Boddice’s 2012       to a loss adjuster was other than a
to bring a claim on his son’s behalf for    Supreme Court decision in Mahoney          privileged purpose.” Mr Holyoak said
compensation under s9 of the PIPA.          v Salt demonstrated that privilege,        it depended why, and the context in
When seeking clinical records               and the material supporting privilege,     which, a witness statement was given
from PCH, several documents were            could fall outside PIPA’s provisions,      to a loss adjuster. n


Barrister warns: Beware reliance on probabilities over facts
From page 1                                 rather than in the small 15-minute         not fit the ‘traditional approach’
The majority High Court decision set        time frame.”                               outlined by Justice Dixon in the 1938
aside the Appeal Court’s ruling, opting     The only dissenting judge, Justice         Briginshaw v Briginshaw decision.
in favour of Ms Strong’s claim.             Dyson Heydon, disagreed, saying Ms         Justice Dixon said: “When the law
                                            Strong had the legal burden of proof       requires the proof of any fact, the
The judges said the ‘but for’ test
applied. “But for Woolworths’               and her recourse to the “probability       tribunal must feel an actual persuasion
negligence, would the accident have         theory” was unconvincing. He said          of its occurrence or existence before it
occurred?” Mr Thompson said.                she had in effect swung the onus           can be found. It cannot be found as a
                                            onto Woolworths to prove when the          result of a mere mechanical comparison
Woolworths’ argued unless Ms Strong         chip had fallen. Justice Dyson said        of probabilities independently of any
proved when the chip fell, her case         just because Ms Strong did not know
failed. However, she argued the Appeal                                                 belief in its reality.”
                                            when the chip fell, that did not mean
Court had not considered the balance        Woolworths should know any better.         Mr Thompson said there was a
of probabilities. Mr Thompson said                                                     “discomfort” is relying on statistics
the High Court had to determine             Mr Thompson said there were several
                                                                                       and probability to prove facts. An
the probability of the chip falling         warning signs in the High Court’s
                                            ruling. Because there was no direct or     “appropriate degree of confidence” was
across the entire morning, against                                                     needed to relying on statistics.
the probability of it falling within 15     circumstantial evidence, the judges had
minutes before the accident. “Based         to rely on “common experience”, which      (Strong v Woolworths Ltd [2012],
on the balance of probabilities, it         required caution.                          HCA 5, 07/02/2012; Woolworths Ltd
was more likely the chip had fallen         Adopting the ‘probability approach’        v Strong & Anor [2010], NSWCA 282,
sometime across the whole four hours,       meant the High Court’s decision did        2/11/2010) n


                                                                                                                 AILA NEWS   | 9
Trucking firm
‘entitled to payout’


West Australian Supreme Court                In a commentary, DLA Piper senior           policy; the damages claimed were too
Justice Edwin Corboy has ruled               associate James Morse said the court        remote; or, alternatively, HH failed to
a freight company is entitled to             characterised the PAQS exclusion as a       prove it had lost the opportunity to earn
$300,000 under an insurance policy,          policy condition, which meant s54 of        the profits claimed. But Justice Corboy
plus $145,000 for lost opportunity.          the Insurance Contracts Act 1984 (Cth)      disagreed and awarded HH $145,000.
WA-based Highway Hauliers Pty                applied. Morse said the fact neither        At a subsequent hearing, HH lost an
Ltd (HH) held a policy with SRS              driver had attained the minimum score       indemnity costs order. HH argued its
Underwriting Agency, an agent for            was not, by itself, sufficient reason for   costs were entitled to be indemnified
Matthew Maxwell who represented              the insurers to reject the claims. “The     because of the insurers’ conduct of their
various Lloyd’s syndicates. SRS effected     policy was more concerned with use of       defence; and that the insurers were using
a policy for certain risks associated with   the vehicles, rather than attributes of     the proceedings as a vehicle to test the
HH’s business, including vehicle and         the drivers involved,” he said.             construction of the policy wording.
trailer damage.                              HH also claimed it lost the opportunity     Justice Corboy dismissed the indemnity
After two prime movers and their trailers    to earn profits from a weekly return        costs order, but allowed a special costs
were damaged in separate accidents, HH       freight run because it could not            order. “Whether that order results in
claimed repair or replacement costs. The     replace the prime mover and trailer         [HH] being allowed more than the
insurers rejected both claims, arguing       involved in one accident. It claimed        maximum amount specified under the
the truck drivers involved:                  the value of the lost opportunity           relevant scales will be a matter for the
(a) had not achieved the minimum             was the profit that would have been         taxing registrar to determine,” he said.
    score on a PAQS driving test, as         derived from continuing to operate
                                             the run, discounted for contingencies.      Highway Hauliers Pty Ltd v Matthew
    required under the policy; and
                                                                                         Maxwell (the authorised, nominated
(b) were ‘non-declared’ (or non-             HH initially claimed $826,738 when
                                                                                         representative on behalf of various
    approved) drivers for the purpose of     the trial began, but later reassessed
                                                                                         Lloyd’s underwriters) [2012], WASC 53,
    an exclusion contained in the policy.    its costs at $250,000, subject to a
                                                                                         21/02/2012; Highway Hauliers Pty Ltd
                                             discount for contingencies.
Justice Corboy said though the drivers                                                   v Matthew Maxwell (the authorised,
were ‘non-declared’ and had not              The insurers argued they were not liable    nominated representative on behalf of
undertaken the PAQS test, the insurers       for lost opportunity because of the         various Lloyd’s underwriters) [2012]
still had to indemnify HH.                   nature of the insurance under the SRS       WASC 53 (S) n




AILA sponsors student awards
AILA has sponsored awards for                Insurance Law and Regulation for            AILA president David Lee said: “I
students who achieve the highest             Brokers: Michelle Ryan,                     congratulate all five module winners for
final grade in ANZIIF’s insurance law        Jardine Lloyd Thompson                      2012. AILA is honoured to be involved
and regulation modules.                      Life Insurance Law and Regulation:          with the ongoing education of those
Each winner receives a certificate and       Noel Adams, AIA Australia
                                                                                         working in and studying insurance law
a $1,000 prize presented at an ANZIIF        Loss Adjusting Law and Regulation:
event in their state of residence. The       Emma Doney, Technical Assessing             and the recipients should all be proud of
winners are:                                 Workers’ Compensation Law and               their outstanding academic achievements.
Insurance Law and Regulation:                Regulation:                                 ANZIIF is to be congratulated on the
Elyce Gale, Lumley Insurance                 Lydia Rogers, EMB Insurance Brokers         content of the curriculums.” n

10 | AILA NEWS
UK asbestos case reaffirms
Australia’s policy stance
Lawyers say the UK Supreme                 were triggered when the employee            v Glenhaven Funeral Services Ltd
Court’s mesothelioma decision in           inhaled asbestos fibres. However, some      apply when determining whether an
the EL Trigger Litigation is in line       EL insurers issued policies where the       employee ‘sustained’ or ‘contracted’
with Australia’s approach to policy        trigger was not the date the injury         mesothelioma during a particular
trigger points and will bring clarity      was caused, but the date on which the       policy period? The rule creates an
to European and North American             injury was ‘sustained’ or ‘contracted’.     exception to the general causation
insurers and reinsurers.                                                               principle, where a claimant must prove
                                           Until 2006, the different wordings
A group of UK run-off insurers argued      were considered insignificant, and the      a defendant’s negligence caused their
they were not liable to pay workers’       insurance and reinsurance markets paid      injury or disease. Since 2002, English
compensation if workers’ asbestos-         claims on the assumption the different      law has recognised that does not
related diseases occurred outside policy   wordings meant the same thing. It was       apply to mesothelioma cases.
periods.                                   also assumed that, in mesothelioma         On the first issue, the court
                                           claims, the relevant ‘injury’ was
The insurers maintained the employer                                                  unanimously decided the trigger for
                                           suffered at the time of inhalation.
liability (EL) policies only covered                                                  cover under EL policies was aligned
mesothelioma that manifested as            Those assumptions changed with the         with the date of exposure to asbestos.
a disease at some point during the         2006 English Appeal Court decision         On the second, it decided by a 4-1
relevant policy period. In contrast, the   in Bolton MBC v Municipal Mutual           majority the rule does apply.
employers argued the policies responded    Insurance Ltd. It held that a public
to mesothelioma caused by exposure         liability policy covering bodily injury    Aligned with Australia
to asbestos during the relevant policy     ‘occurring’ during the policy period       AAR’s Messrs Carrigan, Hopley and
period, but which developed and            was triggered when the cancer first        Lloyd said under existing Australian
manifested sometime later.                 developed.                                 workers’ compensation and public
                                           Bolton created the potential for victims   liability policies, the injury date was
Last March, the UK’s final Court of
                                           to be left with no compensation if,        already considered the exposure date.
Appeal for civil cases ruled the trigger
point was the actual exposure, not         as insurers contended, courts were         “UK insurers and reinsurers will
the date symptoms emerged. The             bound to hold the policies were only       welcome clarification of the law that
Supreme Court dismissed the insurers’      triggered when an employee developed       effectively restores the market to its
appeal, saying s1 of the UK workers’       mesothelioma.                              pre-2006 position for ER policies.” The
compensation legislation, Employers’       The EL Trigger Litigation – a              AAR trio said reinsurers could more
Liability Compulsory Insurance             consolidation of EL claims against         easily assess and allocate claims and
Act, pointed the way to the correct        various insurers – was launched to         consider issues like aggregation.
interpretation. It said every employer     resolve the issue.
“shall insure, and maintain insurance                                                 Outcome confirmed
                                           Initially, the High Court returned         The Association of British Insurers
... against liability for bodily injury
                                           to the pre-Bolton position, finding        general insurance and health director
or disease sustained by his [sic]
                                           the ‘injuries sustained’ and ‘disease      Nick Starling said the outcome
employees, and arising out of and in
                                           contracted’ EL wordings meant the          confirmed what most insurers had
the course of their employment”. To
                                           same as ‘injuries caused’.
give proper effect to the legislation’s                                               always understood. “This case has been
protective purpose, the Act required       But the Appeal Court said EL policies      pursued by a small group of run-off
insurance on a causation basis.            referring to ‘diseases contracted’ were    insurers acting independently and at
                                           triggered by exposure to asbestos,         odds with the views of the majority of
UK litigation                              while those referring to ‘injuries         the UK industry,” he said.
In a commentary, Allens Arthur             sustained’ were triggered only by
Robinson (AAR) partner Dean Carrigan,                                                 Because of the court’s decision, “it
                                           mesothelioma developing.
senior associate Philip Hopley and                                                    should now be possible to move
lawyer Stephen Lloyd said from the         Before the Supreme Court, the insurers     forward to ensure much needed reforms
1940s until the late 1990s, EL policy      sought clarification on two issues:        are introduced to expedite the claims
wordings in the UK used several            - is mesothelioma ‘sustained’ or           process for mesothelioma claimants”.
triggers for cover.                          ‘contracted’ at the time of the          (Employers’ Liability Insurance
                                             employee’s exposure to asbestos, or      “Trigger” Litigation: BAI (Run Off)
The most common wording offered
                                             only later, when the disease manifests   Ltd (In Scheme of Arrangement) &
cover for injuries “caused during
                                             itself?; and
the period of insurance”, and it was                                                  Ors v Durham & Ors [2012], UKSC 14,
accepted policies with that wording        - does the special rule in Fairchild       28/03/2012) n

                                                                                                              AILA NEWS   | 11
Court dismisses winemaker’s appeal
The Full Federal Court has dismissed      dramatically, Mr De Bortoli said they       • Mr De Bortoli maintained he read
an appeal by De Bortoli Wines             were “exceptionally good value”. He           the Australian Financial Review, yet
Pty Ltd (DBW), saying it was not          agreed he felt he knew better than the        he said he was unaware of HIH’s
entitled to compensation from HIH’s       market and backed his own judgement.          considerable negative press. Therefore
liquidators.                                                                            they said Justice Stone was open to
                                          Justice Stone said: “Mr De Bortoli
                                                                                        find the credibility of Mr De Bortoli’s
DBW bought 19,683,138 HIH shares in       was an experienced share trader who
                                                                                        evidence had been undermined;
2000 for $7.1 million. The shares were    had purchased significant parcels of        • Without any specific evidence, Mr
acquired in 66 transactions from August   shares. His assertions he knew better         De Bortoli relied on HIH’s relevant
to December 2000. In that time, the       than the market and relied on his             statements and the “entire thrust”
price dropped from $1.04 to 22¢.          own assessment are inconsistent with          of his evidence was share purchases
The court was told when HIH went into     his claim to have relied on [HIH’s            were made based on his own
provisional liquidation in March 2001,    representations]”. She said he was            strategy; and
the investment’s value was effectively    betting against the market rather than      • HIH’s public affairs general manager
destroyed.                                relying on it.                                John Clarke’s statements were
In 2009, DBW managing director            In the Full Federal Court on March 15,        “bland” and “general” and, as was
                                          Justices Peter Jacobson, Antony Siopis        ultimately conceded by Mr De
Darren De Bortoli told HIH liquidators
                                          and John Nicholas dismissed DBW’s             Bortoli, not statements to which
his company was owed the cost of the
                                          appeal with costs. They said Justice          much weight could be attached.
shares because he relied on misleading
and deceptive information from HIH.       Stone had not erred in finding Mr De        In commentary, Allens Arthur Robinson
Although the liquidators admitted HIH     Bortoli failed to prove reliance on HIH     partner Duncan Travis and senior
had been misleading; they rejected        misrepresentations.                         associate Jonathan Joseph said the
the claim, arguing there was no causal                                                case showed arguments shareholders
                                          The court identified five key reasons:
connection with DBW’s loss.                                                           relied on company representations were
                                          • Mr De Bortoli admitted the catalyst
                                                                                      rebuttable, so shareholders had the
Last June, Federal Court Justice            for his initial HIH share purchase
                                                                                      burden of proving reliance.
Margaret Stone agreed and dismissed         was his knowledge high-profile HIH
DBW’s compensation application,             director Rodney Adler was buying          “They said even if such an inference
saying Mr De Bortoli had relied on his      large numbers of HIH shares, not          could be made based on the evidence,
own judgement and opinions, not HIH         documents he claimed to have read;        litigants should assume the court will
misrepresentations, when buying the       • He continued to buy shares, despite       weigh up all the evidence bearing on the
shares.                                     the share price dropping significantly.   shareholder’s claim to determine whether
                                            He also insisted he “knew better than     individual reliance has been established.”
She said Mr De Bortoli had bought HIH
shares in August 2000 based on “stale”      the market”. That conclusion was          (De Bortoli Wines Pty Ltd v HIH
information and in September bought         supported by the absence of evidence      Insurance Ltd (in liq) [2012], FCAFC
1,182,927 shares at prices ranging from     demonstrating Mr De Bortoli               28, 15/03/12; De Bortoli Wines Pty Ltd
93¢ to 50¢. Asked why he kept buying        undertook any detailed analysis of        v HIH Insurance Ltd (in liquidation)
shares when the price was falling           HIH’s financial accounts;                 [2011], FCA 645, 09/06/11) n
12 | AILA NEWS
Rising insurable risk costs
impact smaller businesses
Aon’s 2011/12 Australasian Risk              said:”When organisations invest in risk       property insurance. However,
Survey has found the total cost of           management, they reduce their TCOIR           Mr Venning said that was not
insurable risk (TCOIR) almost doubled        by actively focusing on managing risk         representative of the current market
during 2011 for businesses with              exposures to ensure they are minimised        environment, with NZ brokers and
revenues of less than $100 million.          and aligned with acceptable risk              insurers reporting average property
                                             tolerance levels.”                            premium increases of 55% in 2011
While the overall median TCOIR per
                                                                                           following the Canterbury quakes in
$1,000 of revenue increased 12%              Premiums rise                                 2010 and 2011. Additionally, there were
during 2011, the survey revealed smaller     Aon’s survey showed, unsurprisingly,          several individual increases ranging
organisations were hit hardest, with         insurance premiums rose in 2011/12.           from 200% to 1,000%.
TCOIR almost doubling from $6.48 to          Across the eight lines covered in the
$12.35 per $1,000 of revenue.                survey, respondents reported average          Coverage quality
Aon surveyed 318 Australian and 32 New       premium increases of 0.01% to 18.84%.         Respondents indicated they were
Zealand organisations of varying sizes                                                     expecting more from insurers across the
                                             In Australia, respondents reported
for the report. Overall, the proportion of                                                 board. They rated coverage quality and
                                             highest increases for motor vehicle
TCOIR for risk retention costs doubled                                                     breadth as the most important factor,
                                             (8.67%) and property (7.7%) insurance.
from 20% in 2010/11 to 40% in                                                              followed by price competitiveness and
                                             Mr Venning said the level of natural
2011/12, largely due to unusually high                                                     claims service.
                                             catastrophe losses had caused a re-
natural disaster-related losses.             pricing of risks exposed to natural           “Price, coverage quality and
Organisations that had dedicated             catastrophes, those in high-hazard            dependability are still the key
risk management, risk financing or           operations or where there had been            requirements of good insurance,” Mr
insurance departments; actively sold         significant claims.”There is still buoyancy   Venning said. “If you’ve got the right
their risks to the insurance market; or      in the market where insurers will             price, the right cover and they’re paying
had formal risk retention vehicles (such     continue to provide competitively priced      a claim then what more do you need?”
as captives), reported lower median          cover, but will be more discerning about
                                             the exposures they underwrite.”               QBE ‘most respected’
TCOIRs than those that did not.
                                                                                           Survey respondents rated QBE the most
Aon Risk Solutions corporate                 New Zealand respondents reported              overall respected insurer for the sixth
managing director Paul Venning               average increases of 35.25% for               consecutive year. Lloyd’s was the big
                                                                                           mover in 2011/12, rising five places to
                                                                                           become the second most respected.
                                                                                           Vero held onto third position for the
                                                                                           second consecutive year and Allianz
                                                                                           edged up from fifth to fourth place.
                                                                                           On a revenue band basis, Lloyd’s
                                                                                           jumped seven spots to claim the
                                                                                           number one position with revenues of
                                                                                           more than $1 billion, while Zurich, last
                                                                                           year’s most-respected in that category,
                                                                                           fell one spot to share equal second
                                                                                           with Chartis.
                                                                                           For respondents with revenues between
                                                                                           $100 million and $1 billion, QBE has
                                                                                           held the number one spot for the
                                                                                           second year running, while Lloyd’s rose
                                                                                           four places to become the second most
                                                                                           respected.
                                                                                           QBE also retained the number one
                                                                                           position in the $100 million and less
                                                                                           revenue category, while Allianz moved
                                                                                           up one place to be ranked number two
                                                                                           and Lloyd’s moved up three places into
                                                                                           third position. n

                                                                                                                   AILA NEWS   | 13
Profile
It’s all happening in Tassie
Litigation lawyer-turned-loss adjuster      Although Mr Farmer cannot recall
David Farmer has never regretted            when he joined AILA, he remembers
his decision 15 years ago to change         the training and presentations as
careers.                                    the reasons he became a member. “I
Since making the change, he has             remember thinking the training sessions
ventured down mine shafts, visited fish     were really interesting, so I signed up
farms and seen stunning resorts.            and started attending them. Since then,
                                            I’ve been heavily involved in AILA.”
“Being a loss adjuster is very
interesting. I get to see lots of places,   He said AILA’s education component
meet different people and learn about       was essential for the industry, especially
situations I normally wouldn’t be           its Tasmanian members. “There
exposed to.”                                aren’t many opportunities here to
Mr Farmer, who has been on the AILA         attend training sessions, so it’s really
Tasmania branch committee for 10 years,     important to have them.” Tasmanian
was elected branch chairman at last         AILA members were “a friendly bunch”.
year’s AGM. “When [former chairman]         “Quite a high percentage of the
Robert Webster was not [standing]           insurance, law and broker industry is
                                                                                          David Farmer sneaks some not-so-subtle
for re-election at the last AGM, he         involved in AILA,” he said.
                                                                                          ‘subliminal advertising’ into his photo shoot
suggested I put my hand up because I        Mr Farmer runs his own self-titled
have been on the board for a while. I       loss adjusting business. He specialises      connected with the industry, but sought
was chairman about five years ago.”         in liability, including work-related         a more flexible working arrangement.
Since taking up the position, he has        incidents. He conducts interviews,
                                                                                         In 1997, he decided to work as a
hit the ground running, especially          collects statements, and sifts through
                                            documents to create final reports for        loss adjuster. He was a director for
with Tasmania hosting the October                                                        a company trading as Crawford in
31-November 2 AILA national                 insurers and their lawyers.
                                                                                         Tasmania, before starting his own
conference. “Being on the conference        Like many in the industry, Mr Farmer
                                            did not intend to have a career in           company in 2009.
committee has been very interesting. I
have really enjoyed it and it’s been lots   insurance when he became a lawyer.           Mr Farmer and his wife Alison have two
of fun.”                                    After completing a law degree at the         children – Emily, 17, and Tom, 15. In
Mr Farmer encouraged members to             University of Tasmania, he undertook         his spare time, he enjoys watching his
attend the national conference, saying      an apprenticeship at a law firm in 1986.     “sporty” son play rugby and participate
it was shaping up as the best yet.          From 1987 to 1997, he worked in civil        in athletics. Although he enjoys short
“We really listened to feedback from        litigation, handling mainly common law
                                                                                         trips, Mr Farmer has not travelled
the last conference. People said they       cases involving work-related incidents
                                            and commercial actions.                      overseas since he was 16, when he
wanted the opportunity to do lots of                                                     went to Europe with his family. “We
things in the state.” Delegates and their   Although he enjoyed the work, Mr
                                                                                         don’t tend to take a lot of big holidays,
partners can visit the Museum of Old        Farmer said it was a difficult lifestyle.
and New Art, the Ratho Golf Links club,     “I reached a point where I thought,          but rather go to different places for
the Cascade Brewery, Bruny Island, the      ‘there has to be more to life than this’.    the weekend.” He enjoys fly fishing
Agrarian Kitchen, and the Real Tennis       I wanted to spend more time with             in Tasmania’s Central Highlands and
Club (see page 8).                          my family.” He still wanted to stay          sailing on the Derwent River. n



The world of insurance
From page 6                                 • Received progress reports about the        On my way to Istanbul, I met with the
At the London meeting, we will be             expansion into Africa and Asia;            Hong Kong Insurance Law Association.
                                            • Received more detail of the 2014           We discussed its activities and progress,
well advanced in planning for the
                                              World Congress including the social        the meetings in Istanbul and London
Presidential Council meeting during
                                              activities and the train transfer;
the September 2013 AILA National                                                         and what AILA is planning for Hobart.
                                            • Appointed two new members to the
Conference in Sydney.                         Scientific Council including Samim         I invited the members to think about
We hope many working parties will also        Unan from Turkey;                          other new regional chapters.
meet in Sydney. I will need to meet         • Considered the next round of by-law        AIDA and its national chapters are
with the Sydney Organising Committee          amendments which will be decided
                                                                                         about insurance law education, but
to identify and plan the additional           on in London;
                                            • Discussed subscription exemptions; and     the main outcome should be better
issues as a result of these meetings.
                                            • Considered the relationships between       insurance law, especially in countries
Otherwise, the Presidential Council           AIDA and the various ARIAS                 with greatest need. Our region provides
and/or executive meetings:                    organisations.                             many opportunities. n

14 | AILA NEWS
People
                   Curwoods has                                                       specialty underwriter. Mary-Catherine
                   appointed Emma                                                     McGrath has become Axis’s senior
                   O’Connor (left) a                                                  underwriter, professional lines, in the
                   special counsel in                                                 Sydney office. She previously held
                   its federal workers’                                               senior roles with Chartis and Liberty
                   compensation team.                                                 International Underwriters.
 Emma O’Connor     She was previously
                   with Sparke Helmore.           Bruce Butler & Justin Griffin       Berkley Re Australia has appointed
                                          Two partners and their teams have           Richard Pike chief marketing officer,
Tony Wheatley has been appointed          joined Moray & Agnew’s Melbourne            based in Sydney. He has 24 years’
WR Berkley Insurance Australia CEO,       insurance practice from boutique            experience in the UK reinsurance
effective from July. He was previously    insurance firm Monahan + Rowell.            market, most recently with Aon
Axis Specialty Australia’s COO.           Partners Bruce Butler and Justin Griffin    Benfield in London.
Christian Garling will continue as
                                          (above) and consultant Philip Rowell will
Berkley general manager.                                                              Australian Insurance Holdings (AIH)
                                          be joined by their team members special
                                          counsels Carmen Hodges and Mark             has appointed former Bank of
Zurich Financial Services has promoted
                                          O’Sullivan; senior associate Madelaine      Queensland chief operating officer Ram
Anthony Pagano from national broker
                                          August; and lawyers Victoria Chambers       Kangatharan as managing director and
manager to head its SME distribution
business.                                 and Ben Shoebridge.                         chief executive officer. AIH companies
                                                                                      include Auto & General Insurance
Insurance practitioner Rosemary           Axis Specialty Australia has promoted       (A&G) and its flagship brand Budget
Waldron-Hartfield has joined Moray        David Jones to Queensland manager,          Direct. AIH is part of the Budget
& Agnew’s Perth office as a partner       based in Brisbane. He was previously        Insurance group, which has major
from Sparke Helmore, where she was        a senior underwriter, financial lines, in   operations in South Africa and the
managing partner. She brought her         Axis’s Sydney office. Klaus Lejon has       UK. In a separate move, former ICA
team: Kerry Wood, who has joined          joined Axis as senior underwriter, IT       executive director and chief executive
as a partner; senior associate Agnes      and multimedia liability. He was most       officer Alan Mason has become a non-
Camilleri; and lawyer Anna Sasson.        recently Chubb technology insurance         executive director on the A&G board.



  AILA national board contacts
President:                                AIDA Representative:                        Nick Codd,
David Lee, Lee & Lyons Lawyers (NSW)      Michael Gill,                               Austbrokers (NSW)
Phone: 02 8273 8000                       DLA Piper Australia (NSW)                   Phone: 02 8913 1600
Email: dlee@leeandlyons.com.au            Phone: 02 9286 8419                         Email: nick.codd@aps.austb.com.au
Vice-President:                           Email: michael.gill@dlapiper.com
                                                                                      Kate Farrell,
Michael Raymond,                          Committee members:                          Proclaim Management Solutions (Qld)
Munich Holdings Australia (NSW)           John Homburg, Gilchrist Connell (SA)        Phone: 07 3232 3500
Phone: 02 9272 8179                       Phone: 08 8215 7030                         Email: kfarrell@proclaim.com.au
Email: mraymond@munichre.com              Email: jhomburg@gclegal.com.au
Immediate Past President:                                                             David Jesser,
                                          Roger Sands, Talbot Olivier (WA)            McInnes Wilson (Qld)
David McKenna, Jarman McKenna (WA)
                                          Phone: 08 9420 7100                         Phone: 07 3231 0641
Phone: 08 9492 2222
                                          Email: rsands@talbotolivier.com.au          Email: djesser@mcw.com.au
Email: dmckenna@jmck.com.au
Secretary:                                Robert Webster,                             Lance Schmidt,
Kim Bradey,                               Dobson Mitchell & Allport (Tas)             AFA Insurance Brokers (NT)
Thomsons Lawyers (Victoria)               Phone: 03 6210 0000                         Phone: 08 8981 6377
Phone: 03 8080 3522                       Email: robert.webster@doma.com.au           Email: lschmidt@afaib.com.au
Email: kbradey@thomsonslawyers.com.au     Steve Knight,                               Chris Rodd,
Treasurer:                                Dobson Mitchell & Allport (Tas)             CGU Insurance (Victoria)
John Fountain,                            Phone: 03 6210 0000                         Phone: 03 9601 8036
consultant lawyer (SA)                    Email: stephen.knight@doma.com.au           Email: chris.rodd@iag.com.au




                                                                                                           AILA NEWS   | 15
Diary                  For more information                     To contact AILA and NZILA:
2012
                       on AILA events, go to                    AILA ABN 81 052 374713
                       www.aila.com.au
                                                            AILA NATIONAL:
                                                            Web site: www.aila.com.au
Wednesday, June 6                                           President: David Lee, Lee & Lyons Lawyers;
AILA NSW Twilight Seminar Series                            Phone: 02 8273 8000; email: dlee@leeandlyons.com.au
What’s going on with ISR policies?                          Secretary: Kim Bradey, Thomsons Lawyers; phone: 03 8080 3522;
Go to www.aila.com.au                                       fax: 03 8080 3866; email: kbradey@thomsonslawyers.com.au
Wednesday, June 20                                          National Secretariat: Vickie Saccaro, McPhail & Partners Pty Ltd;
AILA NSW Twilight Seminar Series                            PO Box 93, Box Hill, Vic 3128; DX 12815 Box Hill;
The Financial Ombudsman Service                             phone: 03 9899 5382; fax: 03 9890 6310; email: national@aila.com.au
Go to www.aila.com.au
                                                            NEW ZEALAND:
Wednesday, July 11                                          Website: www.nzila.org
AILA NSW Twilight Seminar Series
                                                            President: Craig Langstone, Jones Fee; phone: +64 9 373 0053;
Practical aspects of dispute resolution                     fax: +64 9 379 3679; email: craig.langstone@jonesfee.com
Go to www.aila.com.au
                                                            Secretary: Frank Rose, Keegan Alexander;
Wednesday, July 18                                          phone: +64 9 303 1829; email: frose@keegan.co.nz
Underwriting Agencies Council expo | Brisbane
Go to www.uac.org.au                                        NEW SOUTH WALES:
                                                            Chairman: Justine Hall, Insurance Council of Australia;
Wednesday, July 25                                          phone: 02 9253 5122; email: jhall@insurancecouncil.com.au
AILA NSW Twilight Seminar Series
Latest trends in D&O                                        Secretary: Linda Hamilton, Hunt & Hunt;
                                                            phone: 02 9391 3112; email: lhamilton@hunthunt.com.au
Go to www.aila.com.au
                                                            Secretariat: Penny Paterson, PO Box 1241, Dee Why, NSW 2099;
Wednesday, August 8                                         DX 9147 Dee Why; phone: 02 9975 7198; fax: 02 9975 2998;
AILA NSW Twilight Seminar Series                            email: ailansw@bigpond.net.au
Proportionate liability
Go to www.aila.com.au                                       VICTORIA:
                                                            Chairman: Cameron Roberts, Herbert Geer;
August 23 – August 26
                                                            phone: 03 9641 8696; email: croberts@herbertgeer.com.au
Queensland Council of Insurance Brokers
Annual conference                                           Secretary/Treasurer: David Abell,
                                                            ANZ; phone: 03 8654 7096; email: abelld@anz.com
September 13 – September 14                                 Secretariat: Vickie Saccaro, McPhail & Partners Pty Ltd;
AIDA Europe Conference and Presidential Council             phone: 03 9899 5382; fax: 03 9890 6310; email: vic@aila.com.au
London
                                                            SOUTH AUSTRALIA:
Wednesday, September 12
Underwriting Agencies Council expo | Adelaide               Chairman: Anthony Hillary, Lawson Smith Lawyers; phone: 08 8210 2600;
                                                            fax: 08 8210 2666; email: ahillary@lawsonsmith.com.au
Go to www.uac.org.au
                                                            Secretary: Julie Kinnear, Fox Tucker Lawyers; phone: 08 8124 1812;
October 6 – October 9                                       fax: 08 8231 0014; email: julie.kinnear@foxtucker.com.au
National Insurance Brokers Association
                                                            Secretariat: Margaret Cloy, 18 Sims Cresent, West Lakes, SA 5021;
30th Annual Convention | Gold Coast                         phone: (08) 8356 0620; fax: 08 8353 8383; email: mackdog@telstra.com
October 31 – November 2
AILA National Conference | Hotel Grand Chancellor           WESTERN AUSTRALIA:
Hobart, Tasmania | Devil of a time                          Chairman: Stephen Williams, Kott Gunning;
                                                            phone: 08 9321 3755; email: swilliams@kottgunn.com.au
Thursday, November 15
                                                            Secretary: Susan Courthope, Allianz Australia;
AILA/ANZIIF Life Insurance Law Review                       phone: 08 9422 8452; email: susan.courthope@allianz.com.au
Sydney
                                                            Secretariat: Brian Moore, phone: 08 9761 2363; fax: 08 9761 4713;
November 22                                                 email: wa@aila.com.au, brian@jobry.com.au
Underwriting Agencies Council expo | Perth
Go to www.uac.org.au                                        QUEENSLAND:
                                                            Chairman: Rebecca Stevens, Carter Newell;
                                                            phone: 07 3000 8347; fax: 07 3000 8466; email: rstevens@carternewell.com.au
This newsletter is compiled by Kate Tilley Journalism Pty   Secretary: Tim Hancock, Quinlan Miller & Treston;
Ltd on behalf of the Australian Insurance Law Association   phone: 07 3223 6411; email: thancock@qmtlaw.com.au
and the New Zealand Insurance Law Association.              Secretariat: Kim Logan; phone: 07 3886 5861; email: qld@aila.com.au
Editor: Kate Tilley
                                                            TASMANIA:
Acting Editor: Renée Mickelburgh
                                                            Chairman: David Farmer, loss adjuster;
Editorial co-ordinator & journalist: Nicole Sosnowski       phone: 03 6270 2214; email: david@farmer.net.au
Please forward contributions to:                            Treasurer: Paul Dreissen, Willis Insurance Brokers; phone: 03 6235 8500
KT Journalism
PO Box 165, Spring Hill, Qld 4004                           NORTHERN TERRITORY
Phone (07) 3831 7500 | Email ktj@ktjournalism.com           Chairman: Lance Schmidt, AFA Insurance Brokers; phone: 08 8981 6377;
Copy deadline for the next issue is:                        email: lschmidt@afaib.com.au
August issue: Monday, July 9                                Secretary: Vicky Kossaris, Minter Ellison; phone: 08 8901 5927;
December issue: Monday, November 12                         fax: 08 8901 5901; email: vicky.kossaris@minterellison.com

16 | AILA NEWS

				
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