‘No win, no pay’ flood class action looming

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9 July 2012

Law firm Maurice Blackburn has confirmed it is close to filing for a class action lawsuit against Queensland Government-owned utility Seqwater for the mismanagement of the Wivenhoe Dam.

In March the inquiry into the Brisbane River floods of January last year found that the manual governing the operation of the dam was breached, with engineers failing to release adequate water early enough.

The operators were also found to have failed to take account of rainfall forecasts at the time.

The statements of three engineers were found to be false and have been referred to the Crime and Misconduct Commission.

Maurice Blackburn principal Damian Scattini says overseas experts have been briefed for the class action.

“We’ll make an announcement by late July,” he told insuranceNEWS.com.au.

The findings of the inquiry propelled the class action strategy, with around 3400 people now participating in the “no win, no pay” suit.

Mr Scattini says the class action will not yet seek pain and suffering damages, since this falls within personal injury protocol under Queensland legislation “and is quite separate”. He says these aspects might be addressed at a later date.

The lawsuit could potentially cost the state as much as $1 billion.

IMF Australia is the litigation funder behind the class action and will pay all legal costs involved, regardless of the outcome.

IMF Executive Director John Walker says the compensation claims could exceed the state’s insurance cover.

“They have about $200 million in insurance,” he said. It’s understood an extra $900 million has been allocated from the state’s own reserves.

He says the flood victims “deserve to know if the loss they suffered could have been avoided and whether the state should be held accountable and compensate them for their loss”.

A Seqwater spokesman told insuranceNEWS.com.au its insurance costs have “at least doubled in the 2011/12 financial year” due to “general market increase in insurance rates, an increase in our premiums due to the January 2011 flood and increases made by Seqwater to its insurance levels”.

According to Brisbane newspaper The Courier Mail, a single premium of $1.2 million was paid by Seqwater to Aon. However, an Aon spokesman told insuranceNEWS.com.au the company is unable to confirm the transaction and is not in a position to comment.