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JLT vows to fight new Victorian class action

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JLT will fight a second class action brought against it by local councils alleging they have overpaid premiums while participating in mutual insurance arrangements established by the company.

Law firm Quinn Emanuel Urquhart & Sullivan has filed a writ in the Victorian Supreme Court after already launching a similar case in NSW.

“JLT believes there is no merit to these allegations and intends to defend this matter vigorously,” a spokesman told on Friday.

The Victorian action is led by Moira Shire Council in the state’s north, with Hobsons Bay City Council another of at least seven local governments participating, and seeks damages going back to 2009.

Moira Shire GM Simon Rennie says the council believes it paid excessive premiums while part of the JLT Municipal Asset Protection Plan (JMAPP).

“We also believe that JLT, by prioritising its interests over ours, earned fees and commissions from JMAPP at our expense,” he said.

“We estimate that the funds which Moira stands to recover through this action are substantial.”

The council says the evidence suggests local councils overpaid premiums by 30-50% when compared to what would have been available in the open market.

JLT, which was acquired by Marsh & McLennan earlier this year, provides insurance services to more than 500 councils across Australia and has repeatedly highlighted the benefits of its mutual schemes.

The company says its mutual insurance arrangements – under which the councils own the insurer – provide stability and confidence for local governments, regardless of the volatility in insurance markets, with their value demonstrated after the collapse of HIH and following the US September 11 attacks.

Quinn Emanuel last year filed a class action against JLT in the NSW Supreme Court, led by Richmond Valley Council. Financial support for the actions in both states is provided by litigation funder Harbour.

Michael Mills, a partner in the law firm, says additional local government class actions are still possible against the broker. “Other concerned councils in other states have similarly approached us to bring recovery actions.”