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Heresay, The Australian Financial Review

Hearsay, The Australian Financial Review, 16 August 2002

Another egregious example of how insurers are profiting from clients with a clean claims history comes from Brisbane.

This time the victim is the owner of two local shopping centres who recently sought legal advice from consumer law firm Carter Capner on the consequences of not taking out public liability insurance.

The firm's senior partner, Peter Carter is unimpressed by the insurers' line that greedy consumers and lawyers are to blame. He says insurers want to ensure they continue raking in profits by staying claim-proof.

Also in a fighting mood is the Queensland branch of the Australian Plaintiff Lawyers Association.

APLA representative Ian Brown, also a Carter Capner partner, says it is time for insurers to publicly come clean about the real reason for steep premium rises.

"It's obvious from the recent Australian Prudential Regulation Authority report that it's got nothing to do with claims costs going up - the insurers just aren't making the money they used from investing on the global markets," he says.

APRA revealed insurers had suffered a 79 per cent fall in operating profits after a huge drop in global investment returns.

Carter says he has to warn the unnamed client that without public liability insurance it risked breaching its mortgage conditions and the financier would be quite within its rights to call up the loan immediately.

He says although it is standard practice for such insurance to be part of the financing agreement, his client was less than impressed about having to cop a whopping $53,500 rise when the premium came up for renewal this year (compared with $12,500 three years ago)despite never having made any claims. To make matters worse, in return for agreeing to a far higher excess of $100,000 (from just $1,000) the client was offered a paltry 10 per went reduction in the premium.

Carter says he would like to see codification of various classes of insurance so risk is made more definite and pricing is more transparent.

After a year of deliberation, Victoria's Crown Counsel, Peter Sallmann, has invited community comment on his proposals to deal with serious complaints against judges and magistrates and introduce a code of conduct for the state's judiciary.

No accurate figures for the courts are available, but the report says 43 complaints were filed against Victoria judges in 2000. Sallmann was also asked to review the existing legislation in relation to sacking judges, long acknowledged to be in dire need of reform.

Although the legal community strongly supported the notion of a standing committee to look at serious misconduct allegations, it strenuously opposed a NSW style judicial commission because it would reduce the judiciary's "independence, standing, morale and effectiveness".

The Victorian Attorney-General, Rob Hulls, who released Sallmann's discussion paper, The Judicial Conduct and Complaints System in Victoria, this week, told Hearsay the number of complaints against judges didn't seem to warrant a full-time Judicial Commission like the NSW model.

"It's using a sledgehammer to crack a nut," he said. Sallmann's final report is expected "in a few months", he said.