POOR AD­VICE COST $2.4M

Rich­mond Val­ley joins class ac­tion against in­surer

The Northern Star - - FRONT PAGE - ALI­SON PATER­SON ali­son.pater­[email protected]­ern­star.com.au

A NORTH­ERN Rivers coun­cil is part of a mas­sive class ac­tion in­volv­ing a UK-based in­sur­ance bro­ker whose poor ad­vice al­legedly cost ratepay­ers mil­lions of dol­lars.

Rich­mond Val­ley Coun­cil gen­eral man­ager Vaughan Mac­don­ald said the coun­cil was part of an ac­tion rep­re­sented by lawyers Quinn Emanuel Urquhart & Sul­li­van who filed the suit against multi­na­tional bro­ker Jar­dine Lloyd Thomp­son (JLT) in the NSW Supreme Court on Thurs­day, “be­cause it was the right thing to do.”

Ac­cord­ing to court doc­u­ments, it is al­leged the firm had a fi­nan­cial in­ter­est in in­sur­ance schemes it bro­kered on be­half of more than 500 coun­cils across Aus­tralia, in­clud­ing 128 in NSW, which had in­flated Rich­mond Val­ley Coun­cil’s in­sur­ance pre­mi­ums by 50 per cent, cost­ing it $300,000 a year.

Mr Mac­don­ald said the fi­nan­cial ad­vice could have cost Rich­mond Val­ley Coun­cil about $2.4 mil­lion over the past decade.

He said this money could other­wise have been in­vested in much-needed lo­cal in­fra­struc­ture projects.

“Rich­mond Val­ley Coun­cil needed to lead the way on this is­sue,” he said.

“We have lots of in­fra­struc­ture such as four coun­cil swim­ming pools which need upgrading; we could use the money for the com­mu­nity in­stead of pay­ing in­flated, ex­ces­sive in­sur­ance pre­mi­ums.”

Mr Mac­don­ald said the com­mu­nity de­served bet­ter.

“We trusted that JLT were giv­ing us the right ad­vice re­gard­ing our in­sur­ance with Statewide Mu­tual, and mak­ing sure we paid the right amount for our in­sur­ance,” he said.

“Then, in 2017, Rich­mond Val­ley put its in­sur­ance out to ten­der, and ob­tained a sav­ing of 53 per cent on the premium we were pre­vi­ously pay­ing; that year alone the sav­ing was $300,000.”

He said the coun­cil took ad­vice from JLT from 2009 to un­til June 30, 2017.

“We hope to re­cover ex­ces­sive amounts of money and the re­gion of $2.4 mil­lion is not an un­rea­son­able amount,” Mr Mac­don­ald said. “The Royal Com­mis­sion into Mis­con­duct in the Bank­ing, Su­per­an­nu­a­tion and Fi­nan­cial Ser­vices In­dus­try shows ev­i­dence that a lot of big cor­po­ra­tions are more wor­ried about their bot­tom line than they are about look­ing after their clients.”

Six other coun­cils have also reg­is­tered for the class ac­tion.

A JLT spokes­woman said the com­pany was not mak­ing a com­ment at this time.

‘‘

WE HAVE LOTS OF IN­FRA­STRUC­TURE SUCH AS FOUR COUN­CIL SWIM­MING POOLS WHICH NEED UPGRADING, WE COULD USE THE MONEY FOR THE COM­MU­NITY IN­STEAD OF PAY­ING IN­FLATED, EX­CES­SIVE IN­SUR­ANCE PRE­MI­UMS.

RICH­MOND VAL­LEY COUN­CIL GM VAUGHAN MAC­DON­ALD

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.