POOR ADVICE COST $2.4M
Richmond Valley joins class action against insurer
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