Insurance broker accused of ripping off ratepayers $300,000
RICHMOND Valley Council's legal fight against an insurance company that allegedly stole millions of dollars from ratepayers through inflated premiums continues.
The council in 2018 joined a major class action against the UK-based multinational insurance broker JLT Risk Solutions Pty Ltd alongside 10 other rural councils, including Parkes Shire Council and Mid-Western Regional Council.
It is alleged the insurance company engaged in commercially misleading conduct.
JLT had allegedly inflated insurance premiums by 50 per cent, costing Richmond Valley Council $300,000 a year.
The class action alleges JLT breached general law and contractual obligations, as well as its fiduciary duties.
The Northern Star in 2018 reported the firm allegedly had a financial interest in insurance schemes it brokered on behalf of more than 500 councils across the nation, including 128 in NSW.
Court documents at the time showed the broker then allegedly gave poor financial advice costing councils millions of dollars.
Richmond Valley Council's general manager Vaughn Macdonald will be presenting to the council on Tuesday the latest update on court proceedings, which is currently before the NSW Supreme Court.
"The class action relates to advice council received and relied upon from JLT in the placement of property and/or public liability and professional indemnity insurance through a scheme known as Statewide Mutual," Mr Macdonald stated in the council business papers.
"The class action alleges that JLT breached the general law and contractual duty owed to the plaintiffs to exercise reasonable care and skill in the performance of its broking services and in the provision of recommendations and advice.
"Further, it is alleged that JLT breached fiduciary duties owed to the plaintiffs in placing or renewing insurance through Statewide Mutual in circumstances where there was a conflict between the defendant's financial interest in earning fees and commissions for services it provided to Statewide Mutual."
Mr Macdonald said mediation was set down for December with JLT.
However, a substantive hearing is fixed to start on October 11, 2021 for an estimated 25 days.