St Patrick’s Day bushfire victims ‘treading water’ as legal battles drag on for Victorian farmers

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Posted

December 20, 2018 15:57:26

Farmers devastated by fires in rural south-west Victoria say it could be years before they see any compensation, if any comes at all.

Key points:

  • The St Patrick’s Day fire started after a termite-ridden Powercor power pole snapped in high winds
  • Legal firm Maddens, through a class action, and three insurance companies have launched legal action
  • Farmers have until December 21 to decide which legal option to take

When fires ripped across Brad and Jill Porter’s dairy farm just after 9:00pm on St Patrick’s Day they were on holiday in Tasmania.

The pair got the last flight out of Hobart and arrived before dawn.

“It was dark. Although our central laneway was actually like an airport tarmac because the posts were all still glowing [burning from the fire],” Ms Porter said.

The farmers’ jersey dairy herd was directly in the line of fire.

“I remember I was on the back of the bike with Brad and I was saying ‘it’s alright, the cows are upright’, and he didn’t say anything,” she said.

“Looking back it was pretty naïve because when the sun came up in the morning there was three or four categories of cows.

“There was the standing dead, the walking dead, and then just the rest of them, I guess. It was pretty ordinary.”

High costs for access to courts

The fire started after a termite-ridden power pole snapped in high winds on a neighbouring property.

Eleven days later, Warrnambool legal firm Maddens launched a class action in Victoria’s Supreme Court, accusing electricity provider Powercor of negligence.

“We believe that Powercor ought to admit liability,” said Maddens’ principal lawyer Brendan Prendergast.

“The only issue should be rolling out the quantification of loss and damage.”

The company has denied the allegations, arguing in court documents that it met its legal obligations in relation to maintenance.

But the power company will be defending itself on two fronts as Maddens is not the only party wanting to sue them.

Three of the country’s largest insurance companies, which have paid out millions of dollars in fire claims, are also taking legal action.

“They look at a class action law firm, which is charging much higher rates, and say we don’t want to pay that. We want to do it ourselves,” said Michael Legg, a professor at the University of New South Wales Law School.

He said the high costs of running a class action is a fundamental problem with the scheme that has not been resolved.

“Whilst it has these economies of scale and it allows people to bring the actual action, the legal fees and litigation funding fees means the transaction costs are very high,” Professor Legg said.

“When you recover the compensation you lose a big chunk of that to the lawyers.”

Class action system under scrutiny

In addition to the high costs of a class action, the insurers also want to control the litigation and say the class action legal avenue takes too long to reach a resolution.

To encourage farmers to join their action, they have offered to sue Powercor for any uninsured losses the farmers suffered as well.

The farmers have until December 21 to decide which legal option to take.

In the meantime, the two legal teams have racked-up tens of thousands of dollars in fees over a series of court hearings — in some cases spending hours debating whether farmers’ legal options are being misrepresented in the media.

“At the end of the day, there will be an awful lot of money spent and incurred by solicitors,” farmer Jill Porter said.

“That would be much better off going back to the bushfire survivors, to get things going back to the way they were.”

So far, farmers are split over which action to join.

The stoush comes as the Law Reform Commission prepares to report on the efficacy of the class action system itself and how well it is delivering for the individuals involved.

In early December, the New South Wales Supreme Court finalised another Maddens class action relating to a Blue Mountains fire at Mount Victoria in 2013.

The settlement of just over $2.6 million was not enough to cover the legal fees, meaning there was nothing left for the victims.

Mr Prendergast said the firm has learnt from that experience.

“It’s unfortunate. No one’s lost any money, no one’s been required to pay anything,” Mr Prendergast said.

“But the unfortunate outcome is there’s been an inability to satisfy what would have otherwise been a substantial judgement.”

Mr Prendergast has defended Maddens’ record and said it had proven itself to be one of the country’s leading disaster class action firms.

“We have a long history of bushfire litigation. We acted for 400 people in the Ash Wednesday fires in 1983 and we’ve acted in numerous other fires in this region and other parts of Australia as well,” he said.

“Our focus is on obtaining maximum compensation for those individuals.”

He said he was expecting many millions of dollars to be recovered for fire victims in Garvoc and Terang, and that any legal costs incurred would be overseen and approved by the Supreme Court of Victoria.

“The question of costs is always supervised, scrutinised and ultimately approved by the courts,” Mr Prendergast said.

“It’s not something that Maddens’ lawyers or any other lawyers can just unilaterally impose.”

Private settlements go through

Meanwhile, a handful of landowners have bypassed the legal system altogether.

An uninsured bushfire victim in Terang, who did not want to be named, confirmed he had already put money in the bank after reaching an informal agreement with Powercor.

“It was pain free, it was quick and it was over,” he said.

The farmer said the amount was roughly half of his losses.

“They’re not being generous, but in some ways they are being fair,” he said.

The farmer said he wanted to avoid legal fees and wanted others to be aware they may have choices.

“This bushfire’s become a lawyers’ picnic. It’s become a money-making project,” said the Terang landowner.

“If 50 per cent of their claim is going to save their business, they have that option.”

The Supreme Court has advised those affected to get independent legal advice before making any decision on which avenue to take.

Farmer Brad Porter says most of the fire victims are still in recovery mode nine months on from the disaster.

“It’s just been like treading water,” Mr Porter said.

“I remember saying to my neighbour ‘there’ll only be one winner out of this and that’ll be solicitors’.

“I just look at it and shake my head.”

Topics:

law-crime-and-justice,

laws,

bushfire,

disasters-and-accidents,

insurance,

agricultural-insurance,

rural,

garvoc-3265,

warrnambool-3280



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