Australia’s catastrophic fires and weather events have dominated the news cycle for many months now. Fires, dust storms, hail storms and months of poor air quality have affected large tracts of land, including entire rural communities and major cities. Over 18million hectares of land has been burnt throughout the 2019/20 bushfire season already, and nearly 9,000 related insurance claims have been made.
The recovery period will involve many legal and financial claims involving insurers, charitable organisations, government and private citizens. Already many disputes have been reported in the news.
It is likely that many people whose property was lost or damaged were under-insured or not insured at all. Some of these people will find themselves in conflict with their insurers. Consumer group Choice’s advice on home insurance cover for bushfires illustrates many of the issues that may be misunderstood by people who have taken out home insurance and lead to disputes. Insurers have forecast a rise in premiums following the fires.
Renters and landowners may find themselves in dispute over who is responsible for clean-up, whether damaged property is liveable or whether or not the lease can be terminated.
Donations to assist recovery from The Australian bushfires have been made by private citizens and companies both domestically and internationally. Donors expected that their donations would reach their intended recipients quickly and assist with recovery. However, some charities have been criticised for their slowness to distribute funds or aid, and also for the proportion of donations that they have retained for administration costs. Others have been restricted about what purposes they are able to use donations for, and have had to weigh competing priorities. Concerns have been raised about the difference between the intentions of donors and the purposes for which the recipient organisation is able to use the donated funds.
It is also predicted that many business affected by the bushfires will have disputes with their insurance companies over the coming months. Many business owners have “business disruption insurance” or “loss of attraction insurance” but lack clarity about what exactly is covered by these kinds of policy. Indirect consequences of natural disaster may not be sufficiently covered. Some policies cover lost profits and not turnover.
“Profit is very different from turnover,” Keane told The Sydney Morning Herald. “You may get people coming in expecting half a million [in cover] across 12 months and getting much less. The person is quite often incredibly traumatised if claims have gone off track at that point and they feel like it’s them against this massive company.”https://www.insurancebusinessmag.com/au/news/breaking-news/many-small-businesses-will-likely-face-insurance-disputes-postbushfires-211134.aspx
Several dispute resolution processes are available to assist people to manage post-disaster conflict. Processes applying to insurance and tenancy disputes are explained below.
Disputes between Insurer and Insured
The Australian Financial Complaints Authority (AFCA) assists claimants who have a dispute with their insurance company. AFCA has activated a dedicated hotline 1 800 337 4443 to ensure priority service for people affected by the bushfire crisis.They also have a dedicated online information hub and representatives physically in affected areas. AFCA is frequently asked to mediate financial disputes arising from natural disasters, and can assist in relation to business as well as home losses.
“AFCA is an ombudsman service that provides free, fair, and independent help with financial disputes,” said Justin Untersteiner, AFCA chief operating officer. “If you’re affected by the bushfires, and you find yourself in a dispute with your insurer or financial provider about a claim or request for assistance, AFCA can help resolve it. We have special processes that identify and fast-track complaints from people, primary producers and small businesses in impacted communities, so we can assist you to resolve complaints as quickly as possible.”https://www.insurancebusinessmag.com/au/news/breaking-news/afca-activates-bushfire-support-line-211308.aspx
AFCA has also triggered its significant events response plan in anticipation of damages of around $320 million following the catastrophic hailstorms that affected Melbourne, The Australian Capital Territory and parts of New South Wales on Monday 20th January 2020. The significant events response plan involves early communication with interested parties, and a more streamlined and expedited dispute resolution process.
Disputes between landowner and tenant
The Tenants Union of NSW has published advice about disaster damage and tenant’s rights. They offer an advice and advocacy service. Unresolved disputes can be referred to the NSW Civil and Administrative Tribunal. The processes used at NSWCAT include unassisted negotiation, conciliation and Tribunal hearing.
Disaster Legal Help Victoria has published information for tenants and landowners of property affected by disaster. Domestic tenants and landowners can refer disputes to the Victorian Civil and Administrative Tribunal. Commercial tenants and landowners can refer disputes to the Small Business Commissioner for mediation or VCAT. Dispute Resolution services at VCAT include mediation, compulsory conferences and fast track mediation and hearing.
Tenants Queensland has also published information for fire affected tenants and landowners. They offer free legal advice to tenants. Disputes can be referred to the Residential Tenancies Authority for conciliation. Unresolved disputes can be referred to the Queensland Civil and Administrative Tribunal for determination.
Legal Aid Tasmania has published information for tenants affected by a natural disaster. Unresolved disputes need to be referred to the Magistrates Court of Tasmania, where conciliation processes are used prior to hearing.
Legal Aid Western Australia has also produced a fact sheet for residential and commercial tenants whose properties have been affected by natural disasters. Residential Lease disputes that the parties are unable to resolve between themselves can be referred to Tenancy WA (advice for residential renters) or the WA Department of Commerce – Consumer Protection for advice, with unresolved disputes going to the Magistrates Court of WA (mediation or determination). Commercial lease disputes can be referred to the Small Business Development Corporation (case management and mediation) or the State Administrative Tribunal (conciliation or determination).