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Australia's Legal Sector Anticipates Flood Fallout

published January 22, 2011

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According to the Australian Broadcasting Corporation (ABC), insurance companies are undergoing intense criticism over whether or not their flood policies cover river floods, flash floods or issues with storm waters. The criticism is likely to go beyond just anger, however.

Scott Driscoll is the national president of the United Retail Federation. According to Driscoll, many businesses have contacted him, claiming they were denied insurance payouts. Driscoll says he has been in contact with law firms regarding a potential class action suit against the insurance companies.

''We have had some discussions with solicitors who are very, very interested to explore a class action further,” Driscoll said. ''We are certainly taking soundings from across our membership, which numbers the thousands across Queensland, and given the sort of determination that a lot of these businesses have and how they have been let down by the insurers, I think there is a lot of momentum.''

Those businesses may have some trouble, as Insurance Council of Australia rejected complaints from those who claim their insurance policies were too convoluted. ''Most of the definitions are written in very plain English and are very simple for a layman to understand,” says Karl Sullivan, the general manager of risk at the council. ''Unfortunately a lot of people maybe don't make the effort to understand what the risks are that they're facing,'' Sullivan added.

One thing is certain: law firms in Australia are going to be receiving a flood of business in the coming weeks and months.
Managing partner at the Brisbane firm, Michael Klug, said, ''I don't want to underestimate the enormity of what has occurred, but the re-building stage will create a good deal of work. I think we will have to be very ready to assist clients and help them as they look to get back on track.”

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