Richmond Valley Council is fighting to recover what it considers to be inflated insurance premiums in NSW Supreme Court

More local councils urged to join class action against multinational insurance broker after the company allegedly inflated insurance premiums, costing ratepayers money.

Richmond Valley Council achieves milestone win in class action fight against multinational insurance broker.

Richmond Valley Council has achieved a significant win against multinational insurance broker Jardine Lloyd Thompson (JLT) in its fight to recover what it considers to be inflated insurance premiums paid over several years.

Council is the lead plaintiff in a class action filed by Quinn Emanuel Urquhart & Sullivan which alleges that JLT breached its obligations to Richmond Valley and other NSW local councils when it provided advice on their insurance arrangements.

Since the action was filed in 2018, 12 other councils have joined Richmond Valley’s fight to have the alleged super-profits made by JLT in its dealings with councils returned for the benefit of ratepayers.

In a judgment handed down on April 16, NSW Supreme Court Justice David Hammerschlag dismissed JLT’s application to bring an end to the class action, decisively rejecting JLT’s arguments that other NSW councils should not be able to benefit from Richmond Valley Council’s lead.

The Court further ordered JLT to pay the costs incurred on behalf of the class in defending JLT’s failed bid.

The class action alleges that JLT breached general law and contractual obligations, as well as fiduciary duties, owed to it and other NSW councils when it placed them in JLT-managed insurance schemes.

In 2017, Richmond Valley Council put its insurance portfolio out to tender and obtained a saving of 53 per cent on the premium previously paid to JLT – a saving of $300,000 to ratepayers for that year alone.

Richmond Valley Council general manager Vaughan Macdonald.

In response to the Court’s judgment, Richmond Valley Council General Manager Vaughan Macdonald said the council’s leading role in the class action had always been about “doing what’s right for the Richmond Valley community”.

“Richmond Valley needed to lead the way on this issue,” Mr Macdonald said.

“We did not taken this action lightly. We simply want JLT’s millions of dollars of super-profits which have been generated over at least a 10-year period, to be returned to ratepayers, so they can be rightly invested into much needed local infrastructure.”

In the wake of Friday’s judgment, the class action will now proceed to trial in October for the benefit of Richmond Valley ratepayers and other NSW councils which have consented to be group members (or who consent in the near term).

“In leading this action, I’m confident we will be joined by many more councils in NSW who face the same financial challenges we do to remain sustainable in providing services and infrastructure for our communities,” Mr Macdonald said.

“Given the current economic impacts of the COVID-19 pandemic, these funds being returned to councils will be more important than ever for communities when the recovery commences.”

The matter is next before the Court on May 28.

The full list of councils involved in the class action include Burwood Council, Gunnedah Shire Council, Kiama Municipal Council, Kyogle Council, Lismore City Council Mid-Western Regional Council, Orange City Council, Parkes Shire Council, Port Macquarie-Hastings Council, Shellharbour City Council, Willoughby City Council and Yass Valley Council.

The class action comes at no cost to councils, as it is funded by leading global litigation funders Harbour Fund III LP, with legal services provided by Sydney-based law firm Quinn Emanuel Urquhart & Sullivan.