Legal claims follow green bungle

THE federal government is facing a raft of legal claims stemming from its disastrous green loans and home insulation programs.

THE federal government is facing a raft of legal claims stemming from its disastrous green loans and home insulation programs.

Most of the cases stem from the schemes' bungled administration and substandard installations.

Since February there have been 159 claims for compensation over the green loans program, according to the incoming government brief from the Department of Climate Change and Energy Efficiency.

There are also 14 separate legal matters outstanding in relation to the scheme, says the brief released after a Freedom of Information request from The Weekend Australian.

The program, which involved granting interest-free loans of up to $10,000 to improve energy efficiency in as many as 200,000 homes, was shelved by the Gillard government in July after the release of a series of audit reports critical of the program.

The brief reveals that a number of contractors are seeking compensation "due to inability to perform expected work due to claimed poor program administration, defective booking system (and) lack of control of assessor number".

Several non-contracted assessors are also suing over "losses due to incurring costs but not being able to participate in the program".

The home insulation program was axed in February following sustained reports of fraud, shoddy workmanship and 197 house fires.

The deaths of four young workmen were also linked to the loosely regulated project.

The government announced it would spend over $400 million to conduct safety checks of every house that received insulation under the scheme. In addition to the safety checks of the more than 200,000 households that received insulation under the program, the department has received 20 separate legal claims since February.

The 20 compensation cases fall into four categories -- householders' personal injury and damage or loss as a result of substandard installations; injuries sustained by inspectors during inspections; losses sustained by businesses due to early closure of the scheme (claimants include installers, manufacturers, logistics companies and a marketing company); and installers demanding payment for work claimed to have been undertaken.

The government admitted that the scheme had been linked to 197 house fire "incidents", many of which are still being investigated.

The report released yesterday also identifies potentially serious problems with the government's so-called "cash for clunkers" scheme, under which motorists receive a $2000 rebate if they trade in a car manufactured before 1995 for a new one with the necessary greenhouse rating. The department observes "it will be important that a rigorous fraud prevention, investigation and prosecution mechanism be incorporated from program conception".