Tasmanian Labor bankruptcy fears over sacked president’s defamation threat

Tasmanian ALP members fear the party could be bankrupted, after it failed to secure defamation insurance ahead of an expected writ from its dumped president.

Sacked Tasmanian ALP president Ben McGregor is expected to sue party figures, leading to fears of a financial crisis following the party’s failure to secure lawsuit insurance.

Members of the Tasmanian ALP fear the party could be bankrupted after it failed to secure defamation insurance ahead of an expected writ from its dumped president seeking substantial damages.

Former state president Ben McGregor – sacked by Labor’s nat­ional executive over his threats to sue party leader Rebecca White – is expected to lodge a writ within days, seeking damages for alleged aggravated defamation.

Some members believe the party’s national executive will use the prospect of bankruptcy from the legal action to justify a complete takeover of the local branch. 

It is understood Mr McGregor’s writs will target Ms White, as well as state secretary Stuart Benson, over their comments about and treatment of him following his April resignation as an election candidate, over “vulgar” text messages sent to a female friend.

Mr McGregor has apologised for the messages, sent seven years earlier, but accused “reaction­aries” within the party of orchestrating an attack on his candidature. He believes he has been denied natural justice and proper process.

Documents obtained by The Australian suggest the Tasmanian ALP has been trying to secure insurance against law suits but has been unable to find an insurer.

This has raised concerns that it will not be able to fund the legal bills associated with defending Mr McGregor’s claims, much less any resulting damages payout should he win. Several ALP figures now believe the legal action, coming as the Health and Community Ser­vices Union disaffiliates, could bankrupt the branch and precipitate a full national takeover.

Documents marked “strictly confidential” relating to an Oct­ober 8 meeting of the party’s special administrative committee suggest it had tried and failed to obtain directors’ liability insurance, which expired on September 30.  “We have approached 20 insurers and underwriting agencies who offer association liability and directors and officers products and … all declined to quote,” the party broker reported.

“There are now a large number of political parties … across all states … who can no longer obtain this form of insurance …

“Effectively, the number and frequency of employment, defamation, corruption and breach of duty claims in political parties over the past decade has caused it to become almost uninsurable.”

Three members of the party’s administrative committee have quit in recent days, including left-wing unionists Tim Jacobson, a former ally of Mr McGregor, and John Short.

Mr Jacobson and Mr Short have publicly attacked the national executive’s decision to sack Mr McGregor and cancel the party’s state conference. 

Sources said some members associated with HACSU – or even the union itself – may endorse or support non-Labor candidates at the federal election.

Mr Benson and Mr Jacobson did not respond to requests for comment. Mr McGregor declined to comment.

Mr McGregor’s defamation action is expected to focus on comments made by Ms White about this suitability for office, as well as more recent remarks by Mr Benson about the outcome of an investigation into the messages.