Insurers may strand Qld property victims
Insurers are reportedly intending to abandon solicitors with professional indemnity insurance, leaving thousands of victims of Queensland property scams unable to recoup their losses.
US-based insurer St Paul, the major insurer for lawyers, is believed to be concerned about the conduct of some solicitors and the amount of damages rising from claims. The insurer claims that many of the solicitors are in breach of their contracts, which cover them for negligence but not fraud or dishonesty.
Potential claims of $1.8 billion plus lawyers' costs and interest are estimated to arise out of property deals over the past decade in south-east Queensland. During this time, marketers stripped tens of millions of dollars from unwitting investors. The move by insurers will leave most of them without legal recourse to recoup large losses. Some will be able to claim through the Queensland Government's Property Claims Tribunal, putting financial pressure on the Claims Fund, which is facing 250 payouts of over $20 million. Over the past couple of weeks the tribunal has paid out more than $700,000 in five claims against National Asset Planning Corporation. Class action law firm Slater & Gordon lodged a further 70 claims in the tribunal on Monday. A Fair Trading spokesman has stated, however, that the Claims Funds will not be capped, saying that the fund is there to protect people and is underwritten by the Government.
Fair Trading set up a unit last year to investigate the “Mr Bigs” of Queensland property scams. It is believed to be close to laying charges.