Rowe v Ausnet Electricity Services Pty Ltd & Ors

2 There is an identical settlement distribution scheme established in respect of the Kilmore-East Kinglake group proceeding that is being supervised by J Forrest J. The scheme administrator has taken advantage of the efficiencies that flow from administering both schemes through a single process. However, I am only concerned to supervise the Murrundindi settlement.

3 A case management conference was convened for the scheme administrator to report to the court on the progress of the administration. From that progress report two specific issues arose. The first was the need for an amendment of the deed and the second concerned the appointment of a special referee to properly inform the court about the claims made by the scheme administrator for payment of costs of administration of the scheme. I will return to these matters.

4 The scheme administrator filed an affidavit sworn 16 March 2016 that explained in some considerable detail the progress of the administration of the scheme. I will provide a brief outline of the process. In his rulings since approval of the settlement of the Kilmore-East Kinglake group proceeding, J Forrest J has set out a reasonably detailed explanation of the structure and processes of the settlement and reference can be made to his Honour's rulings[1] for greater detail.

5 The object of the scheme is to distribute the settlement sum of $300,000,000 amongst the group members whose claims in total are expected to exceed the amount available for distribution. It is only when the assessments have been substantially completed that the scheme administrator is in a position to determine the dividend to be paid from the scheme in settlement of claims.

6 The scheme creates two separate funds and thus two streams of individual assessment for group members. First, there is the assessment of claims for personal injury and dependency and, secondly, there are claims for economic loss and property damage. In the latter category there can be an overlay of subrogated claims that only cover part of an insured claimant's total loss leaving a second claim in respect of the same property for the uninsured portion.

7 To commence the settlement process the Administrator and his team developed and distributed a comprehensive brochure to group members setting out their rights under the scheme and explaining the principles which would be applied and the process that would be followed. Claimants for personal injury and dependency compensation completed an electronic survey which gave basic information and was followed up by a detailed questionnaire prepared in conjunction with the Administrator's staff. That information formed the basis of a brief to an assessor tasked to assess the quantum of each group member's claim.

8 In making these assessments, reliance is ordinarily placed on treating practitioners' reports and only in exceptional circumstances are medico-legal examinations obtained. There is a process for identifying those exceptional cases.

9 The scheme administrator reported that there had been bottlenecks in obtaining authorities from group members and documents from medical practitioners, particularly psychologists, and there was, at one stage, difficulties experienced in obtaining information from the Australian Taxation Office, although these difficulties have now been resolved.

10 Once the assessor is briefed, a conference is arranged between the group member and the assessor at which further information may be obtained. To ensure fairness, once all relevant information is to hand the assessor prepares an assessment in accordance with an agreed template. Further, assessors undertake training to bring maximum efficiency, uniformity of approach and compliance with the settlement deed to the assessment task. Group members are entitled to seek a review of their assessment.

11 At the time of settlement there were 394 registered personal injury claims. There have been 9 additional late registrants, a total of 403 claimants. In addition, there is approximately another 100 odd claimants who will include some claims for personal injury and dependency.

12 By the case management conference 86 group members had either attended a conference with the assessor or were scheduled to attend. Of those, 41 assessments have been returned to the scheme administrator and 22 notices of assessment and statements of reasons have been sent out to group members. Further, 35 group members stated they no longer wished to proceed to an assessment and have been allocated a nil assessment. There remain approximately 290 claimants awaiting a conference and an assessment. To date, no group member has sought a review of his or her assessment.

13 Turning to the economic loss and property damage claims, there are 2243 such claims, comprised of 989 claims for uninsured or underinsured property losses and 1245 insured (subrogated) property loss claims. These claims are assessed on an individual property basis and there are five firms appointed to undertake these assessments. It is estimated that there are 1029 individual properties to be assessed of which 542 include an above-insurance claim. There is a process of audit to ensure both consistency and compliance with the scheme.

14 The need to iron out some issues that had arisen in the Kilmore scheme with respect to the assessment of economic loss and property damage claims resulted in some delay in those assessments commencing. It is not necessary to explore the reasons for that delay. I am satisfied that it was appropriate for the scheme administrator to re-design the process of assessment of economic loss and property damage claims to eliminate inefficiencies and concentrate the efforts of assessors when attending at a single property address.

15 Once the assessors have issued a provisional notice of assessment a group member has 14 days to provide any further information for a final assessment. Once that is issued there is again a review process. At this stage there have not been any final assessments of economic loss and property damage issued to group members. However, about one third of the properties with an above-insurance claim have been allocated to assessors and 73 properties involving an insurer only claim have been allocated to one assessor.

16 The scheme administrator has negotiated with the assessor firms for an increased volume of assessments and appointed a further assessing firm (increasing the number of assessors to five). He anticipates that provisional notices of assessment for all economic loss and property damage claimants will be issued by 29 July 2016 and, taking into account review periods, this will permit the distribution of settlement funds towards the end of 2016 or early 2017.

17 At the time of the case management conference 113 claimants had sought late registration, and the Administrator has considered the evidence supporting inclusion in the settlement for 29 of those claimants. Eighteen claimants have been admitted, 7 claims rejected, with the remainder requiring further consideration once more information was received. A deadline of 3 March 2016 was imposed for receipt of late claims.

18 The scheme permits interim payments and the Administrator has received 11 applications on the basis of extraordinary need. Of these, 2 claimants have been assessed as eligible for compensation and one of those claimants has been assessed as eligible for an interim payment. The remaining claims are being processed.

19 One of the bottlenecks that is causing delay in finalising the administration has been timely performance by the independent assessors of the personal injury claims. The settlement deed defines an assessor as a member of the Victorian Bar appointed by the scheme administrator. Initially 19 assessors were retained, but the numbers have been increased to improve the assessment rate. Presently, 34 members of counsel experienced in acting for plaintiffs in personal injury litigation act as assessors. They have gone through a process of engagement and training designed to ensure that their assessments are in accordance with the uniform application between differing group members. Their engagement is on a piecemeal basis.

20 The scheme administrator has experienced some difficulty in ensuring expeditious assessment by all assessors. The Administrator has made reasonable efforts to expedite the performance of the assessments, without complete success. It is now clear that the Administrator's assessment that a distribution may be achieved by the end of this year or early next year is dependent upon improving the rate of completing assessments and reducing the backlog of outstanding assessments. For that purpose, the scheme administrator seeks an amendment of the settlement deed to permit the engagement of appropriately qualified assessors from outside of the Victorian Bar.

21 Section 33ZF of the Supreme Court Act, 1986 gives the court a general power to make orders.

In any proceeding (including an appeal) conducted under this Part the Court may, of its own motion or on application by a party, make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding.

22 Having carefully considered the matter, I consider that the amendment sought will enhance the benefits for group members through completion of the scheme with no risk of detriment to them. As I have explained, there is ample systemic protection to ensure the uniform application of correct principle in completing these assessments that is not dependent upon assessors being qualified as members of the Victorian Bar.

23 I am satisfied that an amendment of the settlement deed in the following terms is appropriate to permit the timely and cost-efficient completion of the settlement scheme and will contribute to achieving justice for group members. I will order that in Overview paragraph C(iv)(a) the words 'or solicitor' shall be inserted after the word 'barrister'. In clause A1.1(j) the definition of I-D assessor shall be amended by inclusion of the underlined words -

I-D Assessor means a member of the Victorian Bar or an experienced personal injury solicitor appointed by the Scheme Administrator to undertake I-D assessments and I-D Review Assessments

24 The next issue is that the scheme administrator also seeks, pursuant to ss 33V and 33ZF of the Act and section 1.1 of the settlement deed, approval to pay Maurice Blackburn $1,805,688.11, comprising the plaintiffs' costs and disbursements for the period of 1 May 2015 to 27 May 2015 in the sum of $434,450.43 and settlement administration costs and disbursements in the sum of $1,371,551.18 for the period 20 June 2015 to 31 January 2016.

25 In the Kilmore-East Kinglake proceeding, J Forrest J appointed Mr John White as a special referee to provide audit services in respect of costs claims submitted by the scheme administrator.[2] Mr Watson proposes, and I agree, that Mr White should be appointed to provide similar services as a special referee in respect of costs claims in the settlement administration of Murrindindi. Orders will be made to appoint a costs consultant to scrutinise the administration costs. Inquiries are presently been made to determine whether it is appropriate to appoint Mr White to that role.

26 Further consideration of the costs claimed by the scheme administrator is deferred until a special referee has been appointed and their report received. It is likely that further orders for payment of the administration costs and disbursements will be authorised before 30 June 2016.

27 In the Kilmore proceeding an issue has also arisen about replacement of senior counsel appointed to monitor the progress of the scheme following the elevation of Mr A Keogh SC to this court. The Murrindindi scheme does not contain any provision for the appointment of counsel to undertake this role but the court has ample power under s 33ZF. Such an appointment is appropriate to ensure a just administration of the scheme and because the Murrundindi and Kilmore schemes are identical in structure and process and administered by the same scheme administrator and team.

28 Finally, I record my intention to seek further reports from the scheme administrator on the progress of the administration of the Murrindindi settlement deed. In further recognition of the commonality between the Murrindindi settlement scheme and the Kilmore settlement scheme, I agree with the scheme administrator's submission that further case management conferences in respect of settlement administration be held jointly with case management conferences in Kilmore on 21 June 2016 at 9:30 am. I will direct that the scheme administrator file an affidavit informing the court of the progress of the administration 7 days prior to that conference.

[1] Matthews v AusNet Electricity Services Pty Ltd (Ruling No. 40) [2015] VSC 131, Matthews v AusNet Electricity Services Pty Ltd (Ruling No. 41) [2016] VSC 171.

[2] See Matthews v AusNet Electricity Services Pty Ltd (Ruling No. 40) [2015] VSC 131.