Weather News

Queensland 2011 flood victims won a landmark class action but could still wait years for payouts

By Rebeka Powell and Rachel Riga, Wednesday December 4, 2019 - 09:54 EDT
ABC image
A class action found dam operators acted negligently in the lead up to the 2011 floods. - ABC

The victims of the 2011 Queensland flood disaster won a major class action against the State Government and dam operators Seqwater and Sunwater last week.

But with more than 6,800 claimants involved it's an incredibly complex decision (it took the judge an hour-and-a-half to deliver the summary) which has far reaching implications.

Here is what you need to know about the decision and what it means for, not only the flood victims, but also taxpayers.

What even happened?

We get it, it's that time of year when Christmas parties ramp up and holidays can't seem to come soon enough, so you're forgiven if you missed the landmark decision.

On Friday, New South Wales Supreme Court .

The claimants alleged that the dam operators and the State Government acted negligently and worse flooding resulted through their actions.



Justice Beech-Jones accepted that engineers whose job was to manage the Wivenhoe and Somerset dams before and during a "biblical" deluge in January 2011 had failed their duty of care.

About 23,000 homes and businesses went under in Brisbane and Ipswich when authorities released huge amounts of water to protect the dams' structural integrity.

How much is the bill?

Prior to the court handing down its decision, it was widely reported to be the largest ever class action in Australia with the bill estimated to be about $1 billion.



However, Maurice Blackburn — the firm representing the claimants — said they expected the bill to be in the "hundreds of millions" — still a hefty figure.

But it will take some time to sift through the thousands of individual cases because payments will take into account (i.e. subtract) any prior grants or funding received by the victims.

So we don't know an exact figure yet as Queensland Law Society President Bill Potts explains:

"It's a very complicated formula. A class action assumes that there are a large number of people who have suffered losses.

#alertme

"A total assessment or total sum of money is determined and then what has to happen is within that.

"We know from previous experience, for example the huge fires in Victoria a few years ago [Black Saturday] that there were huge amounts of money and the actual identification of the people at loss was not hard to do.

"But the actual giving out of the exact sums of money has taken years, so it's still a long journey.

"They may have to wait some time because it's not a matter of doling things out equally.

"[For example], if someone has lost their entire house as opposed to someone who has suffered damage to the carpets and paint, there has to be a proper assessment of the exact loss and how that money will be doled out to them in proper proportions."



Also, the class action was supported by litigation funders (a third party who provides financial resource to enable the case to proceed).

Flood action member and former Ipswich deputy mayor Paul Tully predicts litigation funders will receive between 30 to 35 per cent of the total damages amount.

It will also depend on whether the defendants (the Government and dam operators) decide to appeal the decision.

Just how much time are we talking here?

Well that depends. Realistically, the victims may not get their payouts until 2021 — a decade on from the disaster.



The State Government, Seqwater and Sunwater have 28 days to lodge an appeal against the judgement.

An appeal could see the matter go to the Court of Appeal and the High Court of Australia which could take another two years.

"You've got 6,800 claimants who have suffered for nine years," Mr Tully said.

"This is a very comprehensive judgement, this is not just a quick decision … it's a very powerful and detailed decision and I think to appeal this decision would send the wrong message."

Queensland's Attorney-General Yvette D'Ath acknowledged the ruling and would "closely examine the judgement before making any comment on a possible appeal".

If there's no appeal, the damages amount for each claimant still needs to be worked out.

Wait, why was it heard in NSW?

The case was heard in the New South Wales Supreme Court because of an "accident of time", Justice Beech-Jones said.

Class actions weren't able to be brought to the Supreme Court of Queensland until March 2017 when new legislation was introduced.

Fortunately, a claimant who lived in New South Wales and lost a business in the floods meant the case was able to progress through the NSW courts.

Rodriguez & Sons Pty Ltd became the lead claimant and thus Queensland residents were able to be part of the class action.




Where's the money coming from?

This is the million dollar (read: hundreds of millions) question right now.

It's not clear exactly where the money will be coming from.

But what we do know is that Seqwater and Sunwater (both statutory authorities) have their own insurance set-ups.

The State Government itself does not because it is too large to insure.



And while most people found responsible were from Seqwater and Sunwater, there was one person representing the State Government who was found negligent.

"The finding was that the state had vicarious liability through one individual who was a state employee who was acting in a different role at the time," Queensland Attorney-General Yvette D'Ath said.

"I'm expecting advice later this week, whether that advice is the full advice I am unsure until I see that."

It appears possible at this stage that some money will come from taxpayer funds.

"As many people may know the government itself self-insures," Mr Potts explained.

"So in essence whilst it is a win for the people who have suffered a loss, it is something where obviously the payments for these things is going to come out of general revenue."

What it means for insurers

The Insurance Council of Australia calculated that 38,460 individual claims were lodged with insurers as a result of the flooding.

"In today's dollars [insurers paid out] about $1.5 billion which of course makes it one of the largest natural disasters to hit Queensland in this decade," Insurance Council spokesman Campbell Fuller said.

He said the class action decision has no implications for people who were insured so claimants shouldn't expect to receive any payments from their insurers in relation to the funds they received.



But it is possible that insurance companies also make their own case against the State Government, Seqwater and Sunwater.

"Insurers will be reviewing the decision and the way the evidence was interpreted by the courts and whether the decision has commercial implications," Mr Fuller said.

"And by that those commercial implications may include whether insurers will seek some form of compensation for their own losses.

"But that will be a decision that each insurer will make on their own behalf."

Mr Fuller said the process would be lengthy and depends on whether there would be an appeal but there is a precedent for the insurance companies to pursue guilty parties.

I got flooded, can I get on board?

No. The class action is closed and new claimants aren't able to join.


- ABC

© ABC 2019

More breaking news

Sydney Morning Herald
ABC News
National Nine News
News Limited

Display Your Local Weather

Weather News

NSW bushfires close in on Sydney from two sides as weather forecast deteriorates

06:28 EDT

New South Wales' bushfire crisis arrived in Sydney yesterday, with two massive blazes threatening homes on two sides of the city.

Queensland weather stokes bushfires, leading to emergency warning north of Lowood

00:20 EDT

A number of fires have broken out in South-East Queensland on Friday afternoon amid a severe heatwave, with the community of Redbank Creek, north-west of Brisbane, told to leave immediately.

Sydney high school students say they have a greater appreciation for agriculture after farm excursion

19:05 EDT

City high students say their visit to a working farm has given them a greater insight into the realities of agriculture, especially in times of drought.