ob体育 has commenced proceedings in the Federal Court against Youi Pty Ltd (Youi) for alleged breaches of the Insurance Contracts Act 1984, in relation to Youi鈥檚 duty of utmost good faith in handling a building and contents insurance claim made by a policyholder.
The policyholder first made an insurance claim in January 2017 following a severe hailstorm in their home town of Broken Hill in November 2016.
ob体育 alleges that Youi failed to meet the standard imposed by the duty in handling the claim as it took nearly two years to settle, with the repairs to the home finally being completed in November 2018.
ob体育 is seeking declarations in relation to s13 of the Insurance Contracts Act.
Background
At the time that this conduct took place, the Insurance Contracts Act did not impose any pecuniary penalties for a breach of the duty of utmost good faith, and so in these proceedings ob体育 seeks declarations that Youi breached the duty.
On 13 March 2019, the law was changed so that for any conduct in breach of that duty after that date ob体育 may also seek pecuniary penalties.听
Earlier this year the Government also consulted on legislation to regulate insurance claims handling as a financial service.听 If passed, these changes will enhance ob体育鈥檚 ability to promote fair, transparent and timely claims handling.
Youi was an Insurance Case Study detailed in the Financial Services Royal Commission (page 415).
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Editor's note:
The first case management hearing has been listed at 2:15pm on 22 May 2020.
Editor's note 2:
The first case management hearing, scheduled for 22 May 2020, has been vacated and听the Court ordered the matter be listed for hearing on a date to be fixed.
The Court also ordered the parties to complete a number of steps towards the hearing, including the filing of a Statement of Agreed Facts and Admissions by 12 June 2020.
Editor's note 3:
A hearing date has been listed by the Federal Court for 10.15am on Tuesday 8 September 2020.
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