THE Australian Small Business and Family Enterprise Ombudsman Kate Carnell is concerned about a growing trend of insurance companies denying small businesses insurance and pricing them out of the market, launching an inquiry into insurance affordability and availability this week.

The inquiry will investigate the practices of the insurance industry that impact small businesses and consider whether small business insurance products are fit for purpose.

“My office has heard a number of complaints from small businesses regarding poor behaviour by insurance companies,” Ms Carnell said.

“Small businesses that have held insurance policies for over a decade without a single claim have been refused renewal. Others have discovered their renewal cost has more than doubled.

“We know of cases where small businesses with current policies have been subjected to major changes that have reduced their coverage without consent, and with no refund of premiums.”

The insurance inquiry will target a range of issues affecting small businesses including:

-       The availability and coverage of insurance policies provided to small business

-       Insurance policy affordability

-       The role of brokers in getting the right coverage

-       Contract changes that have not been agreed to and whether they amount to Unfair Contract Terms

-       Timeliness of insurance payouts and effectiveness of dispute resolution frameworks

-       The effectiveness of relevant codes of conduct and legislation, including if applicable penalties are adequate

“Insurance for small business is a practical and legal necessity,” Ms Carnell said.

“Small businesses can’t operate without public liability insurance but we are seeing entire industries either denied or facing unacceptably high charges. It’s a major issue that is forcing some small businesses to close.

“This creates a serious risk to Australia’s economic recovery at a very precarious time.”

Small and family businesses that have faced difficulties with their insurance companies are encouraged to complete an online survey or email This email address is being protected from spambots. You need JavaScript enabled to view it..

A final report is expected to be released by December.

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THE Queensland Resources Council told a state parliamentary committee today that the state’s investment profile in resources would slip even further, unless the Queensland Government committed to keeping royalties at current levels for the next 10 years.

A global survey of mining companies and investors released earlier this year by the Fraser Institute showed investors were seriously worried about Queensland’s investment potential.

Mr Macfarlane said the onset of COVID-19 would have eroded global investor confidence even further since then.

“When the survey was released in February, Western Australia ranked number one in the world in terms of investment attractiveness, South Australia ranked six, and the Northern Territory came in at 13,” he said.

“Unfortunately Queensland was 15th, which is well behind our state counterparts and incredibly disappointing for such a resource-rich state.”

Mr Macfarlane told the Economics and Governance Committee that Queensland needed certainty at a time of uncertainty, and the industry already paid the highest royalty rates in the country.

“The resources industry is not wanting to reduce what we already pay in terms of royalties, we just need the State Government to keep coal, metals and gas royalties at their current levels for the next decade,” he said.

“We’re also asking for a more streamlined project assessment and approval process, to make sure projects progress in reasonable timeframes.”

The State Government has previously committed to a three-year freeze on coal and metals, and a five-year commitment on gas.

 www.qrc.org.au

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THE House of Representatives Committee on Tax and Revenue will be holding a second public hearing for its inquiry into the Commissioner of Taxation Annual Report 2018-19.

Chair of the Committee, Jason Falinski MP, said the Committee is interested to hear from the Australian Tax Office (ATO) and Inspector-General of Taxation and Taxation Ombudsman about the ATO’s operations and improvements to processes and practices.

"In previous inquiries, the Committee has made a number of recommendations to the ATO, particularly regarding information technology systems and controls, taxpayers’ confidence in the ATO and dispute resolution. We look forward to hearing how previously identified issues have progressed and improved over the last two years," Mr Falinski said.

Further information about the inquiry is available on the Committee’s website.

Public hearing details

Date: Friday, 31 July 2020
Time: 8.30am to 12noon
Location: Committee Room 1R3, Parliament House, Canberra (via video/teleconference).

The hearings will be broadcast live at aph.gov.au/live.

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AUSTRALIAN's class action regime, including the role of litigation funding, has been an effective and reliable means of delivering access to justice, but contingency fees create undesirable ethical risks, the Law Council of Australia has told a parliamentary inquiry today. 

The Law Council of Australia President, Pauline Wright, told the Inquiry into Litigation Funding and the Regulation of the Class Action Industry, that while Australian class actions were working well, there were opportunities to improve the system.

"Litigation funding can promote access to justice, spread the risk of complex litigation and improve the efficiency of litigation by introducing commercial considerations that will aim to reduce costs," Ms Wright said.

"We therefore support carefully calibrated regulation of litigation funding, in particular by authorising increased oversight by the courts.

"One particular option is to authorise the courts to make common fund orders, which can encourage competition in the class actions market.

“Experience showed that the competitive pressure introduced by the common fund order regime, had a positive downward impact on commissions charged and increased the transparency of litigation funding arrangements," Ms Wright said.

"The Law Council also opposes any additional regulation of Australian legal practitioners. Legal practitioners are already among the most regulated professionals in the country. In addition, class action litigation lawyers are subject to additional intensive court oversight of their conduct."

On the question of contingency fees Ms Wright said the Law Council had formed the view that the positives did not outweigh the negatives.

"On balance, it is the position of the Law Council that contingency fee arrangements should not be supported," Ms Wright said. 

"The Law Council is not persuaded that potential marginal gains in access to justice are outweighed by the risks to the ethical duties of lawyers and the potential effect that any compromise of these duties could have on the interests of class members.”

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