The pressure on underwriting returns means paid property claims are no longer treated as “dead money”. Many insurers are looking at recoveries as a genuine source of income.

To maximise recovery income, the decision to pursue subrogation needs to be made quickly and with the right tools. That’s why insurers need lawyers who think like plaintiffs, know the boundaries, protocols and pressures of an insurance company, and look at both sides of the claim equation.

This is particularly important with commercial claims that are typically of lower value and don’t always involve multiple parties. These claims can be active property losses with time critical factors, or close-to-finished indemnity adjustments. The issues must be quickly identified and the recovery efficiently resolved.

Major loss, multi-party recoveries with factually or forensically complicated issues have the added spectre of reputational importance and regularly call for active engagement of the co-insurers and the wider market.

Recent work

We advised on a claim regarding a diesel spill, which was caused by an unauthorised intruder at the insured’s premises and the subsequent failure of a liner designed to contain a spill.

The more than AUD $15 million loss included the diesel recovery efforts, excavation of contaminated soil and ongoing 5+ year remediation works. There was a significant uninsured component and a large insurance market involved in this matter. A major contributory negligence claim was made against the insured following the commencement of a recovery action.

We delivered timely updates to the large international insurance market. We managed the insured’s interests in the recovery actions, which meant they understand the priority of distribution of recovery proceeds but remained keenly involved in the recovery.

The barge was operated by a construction company that was completing works at a neighbouring property. It broke free from its cyclone mooring and caused more than AUD $5 million damage to the wharf.

As the incident took place on water, we advised on the relevant UN Convention for Limitation of Liability in Maritime Claims as it applied to each potential defendant, as well as the non-delegable duties of a head contractor. We also efficiently gathered information from uncooperative third parties involved in, or responsible, for the incident. That investigation resulted in a joinder of two additional defendants, and a potential circumvention of the UN Convention limiting the recovery.

We acted for insurers of a subsea power cable running between Tasmania and the Australian mainland which suffered a 9 month outage after a contractor damaged key infrastructure at a transition station. Working with a team of international experts we successfully recovered an 8 figure sum for the subrogating insurers after negotiating a settlement shortly after commencement of proceedings.

We acted for a market of local and overseas insurers following a flashover in gas insulated switch (GIS) gear at the Victorian desalination plant. The total section 1 and section 2 losses exceeded AUD $50 million. We successfully pursued the joint venture (who constructed the GIS) and the contractor (who serviced the GIS) in Victorian Supreme Court proceedings which settled after day 1 of the hearing.

Suppression foam was released due to water from high pressure cleaning entering the fire alarm system at the insured’s premises. The incident caused damage to stock and almost AUD $2 million in cleaning costs as the suppression foam contained pollutants. There was no evidence that the high pressure cleaning had been conducted in a negligent manner. We advised on legislative avenues for insurers to recover the costs of the pollutant from clean-up from the high-pressure cleaners.

We acted for a market of local and international insurers of a major property group follow a large lithium battery fire at a homemaker centre in Northern NSW. We were very strategic in the sourcing of expert evidence and used our many contacts in the electrical energy space to achieve a successful outcome for the insurers.

We acted for the subrogating insurer of a recently constructed large warehouse which collapsed during a storm. Expert investigations revealed a series of design and construction defects which resulted in critical weaknesses in the roof structure. We commenced proceedings against the building contractor and structural designer. After long running and heavily contested proceedings we secured a settlement which resulted in a recovery for insurers of the entire principal loss, all interest and a substantial portion of insurers’ costs.