Third Party Property Claims Third Party Property Claims

Matter Examples

Third Party Property Claims

Building & Construction
  • We acted for insurers of a plumbing company that carried out major works at an office building in the Sydney CBD. During those works, a flange failed and flooded the basement of the building. The owner suffered significant financial loss. We successfully argued that the plumbing company was entitled to indemnity under the head contractor’s policy with no recourse to the underwriter’s policy.

  • Lane Cove Tunnel Project We acted for the insurers of the joint venture (subsidiaries of Leighton) responsible for the design and construction of the Lane Cover Tunnel Project on multiple claims resulting from the partial collapse of the tunnel. We successfully resolved over 70 claims for property damage, pure economic loss and business interruption in an environment where there was intense media interest and political pressure. We achieved this result by using a coordinated approach involving key stakeholders that included, Leighton senior management, the broker, London market insurers, government and loss adjusters. Subsequently, we advised and acted on a $20 million successful subrogated recovery action in the Supreme Court against sub-consultants who worked on the project.

  • We acted for a Lloyd’s Syndicate in relation to a matter involving over 2,000 related third-party property damage claims at a large number of residential properties and apartments quantified at up to $60 million. By undertaking comprehensive factual investigations and retaining appropriately qualified experts as soon as possible, we were able to show that the damage occurred outside the relevant policy period and that liability should be shifted to subsequent insurers.

  • We acted for developers in three sets of proceedings in the ACT issued by the adjacent property owners against the developers, as well as seven other defendants. The claim involved the failure of a retaining wall at the development of a six-storey commercial and residential block that damaged the adjacent property owners’ building and common property. Following a two-day mediation, we settled the matter.

  • We are currently acting for an insurer of a plumber that was responsible for plumbing works in a boutique apartment complex. It is alleged that extensive defects exist requiring the entire building to be demolished. Our client is one of three insurers of the plumber over a period of time. When claims were first made in relation to a small number of alleged defects, our client was the first insurer to respond. At that point, we raised a number of issues about the developer that concerned us. Subsequently, we undertook extensive investigations and obtained expert evidence in relation to the construction phase. As a result, no further action was taken against the plumber by the developer. Later on, the developer made a claim on its own insurer. The insurer accepted the claims and has now commenced subrogated proceedings in the Supreme Court of Victoria seeking recovery of approximately $17 million (the cost to demolish the building and re-build). Due to our early investigation and collection of information, we were able to establish that the vast majority of the alleged defects were caused or contributed to by the developer and that the defects that do exist occurred when our client was not on risk.

  • We acted for a head contractor in relation to potential claims totalling $12 million by strata owners and principals arising out of alleged defective windows that were installed in a number of exclusive development complexes. We obtained indemnity from the glazing supplier in one of the developments and this meant that we were able to avoid claims being issued by the owners’ corporation or developer. In order to secure the indemnity from the glazing supplier, we obtained expert evidence in relation to the cause of the defects. This meant that potential liability exposure was shifted to the glazing supplier and glazing manufacturer in the other two developments. We issued a number of preliminary discovery applications against the glazing supplier’s broker and insurer to obtain copies of its insurance policies because the company had been deregistered. No proceedings have been issued against our client and, even if they were, are now arguably statute barred.

  • We acted for a Queensland local authority that struck a cable in a claim for property damage and pure economic loss. The resulting damage caused a shutdown of a local refinery. A $15 million claims was brought by the owner of the local refinery for loss of production. We used an alternative dispute resolution process and retained numerous experts. We managed to reach an early favourable resolution for 50% of reserve on the basis that the owner of the local refinery would not be able to establish that our client owed a duty of care.  Throughout the negotiations, we adopted an aggressive but pragmatic defence with a focus on achieving an early resolution of the matter.

  • We acted in case involving damage to property that also involved indemnity issues. A property owner constructed various levees on his property to manage annual flood waters. The plaintiff alleged that this work led to water being channelled in the direction of their property causing multi-million dollar crop losses. The quantum was in excess of $2 million. There were a number of significant indemnity issues regarding whether the policy responded. Ultimately, the claim was denied. However, the insured contested the insurer’s decision in the Supreme Court, which meant there was a risk of adverse media interest. We adopted a proactive media-sensitive media strategy to minimise public exposure, which involved successfully resolving the matter with a nominal settlement.

  • We acted for the insurer of a large Australian local authority. The local authority had approved the construction of a levy bank that was negligently constructed and caused damage to properties adjoining the bank. As a result, the local authority made significant payments to the affected property owners. Subsequently, we commenced recovery proceedings against the firm of engineers that designed the levy bank. As a result, the local authority was able to recover a large proportion of its exposure.

  • We acted for an insured who was a company engaged to install and certify fire resistant systems during construction of an apartment building. The insured was the ninth defendant in a claim commenced by the body corporate of a residential apartment building and the registered proprietors of a number of lots within that building after damage was caused by a deliberately lit fire in one of the units of the apartment building. The litigation was complex because there were 15 plaintiffs and 10 defendants and one third party. In addition, a large amount of expert evidence was obtained on behalf of the parties to the litigation, including on behalf of the insured. The primary issue was liability between the various defendants. The matter was on the Supreme Court supervised case list.  At mediation, the matter settled with a minimal contribution of only about 10% on behalf of the insured.

  • We defended an $8 million claim for alleged defective waterproofing work at an apartment complex. Some aspects of the claim related to private lots. However, as the body corporate was the sole plaintiff (meaning that the individual owners were not also named as plaintiffs) the loss was limited to alleged damage to common property. We conducted extensive factual investigations and they provided strong grounds for deflecting liability to the principal building contractor.

  • We acted for overseas underwriters who insured a construction company specialising in tenancy fitouts. The insured caused two significant water damage events at a major retail shopping centre over the course of three days at the start of the tenancy fitout. We ‘held hands’ with the insured to resolve each of the claims by the 15 tenancies affected by the events. We also established reporting protocol with the underwriters to ensure prompt settlement authority was received and the payment of funds was made quickly. This enabled the insured to preserve its working relationship with the shopping centre owner despite these unfortunate events.
  • We acted for overseas underwriters who insured a sheet piling company. The plaintiff issued proceedings against the builder, as well as the insured sub-contractor, alleging damage to the neighbouring property due to subsistence caused by the sheet piling works. We were able to successfully resolve the matter at the early stages of litigation through informal negotiations. In doing so, we were able to secure the bulk of the contribution to the settlement from the builder who had failed to undertake proper due diligence enquiries before the works commenced, thereby limiting the insured’s exposure to the claim.

Fire Damage
  • We acted for a client in two matters in rural areas involving the escape of fire as a result of negligent activities by its insured.  Both matters involved early consideration of indemnity issues. The first matter involved multiple mediations resulting in the early resolution of multiple claims. The second matter involved a ‘difficult’ insured and the examination on site of the subject topography to support our client’s prospects of an early and cost-effective resolution of the matter.

  • We acted for a Lloyds Syndicate in relation to a $4 million fire at a storage facility. The insured owner of the complex claimed indemnity under the policy and issues arose as to whether the fire was deliberately lit by the insured. Forty tenants made claims against the insured owner alleging their losses resulted from the negligence of the owner and, in turn, breaches of the standard lease agreement. We ensured that the claims were mediated quickly and at a reduced cost to the client, which demonstrated our ability to handle multiple large, high-profile losses.

  • We acted for an interior fitout contractor whose subcontractor’s contemporaneous works caused a fire at historic premises.  The fire was exacerbated by the presence of flammable material near the subcontractor’s works. The litigated subrogated recovery action against several parties was resolved at mediation with only a commercial contribution from our client representing legal costs for the first day of trial.

  • We acted in defence of a restaurant owner in a claim made by adjacent property owners arising from a fire that commenced in the restaurant. By using the expert evidence and focusing on the issue of liability, we were able to settle the matter with the claimants and avoid formal legal proceedings.

Industrial Accidents
  • We acted for an insured who was responsible for a large-scale uncontrolled release of a corrosive substance that damaged hundreds of properties and vehicles in the surrounding area. The value of the claims totalled $3 million. We worked closely with the loss adjusters to ensure the claims were all valued and settled within a short period of time and prior to any of them being litigated.

  • We acted for overseas underwriters who insured a bulk chemical storage company. The insured caused two different chemicals to be erroneously mixed in the bulk chemical storage that lead to damage to property owned by a number of different parties (including two separate transport companies) based in Darwin, Sydney and the United States. We assisted in reaching an informal resolution of the claim with the numerous parties involved. Through these lengthy negotiations, a plan was implemented for the separation of the chemicals and rectification of associated damage. In addition, it was possible to avoid the costs associated with litigated proceedings, as well as maintaining the commercial relationship that existed between the insured and their US-based client.
  • We acted for a property manager on a $1 million claim by the landlord for property damage caused by a substantial amount of illegal landfill material being dumped at the property by tenants resulting in contamination of the site. The liability issue involved whether the property manager had conducted inspections in accordance with the obligations in the management agreement and the extent to which any of its breaches contributed to the loss primarily caused by the tenants.

  • We defended a property claim that NTI (a truck insurer) brought against our client for dual insurance following the load of a semi-trailer causing damage. We recommended that our client defend the claim as its policy did not respond to the loss due to vehicle exclusion. Rather than resort to litigation, we encouraged our client have the issue appraised by a QC. The QC found in our client’s favour. The matter was a good example of looking outside the square to enhance the interests of our client.

  • We acted for a rail operator in respect of claims involving damage to rail infrastructure caused by a derailment of its train and also the claim for consequential losses due to the inability to use the tracks and meet contractual obligations.

  • We advised an insurer client in relation to various transport claims where stock in transit was damaged and subrogated recovery pursued against negligent transporting operators. These matters involved careful analysis of the terms of the transit agreements, detailed high-level investigations and aggressive pursuit of the negligent parties involved.

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