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Wednesday, 9 May 1984
Page: 1812

Senator JACK EVANS(12.23) —It would be easy to resolve this matter if it were a simple matter of one party being absolutely right or the other party being absolutely wrong. We are talking about a situation which has arisen over many years in which insurance companies have had the opportunity to avoid their total obligation as a result of a misrepresentation on an insurance claim. Not only have they been one of the two parties to the dispute, but also they have had absolute power to resolve the dispute because it has been at their total discretion. My understanding of the insertion of this clause and, particularly, the clause as amended, and as agreed to, incidentally, by the insurance industry, is that there will now be the opportunity for an arbitrator, a court, to determine which party is right-the insurer or the insured. Frankly, I cannot see how there is a case against having arbitration in that sort of situation.

I can understand that the Liberal Party of Australia has to live with big business. It has comparatively little interest in consumers, whether they be individuals or small businesses. But in this situation the insurance companies, whether they be multinational insurance companies or the smaller Australian companies-have accepted that the balance needs to be redressed, at least to a degree. That redress rests not with the individual or the company making the claim but with the court. The court will be able to determine the degree of misrepresentation and its impact on the total insurance claim. In other words, it may be a misrepresentation or even a fraudulent claim which has a very minimal impact on the total claim. The position that existed until now has been that in those circumstances the total claim could be thrown out lock, stock and barrel. Some insurance companies that have taken advantage of that have grossly disadvantaged both insured people and organisations.

The Australian Democrats are willing to allow this new approach to be tried. As I indicated earlier in my second reading speech, we can see that there are possible dangers but we rely on the good sense of the courts to ensure that the dangers are not exacerbated and that the situation does not grow out of proportion. We support this clause. We do not support the Opposition's stance to have the balance remain in the hands of the insurance companies. We think that it is better for the courts to have the ability to determine who is right and who is wrong and that that is the just approach to a claim made by an insured party.