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Tuesday, 27 March 1973
Page: 751

Mr O'KEEFE (Paterson) - I desire to bring to the notice of this Parliament the matter of motor vehicle insurance policies being issued by a firm known as the Australian Motorists Insurance Co. Pty Ltd which operates from the ground floor, 225 George Street, Sydney with a postal address of Box 4, Post Office, George Street North, Sydney. A young man from Scone in my electorate entered into an agreement with this company for a $3,000 cover on a 1971Valiant Pacer sedan on 19th March 1971, to give cover until 19th March 1972. During the period of the policy, this young man was involved in a major accident and damage to the extent of $1,000 was done to his vehicle. A firm of solicitors in Scone, McLellan and Noonan, acted for him in relation to a claim arising out of this accident. On 23rd January 1973 the claim was rejected by the insurer and, after obtaining counsel's advice, it was decided not to take the matter further. This advice was given after an examination of clauses 12 and 13 of the agreement and for the purpose of the record 1 shall read these clauses to the House. They are in the finest print and one has to get a magnifying glass to read them. Clause 12 states:

All differences arising out of this Policy shall be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to the decision of two (2)' disinterested persons as Arbitrators, of whom one (1) shall be appointed in writing by each of the parties within two (2) calendar months after having been required so to do in writing by the other party. In case either party shall refuse or fail to appoint an Arbitrator within two (2) calendar months after receipt of notice in writing requiring an appointment, the other party shall be at liberty to appoint a sole Arbitrator; and in case of a disagreement between the Arbitrators, the difference shall be referred to the decision of an Umpire (who shall be a practising member of the Bar in the State in which such dispute arises) who shall have been appointed by them in writing before entering on the reference and who shall sit with the Arbitrators and preside at their meetings. The death of any party shall not revoke or effect the authority or powers of the Arbitrator, Arbitrators or Umpire respectively. And in the event of a death of an Arbitrator or Umpire, another shall in each case be appointed in his stead by the party or Arbitrators (as the case may be) by whom the Arbitrator or Umpire so dying was appointed. Each party shall pay his/her or their own costs of the reference and moiety of the costs of the award (including Arbitrators' and Umpire's fees. And it is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this Policy that the award of such Arbitrators or Umpire in respect of any such difference shall be first obtained.

Clause 13 states:

No action or suit shall be maintainable against the Company in respect of any claim hereunder unless the same shall have been referred to Arbitration as hereinbefore provided within six months (6) from the date of the occurrence of the accident or loss in respect of which the claim is made. And further no action or suit shall be maintainable against the Company unless proceedings are commenced within six months (6) from the date of the award in an Arbitration obtained in manner hereinbefore provided.

Clause 12 might be called a common arbitration clause but if it is examined it will he seen that the insured is required to pay his own costs of the arbitration proceedings plus one-half of the costs of the arbitrator even, it would appear, if he were successful. As these costs could well exceed $300 this is a real deterrent to taking any dispute to arbitration. However, clause 13 is even more harsh. In the present case the accident occurred in March 1972 but it was not until 23rd

January 1973 when the claim was rejected that any difference arose under the policy which could give rise to arbitration. This means that by failing to reply to a claim either by way of accepting it or refusing it, the insurer may be able to allow the period of 6 months to pass and may, therefore, be in a position of asserting that there is now no enforceable claim available.

I feel that the company to which I have referred, the Australian Motorists and General Insurance Co. Pty Ltd is acting in a way which is not in the best interests of the community and is bordering on dishonesty of purpose. I would like this matter to be checked by the Attorney-General (Senator Murphy) and some action taken to protect people who have the misfortune to insure with this company, the Australian Motorists and General Insurance Co. Pty Ltd. I have been asked by this young man to bring this matter forward and this request has the full backing of his solicitors, McLellan and Noonan, of Scone.

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