Superannuation funds have accepted far too many TPD claims without sufficient scrutiny over the last five years, delegates were told at the AIST Insurance Symposium in Sydney.
Prominent personal injury lawyer, John Berrill, a principal at Maurice Blackburn Lawyers, spoke in a heated panel discussion, in which he defended the role of lawyers in TPD claims and laid some of the blame on the current spike in claims on trustees and insurers.
He recommended that wherever there was a lack of evidence a TPD claim should be declined.
“You see so many claims where you say ‘Are you kidding? Was that accepted? I thought that would be more of a fight?’” he said. “Far too many have been accepted over the last five years.”
The sharp rise in TPD claims was not correlated to any change in legal case law or definition which made it easier to claim, he said.
He contrasted this with his own firm’s process for accepting case work.
“There is a significant proportion of people who we see and say ‘you ain’t got no claim’, either because they are still working or under rehab.”
Berrill laid part of the blame for high claims on a permissive sales culture at insurers, which encouraged them to compete aggressively for clients after choice of fund was given to members in 2005. He cited how the promotional materials of one insurer from 2006 indicated it would accept 96 per cent of claims.
To help cut claims he told delegates, it was legally permissible for insurers to put clauses in contracts that would place a seven year time limit on claims from the point of disability or illness.
He also advised funds to stand up to law firms that initiated a client’s claim with a demand to pay up within 28 days or to face court action.
“There are court authorities that say if you issue writs prematurely then you get hammered for it, so deal with it,” he said.
Berrill faced criticism from Michael Rooney, deputy chief executive of Media Super and Helen Hewett, executive of the Industry Funds Forum, for his suggestion that lawyers had an important role to play for members.
Both Hewett and Rooney argued that it was a trustee’s duty to act as an advocate for members, the same role a lawyer performed, but without the fee.
Berrill countered that some members were psychologically ill-equipped to make a claim or lacked sufficient knowledge of their superannuation fund and its process to make a successful claim.
He added, that in his experience superannuation funds were starting to become tougher in fighting claims and that the number of legacy claims had fallen off.