Australia — THE first class action from the Black Saturday bushfires has been settled, with electricity distributor Powercor agreeing to pay Horsham residents and businesses up to $40 million.
The conditional settlement will result in Powercor paying 66 per cent of all losses from the Horsham fire.
It is expected to have significant implications for four other cases seeking to recover huge losses caused by the devastating fires.
Advertisement: Story continues below Given the result at Horsham, several large insurance companies are now expected to help finance other legal challenges. Maddens Lawyers and Maurice Blackburn are understood to be locked in negotiations with several insurance giants which have taken a passive role in the legal proceedings to this point.
The settlement requires approval from the Supreme Court next month, but faulty Powercor power lines were found to have caused the blaze that destroyed 13 houses and 2346 hectares on the outskirts of Horsham.
The payout of 66 per cent of losses includes an 11 per cent payment for interest owing.
While Powercor refused to accept legal liability as a condition of the settlement, the company conceded the fire began on land owned by local farmer Laurie Thomas after a live power line fell from a pole and ignited grass.
It was alleged several screws on the power line in question had come loose, which was blamed on inadequate maintenance.
Brendan Pendergast, a director of Maddens Lawyers, which mounted the Horsham class action, said the five-week trial uncovered a series of maintenance failures that could influence other legal challenges involving fallen power lines.
”I need to be careful with what I say, but there are many similarities between these fires and their causation, including those in Coleraine and Beechworth,” Mr Pendergast said.
The decision by Powercor’s lawyers to settle the matter is believed to have been influenced by the testimony of maintenance experts, including former SEC employees, who expressed serious concerns about the condition of Victoria’s ageing electricity assets.
Several criticised Powercor’s decision to move from three-yearly inspections of electricity infrastructure to inspections every five years.
The Kilmore East fire that claimed 119 lives has been blamed on a power line maintained by another electricity distributor, SP AusNet.
The Bushfire Royal Commission found the wire that broke was probably installed in 1968.
The class action for the Kilmore East blaze was recently deferred, and will not start until January 2013, but that case dwarfs all the others. As well as leaving 119 people dead, 1242 homes were destroyed. Lawyers there are expected to seek losses of up to $1 billion on behalf of thousands of victims.
SP AusNet has not admitted that its power line sparked the Kilmore East blaze, despite a finding by the royal commission that it did. Instead, the Singapore government-owned company has blamed the Country Fire Authority and other government agencies for failing to contain the fire.
Mr Pendergast said up to 300 farmers and local businesses could claim losses of almost $70 million from the Horsham fire alone.