The Australian Financial Complaints Authority (AFCA) has defended its decision not to determine car dealer add-on insurance cases if the complainants have not opted out of a class action lodged against Allianz, dismissing as “without merit” criticism from claims management firm Claimo that the move was unfair to its clients.

AFCA says it has the “discretion” under its rules to exclude some complaints if complainants are already part of a class action. It says a class action has been launched against Allianz over the same products and unless the complainant has opted out of the class action then the complainants represented by Claimo are part of the class subject to the class action.

“We look at each one on an individual basis,” AFCA Insurance Ombudsman John Price told insuranceNEWS.com.au.

“Claimo is a paid representative and it appears that in those complaints in which Claimo is involved the individuals have not opted out of the class action.”

Under federal and state laws, anyone who falls within the definition of a class action automatically becomes a member, regardless of whether they know about it or not. And all class members are bound by any court judgment or court-approved settlement, unless they opt out of the class action before a certain date as set by the court.

A spokesman for Maurice Blackburn, the plaintiff law firm that commenced the group lawsuit against Allianz last November in the Supreme Court of Victoria, told insuranceNEWS.com.au yesterday the opt-out process “is not underway as yet”.

Mr Price says AFCA will always give a complainant “the opportunity to prove” he or she has opted out of a class action.

“There is no merit to what Claimo is saying,” Mr Price said. “There is a process for class actions. If they have opted out, then we will look at them.”

Claimo has accused AFCA of denying complainants the right to pursue a claim against Allianz individually when group members have not been notified of the class action and when an opt-out notice is unavailable.

It says AFCA decided differently in a class action against ANZ over consumer credit insurance sales.

As reported by insuranceNEWS.com.au, Claimo’s clients who did not want to join the ANZ class action pursued their claims through AFCA after the financial dispute resolution body decided not to exercise its discretion to exclude the complaints.

AFCA says “this is because the court has not yet published the statement of claim or any other court documents or required the financial firm to send opt-out notices to related parties which will enable us to reassess our jurisdiction”.

“We have published a fact sheet that sets out how the process works. We do not deny a complainant the right to bring the matter through [external dispute resolution process] but if a person remains part of the class then the relevant Federal or State legislation will apply.”

The Consumer Action Law Centre has weighed into AFCA’s latest decision not to look into add-on complaints against Allianz.

"Class actions fulfil an important role for everyday Australians seeking fairness and justice through our court system,” Senior Solicitor Insurance Anna Meulman told insuranceNEWS.com.au. “However it is essential that people can access free and independent external dispute resolution services instead where they so choose, such as through AFCA.”

She says the important thing is that people are given the choice as to how they wish to progress their dispute.

“Shutting the gate on [external dispute resolution] just because a class action exists denies people the option of resolving their dispute more efficiently, from both a cost and time standpoint.

“A person going through [external dispute resolution] or a class action would not be permitted to ‘double dip’ on compensation, and so there does not appear to be a sound basis for removing their ability to elect which forum they prefer.

“The ruling appears to impede principles of natural justice and fairness and is of concern to Consumer Action Law Centre.”

Click here to access the AFCA fact sheet on class actions affecting complaints.