Victorian Supreme Court approval is being sought for a settlement of the local government class action against JLT, with a legal notice showing that councils won’t receive compensation from the firm under the proposals.

Supreme Court orders made on September 18 approved the distribution of a covering email and notice to all group members. The notice says that the parties have “agreed to settle the JLT Victoria class action” and that they are seeking court approval to end the proceeding.

“This means that the JLT Victoria Class Action will no longer be on foot, and the plaintiffs and group members will not receive any compensation from JLT,” the notice of proposed discontinuance says.

Group members have until October 16 to object, ahead of a court approval hearing listed for November 15, the orders made by Justice Kevin Lyons say.

The class action against JLT was commenced in the Supreme Court on June 28 2019, with Moira Shire Council and Hobsons Bay City Council the first and second plaintiffs.

Councils took action after becoming dissatisfied with the JLT Municipal Asset Protection Plan, which provided a pooled fund to manage the property and financial risks of municipal councils and other local government bodies.

The claim alleged that JLT breached general law, contractual and fiduciary duties it owed to group members, “who suffered loss or damage through payment of excessive premiums and through JLT’s receipt of undisclosed commissions and profits”.

“We have always stated that we will vigorously defend our position in the class action as we strongly believed that the allegations were misguided,” a JLT spokesperson told insuranceNEWS.com.au today.

The discontinuance notice advises that the councils and JLT entered into an agreement on September 13 to resolve the JLT Victoria Class Action, subject to the court’s approval.

The proposed terms outlined in the notice include that the class action be discontinued with no order as to costs, which means councils other than the plantiffs who have provided a release to JLT, may individually proceed with their claims if they wish.

Law firm Quinn Emanuel Urquhart & Sullivan also undertakes that it will not act for any local council in any state or territory in bringing or making a claim against JLT concerning issues the same or similar to the Victorian proceeding and will not “induce, encourage or procure any such local council to bring or make such a claim”. Similar terms would apply to Harbour Litigation Funding.

A separate local government class action was heard in the NSW Supreme Court in 2021, with councils arguing that JLT had breached its duties in failing to point out cheaper insurance alternatives in the market compared to the pooled scheme.

Justice Kate Williams last December found in favour of JLT in that case, ruling the firm was not acting as a broker for individual councils in conflict with its role as an adviser for the Statewide mutual scheme.

The Victorian orders and notice are available here.