HIH liquidator Tony McGrath brought the HIH/FAI scandal to new depths last week when he filed a lawsuit against the Government regulators which approved the sale of FAI to HIH. And he’s also put PI insurers on notice that they should start looking worried, too, with claims pending against accountants and HIH’s actuary.

Mr McGrath is still trying to claw back some of the estimated $5.3 billion lost in the collapse of HIH in March last year. He has more than $4 billion to go. His claim alleges negligence by the Government and APRA and seeks unspecified damages. He filed similar actions against the HIH and FAI auditors Arthur Andersen, as well as the HIH actuary, David Slee.

Using evidence collected by the HIH Royal Commission as well as the Palmer report into APRA, Mr McGrath has a case that could show APRA and its predecessor, the Insurance and Superannuation Commission, were aware of FAI’s weaknesses since as long ago as 1974.

The claim alleges APRA’s approval of HIH’s plan to take over FAI had a “material bearing” on HIH’s decision to proceed. 

The final claim against the Government won’t be served until after the royal commission hands up its report to the Government in February.