Landowners in the Victorian regional centre of Horsham who joined a class action against electricity utility Powercor after losing property in the December 2009 bushfires have been offered a conditional settlement which may have implications for insurers.

The settlement in the Victorian Supreme Court last week will see Powercor picking up 66% of the cost of all losses from the fire. The payout to the 67 landowners who joined the class action is expected to be around $40 million.

The Horsham fire that was the centre of the court case was caused by sparks from a fallen powerline. The resulting blaze destroyed 13 homes and the local golf club.

Powercor was accused of negligence by failing to ensure the upkeep of power poles. Inspections of poles had decreased in frequency from every third year to every fifth year.

The payout, which is expected to be approved by the Supreme Court on November 22, is understood to include an 11% interest provision.

Maddens Lawyers director Brendan Pendergast, whose company was involved in forming and prosecuting the class action, told insuranceNEWS.com.au the settlement may influence other bushfire legal actions.

He says bushfires at Coleraine and Beechworth in the same period bore many similarities to the Horsham fires, “and so there are implications”.

The Age newspaper says several large insurance companies may help finance similar legal challenges, with plaintiff law firms “understood to be locked in negotiations with several insurance giants which have taken a passive role in the legal proceedings to this point”.

Mr Pendergast says Powercor did not accept legal liability in the settlement, but did concede the fire was caused by a live powerline falling off a pole and setting fire to grass.