HOME INSULATION PROGRAM CLASS ACTION
If you are or were a compliant HIP registered home retrofit insulation installer business OR a pre-existing insulation manufacturer established before 3 February 2009, then you may be eligible to participate in the class action seeking to recover damages against the Commonwealth of Australia due to the government’s conduct in prematurely cancelling the Home Insulation Program.
The Commonwealth Government’s Home Insulation Program was unexpectedly cancelled on 19 February 2010 (some 22 months early) following the death of four installers. The cancellation resulted in commercial devastation to the home insulation industry.
You can read more about the proposed class action below.
You can register on a confidential, no cost and no obligation basis to receive an information pack in three easy steps.
Step 1: Register your interest here. There is no obligation to join the class action.
Step 2: You will be sent an email with further information and documentation for joining the class action.
Step 3: Sign and return the documentation if you wish to join the class action.
For further information about the home insulation program class action and the funding to be provided by Harbour Litigation Funding, please call us on +61 2 9216 9898 or email your enquiries to firstname.lastname@example.org
BASIS OF ACTION
ACA Lawyers and McLaughlin & Riordan have obtain funding to investigate pursuing a class action against the Commonwealth Government following the cancellation of the HIP for alleged negligence, breach of contract and possible misleading and deceptive conduct pursuant to the Trade Practices Act 1974 (Cth).
The HIP was announced in a joint media release by former Prime Minister Rudd, Treasurer Swan and Environment Minister Garrett on 3 February 2009, as part of the “Nation Building Economic Stimulus Plan”. The Commonwealth committed to the installation of insulation in 2.7 million domestic premises throughout Australia by providing a rebate of up to $1,600 per installation. The HIP was to continue to 31 December 2011 and was administered by the Department of Environment (“DEWHA”). From time to time following its announcement, various Ministers and officers of the Commonwealth gave an undertaking that the HIP would continue until 31 December 2011 or until the budget had been spent. The original budget of $2.7 billion was revised in November 2009, to $2.45 billion.
It will be alleged that the Commonwealth had a duty to take reasonable care in the administration and delivery of the HIP, by reason of the fact that it was intentionally interfering with the existing market and was inducing businesses to invest in and expand their insulation businesses. The Commonwealth could not have achieved the stipulated goals of the HIP unless the pre-existing installation businesses and manufacturers, as well as new businesses, invested heavily in the insulation industry. It will be alleged that the Commonwealth breached its duty by failing to properly identify and manage risks associated with the HIP; and that the cancellation of the HIP was as a result of the Commonwealth’s negligence in the administration of the HIP.
The HIP was cancelled without notice on Friday 19 February 2010, with just under $1 billion of the budget left to be spent. Registered installers were notified by email and text message. As a result of the HIP and its termination, very many insulation businesses suffered severe financial hardship. Cash flows ceased and ongoing financial commitments could not be met. The market demand for domestic retrofit insulation was ruined. Investments made by installation and manufacturing businesses did not deliver returns. Businesses purchased large volumes of stock that have become almost valueless. This loss of value in turn caused bankruptcies, liquidations, and loss of homes and assets.
It is alleged that the Commonwealth breached its duty of care by negligently designing and/or administering the HIP and failing to properly identify and manage inherent risks by:
failing to institute an administrative procedure by which the Commonwealth monitored the workplace safety of the installers, and ensured that the installers worked under safe systems of work;
failing to ensure that installers were trained;
failing to ensure that supervisors were supervising the installation of insulation by untrained and inexperienced installers;
failing to ensure that installers were informed of the dangers of installing roll-out foil as insulation;
failing to ensure that pre-installation hazard and risk assessments were formulated and conducted prior to installation work being undertaken in ceiling spaces;
failing to ensure that the States and Territories enforced installer compliance with OH&S requirements;
failing to have any proper regard to the risks of working in ceiling spaces and the risks of installing insulation in ceiling spaces.
No business or industry body was informed prior to 19 February 2010, of the termination of the HIP. The Commonwealth actively encouraged businesses (both pre and post-HIP businesses) to act in reliance upon the Representations by installing installation in homes until 31 December 2011 or until the funds were exhausted.
At the time the HIP was announced there were approximately 270 entities throughout Australia in the business of installing insulation in existing domestic premises. By February 2010, over 10,000 additional or “new” installation businesses had registered with DEWHA under the HIP.
It will be alleged that as a result of the Commonwealth’s negligence and the early termination of the HIP without warning, the eligible claimants suffered loss and damage, including:
- Loss of profits.
- Loss of the value of stock, storage, leasing and on-costs.
- Loss arising out of the leasing and/or purchase of capital equipment to be used in the supply of insulation.
- Loss arising out of the termination of contracts of employment with employees.
- Loss of the investments made in the business.
- Loss to the value of the business.
- Loss of the return on the profits from the business.
- Consequential losses.
- Loss arising out of the administration or the winding-up of the entities that operated the business, including accountancy fees, legal fees and insolvency practitioner fees.
In addition to the alleged negligence, the class action will be seeking damages for alleged breach of contract, negligent misstatement and misleading and deceptive conduct.
The Australian Government made clear that the funds committed to the HIP were sufficient to complete its stated objectives of insulating 2.7 million homes and that it would continue until 31 December 2011 or alternatively, until the allocated funds were exhausted. These assurances (ie representations), made unambiguously and directly to industry, caused industry to invest in their businesses and to engage staff. Much of this would not have occurred had the Australian Government not given such assurances, or made clear that it reserved its right to terminate, suspend or change the HIP at any time without notice. That is because a very much larger number of installations were to take place under the HIP than previously, and at a very much more rapid rate.
Litigation funder Harbour Fund III LP is funding the class action, subject to reaching a minimum sign up threshold from eligible claimants.
You can access copies of judgments received during the proceedings below.
1. Who is running the class actions?
ACA Lawyers is an Australian law firm that focuses on commercial litigation and specialises in class actions. Further information about ACA Lawyers is available at www.acalawyers.com.au.
McLaughlin & Riordan is also an Australian firm with extensive experience in commercial litigation, and which has a long standing relationship with a large portion of the claimant group and a historical involvement in this dispute with a thorough knowledge of the facts and circumstances. Further information about McLaughlin & Riordan is available at http://www.mclaughlin.com.au.
ACA Lawyers and McLaughlin & Riordan are working together on this class action in order to provide the best team with the most valuable skills to this unique claim.
2. What is the class action about?
The class action alleges that the negligent design and implementation of the HIP from January 2009 led, firstly, to significant investment by well-established insulation businesses to meet increased demand, and ultimately to extensive losses suffered by those businesses and by the retrofit insulation industry as a whole when the HIP was abruptly suspended in February 2010.
3. Who is the class action against?
The proposed class action is to be brought against the Commonwealth of Australia. Having entered the field of the retrofit insulation industry, the Commonwealth Government had a duty to take reasonable care to minimise the risk of foreseeable economic loss to pre-existing insulation businesses registered under the HIP from defective design, implementation and/or operation of the HIP.
4. How was the government negligent?
The action alleges that the Government was negligent in, among other things:
- Failing to include training requirements as conditions for registration under the HIP,
- Failing to heed industry and expert warnings in relation to product standards and safety concerns, and
- Failing to provide for the foreseeable negative economic impacts of the HIP in light of its high incentives and short designated timeframe of 2½ years between 1 July 2009 and 31 December 2011.
5. How does the class action work?
Class actions, also known as representative proceedings, are actions brought by multiple people on their own behalf and on behalf of a group of people (“group members”) against the same defendant/s, where the group members’ claims against the defendant/s arise out of the same or similar circumstances.
6. How much will the class action cost?
There is no upfront cost to you. Harbour as the funder is paying the legal costs and will be entitled to a commission based on the amount you recover in respect of the proposed class action.
You will not ever be required to pay any ‘out-of-pocket’ costs. In the event the claim is successful, either by way of judgment or settlement, we will seek to recover costs from the Commonwealth of Australia. Any costs which are not recovered directly from the Commonwealth of Australia may come out of the total damages recovered (subject to any order of the court).
In the event that the proposed class action is unsuccessful, all costs will be paid by Harbour.
7. Who is eligble for the class action?
The proposed class action will be brought on behalf of pre-existing insulation businesses who suffered economic loss as a result of the negligent operation of the HIP.
You are eligible to join the class action if:
(a) you are/were the owner or director of a business involved in retrofitting insulation before 3 February 2009, or
you are/were the owner or director of a business which manufactured insulation before 3 February 2009,
(b) you suffered economic loss as a result of the HIP.
We are also accepting registrations of interest from:
i. new businesses (those which commenced operation in retrofitting insulation or the manufacture of insulation after 3 February 2009); and
ii. importers and suppliers of insulation (whether before or after 3 February 2009),
however these classes are not yet approved for inclusion in the class action, and may not be included. Your registration ensures that if approval is extended to these classes, you will be notified and given the opportunity to participate.
If you want to know if you are eligible to join the proposed class action please contact us.
8. What about the Home Insulation Program Industry Payment Scheme (HIP-IPS)?
Registering for this class action will not affect your right to claim under the HIP-IPS, however if you accept a payment under the HIP-IPS you will not be able to participate in the class action.
9. What damages can be awarded?
The class action will claim damages for economic loss. The amount of damages will vary from business to business, or person to person, depending upon their individual circumstances.
The types or ‘heads’ of damages that can be claimed are:
- Costs incurred and thrown away as a result of the suspension of the HIP prematurely and without notice
- Loss of business profits from 20 February 2010 to 31 December 2010 and alternatively to 31 December 2011
- Loss or diminution in the value of the claimant business
- Personal economic losses associated with business losses
10. What sorts of damages are not being claimed?
The types of damages that we will not be claiming for are as follows:
- Personal injury, or
- Psychological harm
You should be aware that time limits apply for such claims.
11. How long will any legal proceedings take?
We expect that the class action will take anywhere between one and three years. A number of factors can influence the length of time proceedings may take including the complexity of the litigation and the conduct of the defendants to any class action.
12. Will my contact details be kept private?
Your personal information will only be used for the purpose of the legal proceedings, or as required by the Court or by law. In any other circumstances, we will seek your consent before disclosing any of your personal information. We will not disclose any personal information to third parties, including other clients, except as may be necessary for the purposes of the legal proceedings. A more detailed privacy statement can be found in the terms of our retainer.
13. What do I have to do to participate?
If you believe you may be eligible for the class action and would like to participate, please register your details at www.acaclassactions.com.au or contact us at:
Tel: (02) 9216-9898.
Once you have registered we will provide you with further information on joining the proposed class action and a Claimant Pack, including a funding agreement and our retainer. If you wish to engage ACA Lawyers and McLaughlin & Riordan you will need to sign and return these documents (or accept them electronically on the ACA Class Actions website) as soon as possible.
Signed documents can be sent to:
HIP Class Action
Level 3, 44 Martin Place
Sydney NSW 2000
Although your documents should be returned to ACA Lawyers, you may be contacted in response to your registration by either ACA Lawyers or McLaughlin & Riordan.