Lawyers Still Causing Claims Headaches

Lawyers who submit group insurance disability claims are still causing super fund trustees headaches, according to a panel of industry stakeholders.

Addressing the inaugural Workplace Super Specialists Australia (WSSA) Conference in Sydney last week, a panel of key industry spokespeople highlighted the continuing problems associated with lawyers getting involved with group insurance disability claims.

“If you Google the words ‘superannuation TPD claim’ the first website you see is a lawyer’s website,” said Alex Hutchison, CEO of Energy Industries Superannuation Scheme, who said his fund had been targeted by law firms who had commenced proceedings before even completing a claim form.

Russell Mason, National Leader of Superannuation Consulting and Advisory Services at Deloitte, said he had observed similar cases.

the first some trustees hear of a claim is a letter from a lawyer threatening to sue

“It’s obscene that the first some trustees hear of a claim is a letter from a lawyer threatening to sue,” Mr Mason said. “The legislation should be changed so that lawyers cannot be engaged until a claim has been lodged with a trustee, they’ve had an opportunity to respond and a Superannuation Claims Tribunal complaint has been made.”

Mr Mason said he believes consumers are naïve when it comes to claiming through their super, and expect the process to be time-consuming and complex.

“I find that the insurers are very sympathetic to members with claims. I think the professionalism displayed by insurers and super funds is quite high and to be commended,” he said.

Principal and Actuary at Aon Hewitt, Andrea McDonnell, was less complimentary of insurer’s claims processes, saying the experience can be “hit and miss”.

“The improvements have been immense over recent years. But it does depend on who is actually dealing with the claims and because of the growth in the number of claims, the industry has been struggling to get in enough experienced staff. I think there’s still room to communicate more with claimants. And advisers definitely have a role to play.”

Ms McDonnell said one way to address the issues insurers and super funds were experiencing with TPD was to introduce an income protection benefit.

TPD benefits are often paid when member is in desperate position

“TPD benefits are often paid when member is in desperate position. They have no salary and need an immediate income. What they really need is some income to help out until they get back to some form of work. Rehab and support also play key role.”

Mr Mason agreed, saying a stronger focus on income protection could lessen lawyers’ involvement, because there is no lump sum payment from which a percentage fee can be taken.

He also believes there should be a time-limit on the lodgement of claims. “How can you assess someone for an event that happened 25 years ago? There are time limitations in other jurisdictions, why not in super and insurance?”