NRMA slapped with industry lawsuit

News

The newly incorporated Australian Automotive Repairers Association has applied for an injunction in the Federal Court to stop NRMA Insurance's Preferred Smash Repairer scheme. At the time of going to press, NRMA Insurance had yet to put in a defence to the Class Action suit although company lawyers had contacted the AARA's legal team.
The AARA has garnered substantial support throughout New South Wales and even further afield ever since Paint & Panel first reported on the issue ('Class Action looms against NRMA, Paint & Panel, January/February 2002). The association has convened several well attended meetings in the past few months and membership is growing exponentially. "We are now a well-funded and well-organised association," said a spokesperson.
It is not only crash repairers that have joined the association and supported it financially, many industry suppliers have also come on board. "Suppliers have been affected by the unfair and discriminatory practices of insurers too and so they feel just as strongly about all this as us," said the spokesperson.
At the heart of the association's actions is a deep-seated conviction that what NRMA Insurance and other insurers are doing to the collision repair industry is unfair and these actions will not only impact heavily on the small business sector but may also compromise vehicle safety.
"We've been asked time and again to compromise the integrity of the vehicle and the quality of the repair. If we refuse, someone else will do it. That is the nature of the present structure set up by these insurance companies," said the AARA spokesperson. The association claims in its lawsuit that NRMA Insurance's Preferred Smash Repairer scheme amounts to unconscionable conduct by the insurer.
Lending legitimacy to the new association is MTA NSW which has pledged its support for the group. Deputy chief executive James McCall called the AARA's injunction against NRMA Insurance "a commendable initiative" and said that the association "should be applauded" for its efforts to make this industry a fair one.
The AARA has hired an extensive legal team to advise it in its actions, which will not necessarily stop at NRMA Insurance; other insurers perceived to be operating unfair systems will also be targeted in the future. The services of a public relations expert have also been retained. "We need to let our colleagues know that if they are feeling hard done by and upset at what the insurers are doing, there is a door open to them. This is the legal way and the proper way to fight these companies. Join us and together we can succeed," said the AARA spokesperson.
In response, NRMA Insurance said it has applied to the court to have the injunction struck out. "We have asked the association for security to cover our costs if the action fails," said IAG corporate affairs manager Wayne Burns. "Repairers are saying they want more dialogue and then they do this. It's not really cricket," he added.
The AARA subsequently issued a statement regarding any security payments: "While we are in a position to cover any application for security for costs that may be sought, we do not consider this an appropriate application by NRMA Insurance and we will be resisting it. Ultimately, it will be a matter for the courts to decide".
A December 15 hearing has now been set for the injunction application. For more information on how you can join the Australian Automotive Repairers Association or donate money to the cause, tel: (02) 9802 9020, fax: (02) 9809 1853 or contact the AARA's industry consultant, Greg Coli, tel: 0418 411 270.