Landmark third party win

Solicitors Quinn & Quinn, representing five not-at-fault third party claimants has won an important case against NRMA in the Local Court of NSW.
The claimants sued NRMA for refusing to pay their repair costs on NRMA's grounds that they were not fair and reasonable. Legal counsel for both sides appeared before Magistrate Lilian Horler over several months in 2003 and 2004 to argue what turned out to be a complicated and ultimately disquieting case.
The concurrent hearings were agreed upon as a basis to settle some 600 to 800 others which had backed up in the Local Court of NSW where small claims matters are heard. These cases were mostly against NRMA and AAMI which, in NSW anyway, have made a habit of refusing to pay third party claims which they consider too high in price. While the Local Court decision may become a reference point fur future cases, it does not provide a precedent. For that to take place, the matter would have to be heard in a higher court. Future similar cases which are heard in the Local Court will have to start from square one again - probably with another backlog of cases waiting to be heard.
The fact that NRMA lost,(its solicitors have notified the plaintiff's solicitors that there will be no appeal against the decision) and must pay what Magistrate Horler determined as fair and reasonable costs of the repairs, is not nearly as significant as the evidence and conclusions contained in the judgement. No doubt the Productivity Commission current hearing into the relationship between insurers and repairers will take this case into account before its final report.
In making her decision, Magistrate Horler had to consider the cost of repairs in terms of time and money. On one hand was the NRMA hourly rate for R & R of $30.90 an hour, with hours calculated from its own 'less generous' manual, while on the other was a group of the five plaintiffs' shops R & R rates between $50 and $80 an hour with hours calculated according to the Motor Traders Association manual, which is generally regarded as erring on the side of 'funny' times.
Magistrate Horler was faced with a case like the three bears' beds. NRMA's was too hard, and the plaintiff's was too soft. In arriving at baby bear's 'just right' bed she accepted the plaintiff's times (MTA manual)and split the difference between NRMA's allowed shop rate and the various plaintiffs' shop rates down the middle. This gave the result of NRMA having to pay the MTA funny times multiplied by and hourly R & R rate of between $40.45 and $55.55, with correspondingly higher rates for paint times. Repair times quoted by CME's assessors were accepted by the court as reasonable.
No doubt, if this court finding became the new standard for the entire industry, it would be the insurers crying foul instead of the repairers. If you keep funny time and multiply it by a considerably higher hourly rate, the smash repair industry would suddenly be the place to get-rich-quick.
However, there are several factors surrounding the case that water down this possibility. First, only about a third of all accidents produce a clear not-at-fault driver ? and therefore the opportunity to seek higher repair prices at law. Of that 30 per cent, some will let their insurer handle the whole process as long as they don't lose their no claims bonus, which means the repairs will be done at established insurance company prices. Some owners will send their cars to shops already doing nice business with the very insurer they are being asked to bite for a higher rate because it's third party. Those shops will also work at the usual insurance rate.
A certain number of drivers and repairers will be attracted to offers like CME's to pursue not only a choice of repairer at no cost to the car owner, but demurrage and other claims as well.

PLACE COTTONARO'S
Third party claims consultant, Frank Cottonaro, has a strong view on the MTA times manual. He says that the times quoted in it are closer to real than funny because of the additional, and unallowed-for time it takes to remove damaged parts and test fit repaired or new parts several times before final fixing. That is a view backed up by Gerry Raleigh from Kerry Panels in Melbourne. The MTA, however, says its times are inflated to compensate for the low funny money offered by insurers. It intends to publish a new real time manual, probably based on Thatcham times, to mesh with its 'formula for change' campaign which seeks to covert the whole industry to real times and real money.
During the course of the court hearing, Mr Miller, one of the assessors, maintained that there was no such thing as a reasonable rate across the industry. He said that 99 per cent of the repair work done in the 70 per cent regular insurance sector would be done at R&R rates of less than $32 an hour ? which might explain why some 1500 repairers in NSW had closed down in the last 12 months.
Although Miller's figures were not substantiated, Cottonaro says that there are a great number of shops limping along on a combination of loss making insurance work and profit making third party ? and they the keep their third party work quiet.
Those professionally assisting not-at-fault drivers to make claims against at fault drivers will be satisfied with the court's findings because it will assist them in marketing their services to panel shops and the general public.