comcover connect - department of finance · future editions of comcover connect will cover some of...

8
COMCOVER CONNECT 2016 I ISSUE 07 COMCOVER CONNECT W: www.comcover.com.au E: [email protected] T: 1800 651 540 Welcome to the latest edition of Comcover Connect the year in review. What a busy year 2016 has been. Looking back, some of the highlights have included providing specific program and project insurance advice to Fund Members covering the extraordinary breadth of Commonwealth activities—from transporting radioactive material from France to Australia to covering valuable artworks travelling around Australia and overseas. The Guidance to support entities in implementing the Commonwealth Risk Management Policy was released. The guidance includes a range of fact sheets on topics such as maintaining an entity’s risk profile and understanding risk appetite and tolerance. Implementation of Comcover Legal Services Parcelling Arrangements in July now allows Fund Members to access 10 legal service providers for insurance-related litigation and dispute resolution advice. Fund Members can benefit from significant rate discounts and value-added services, such as secondments and training. While continuing to provide the opportunity for Fund Members to access Foundation and Senior Executive Service officer pathways for learning, Comcover has focused on building the next two pathways. The Generalist pathway will be released early in 2017 followed by the Specialist pathway mid-year. One point of contact for Fund Members This year saw Comcover deliver additional resources through the Comcover Launchpad—our Fund Member portal. The Launchpad now has all applications available via a single sign-on, including the Comcover Learning Centre, Comcover Comcover, the Australian Government’s self-managed insurance fund, provides insurance and risk management services to the government sector. Comcover was established in 1998 and is administered by the Department of Finance. The Comcover team Gateway, the Business Intelligence Reporting Tool, and the annual risk management benchmarking survey. Improved access to real-time information and analysis helps Fund Members become more self reliant. Reporting capabilities have developed substantially throughout the year. The Risk Insight Report was launched in 2016, giving Fund Members a more holistic view of their risk profiles. For the first time, Fund Members can access information about claims, insurance and risk management in a single report. Comcover has three program reviews in progress as part of its continual improvement process to ensure services and programs provided to Fund Members remain relevant and useful. The Comcover Risk and Insurance Conference was successful with 165 attendees. It was also an opportunity to recognise winners from this year’s Awards for Excellence in Risk Management which showcase risk management excellence across the Commonwealth. The Department of Agriculture and Water Resources’ win in the risk initiative category is detailed in this edition (see page 5). Future editions of Comcover Connect will cover some of the conference presentations and award winners. This edition highlights a presentation by Catherine Pinfold from Deloitte on risk culture (see page 3) and Peta Stevenson, from King & Wood Mallesons; Nicole Wearne, from Norton Rose Fulbright; and Jodie Potts, from Moray & Agnew Lawyers; answer some common questions about class actions and identify their key messages from the conference discussion (see page 7). We hope you enjoy this edition of Comcover Connect. We are always keen to get feedback. Please email [email protected] to let us know what you find valuable, what topics are important to you, and what you want to read more about. Your feedback is vital to ensure Comcover Connect remains relevant and useful. The Comcover team wishes you and your family and friends a safe and happy festive season.

Upload: ngokhuong

Post on 08-Apr-2018

213 views

Category:

Documents


0 download

TRANSCRIPT

COMCOVER CONNECT

2016 I ISSUE 07

COMCOVER CONNECT

W: www.comcover.com.au E: [email protected] T: 1800 651 540

Welcome to the latest edition of Comcover Connect – the year in review. What a busy year 2016 has been. Looking back, some of the highlights have included providing specific program and project insurance advice to Fund Members covering the extraordinary breadth of Commonwealth activities—from transporting radioactive material from France to Australia to covering valuable artworks travelling around Australia and overseas.The Guidance to support entities in implementing the Commonwealth Risk Management Policy was released. The guidance includes a range of fact sheets on topics such as maintaining an entity’s risk profile and understanding risk appetite and tolerance.Implementation of Comcover Legal Services Parcelling Arrangements in July now allows Fund Members to access 10 legal service providers for insurance-related litigation and dispute resolution advice. Fund Members can benefit from significant rate discounts and value-added services, such as secondments and training. While continuing to provide the opportunity for Fund Members to access Foundation and Senior Executive Service officer pathways for learning, Comcover has focused on building the next two pathways. The Generalist pathway will be released early in 2017 followed by the Specialist pathway mid-year. One point of contact for Fund Members This year saw Comcover deliver additional resources through the Comcover Launchpad—our Fund Member portal. The Launchpad now has all applications available via a single sign-on, including the Comcover Learning Centre, Comcover

Comcover, the Australian Government’s self-managed insurance fund, provides insurance and risk management services to the government sector. Comcover was established in 1998 and is administered by the Department of Finance.

The Comcover teamGateway, the Business Intelligence Reporting Tool, and the annual risk management benchmarking survey. Improved access to real-time information and analysis helps Fund Members become more self reliant.Reporting capabilities have developed substantially throughout the year. The Risk Insight Report was launched in 2016, giving Fund Members a more holistic view of their risk profiles. For the first time, Fund Members can access information about claims, insurance and risk management in a single report.Comcover has three program reviews in progress as part of its continual improvement process to ensure services and programs provided to Fund Members remain relevant and useful. The Comcover Risk and Insurance Conference was successful with 165 attendees. It was also an opportunity to recognise winners from this year’s Awards for Excellence in Risk Management which showcase risk management excellence across the Commonwealth. The Department of Agriculture and Water Resources’ win in the risk initiative category is detailed in this edition (see page 5). Future editions of Comcover Connect will cover some of the conference presentations and award winners.This edition highlights a presentation by Catherine Pinfold from Deloitte on risk culture (see page 3) and Peta Stevenson, from King & Wood Mallesons; Nicole Wearne, from Norton Rose Fulbright; and Jodie Potts, from Moray & Agnew Lawyers; answer some common questions about class actions and identify their key messages from the conference discussion (see page 7).We hope you enjoy this edition of Comcover Connect. We are always keen to get feedback. Please email [email protected] to let us know what you find valuable, what topics are important to you, and what you want to read more about. Your feedback is vital to ensure Comcover Connect remains relevant and useful. The Comcover team wishes you and your family and friends a safe and happy festive season.

2 | COMCOVER CONNECT

The 2016 Comcover Insurance and Risk Conference and Awards for Excellence in Risk Management.

2016 COMCOVER AWARDS FOR EXCELLENCE IN RISK MANAGEMENTENTERPRISE WIDE CATEGORYHighly commended Department of Agriculture and Water ResourcesRISK INITIATIVE CATEGORYWinner Department of Agriculture and Water ResourcesHonourable mention Australian Tax Office

Innovative processesfoster quality services,value for money

Government entities that manage foreseeable risks through innovative processes and policies will be in the best position to give taxpayers high quality services and value for money, former Department of Finance Secretary Jane Halton says.It was important for public service entities and officials to remember decisions they took every day impacted on Australian industry and communities and to plan accordingly. A poorly managed policy or program had potential to adversely impact on how people did business and lived their lives. Ms Halton was speaking at the presentation of the 2016 Comcover Awards for Excellence in Risk Management during the Department of Finance’s 22 September Insurance and Risk Management Conference.Awards were presented to Comcover Fund Members that had demonstrated best practice risk management processes that benefited their own programs and could be shared with other government entities. The Department of Agriculture and Water Resources took top honours in the risk initiative category for its export certification reform program, and was highly commended in the enterprise-wide category for its overall commitment to risk management policies and frameworks.The awards recognised that the department was at the forefront of government efforts to systematically embed risk management into business processes and service delivery. The Australian Tax Office received an honourable mention in the risk initiative category for its whole-of-government business continuity project and its commitment to improving other entities’ risk capability structures by sharing knowledge and frameworks.

Ms Halton said the awards not only recognised the work of individual Fund Members, but showed good risk management was now part of the Australian public service’s DNA.‘Risk management is not easy. It takes time, tenacity, asking difficult questions, engaging with uncertainty, and steering a course through often uncharted waters,’ she said. ‘But we ignore good risk management practices at our peril, which is why we need policies, processes and controls in place to identify and manage as many risks or challenges as we can.’She said there were no short cuts to risk culture excellence, particularly in the public sector where there was a strong focus on governance, performance and accountability. It required robust but flexible risk management practices.‘Good risk management and a strong risk culture should mean we, as policy practitioners, program implementers and service delivery agents, deliver the outcomes that are intended and, in doing so, identify where the risks lie and develop strategies to engage with and manage them.’Ms Halton said the quality of this year’s entrants showed the Australian public service had a strong commitment to quality risk management frameworks.‘Twenty years ago, Australian governments at all levels and in all jurisdictions did not actively practice risk management, if they even knew what it was in those days.‘And just a decade ago, while risk management was slowly becoming a common term in the public and private sector vernacular, processes were often ad hoc and included in a project or policy as an afterthought,’ Ms Halton said.‘That is changing rapidly, and the work of government entities clearly demonstrates how far we have come in a relatively short time.’The judges’ decision to withhold an enterprise-wide winner demonstrated the challenges entities faced in developing and implementing best risk management practices.‘But [despite there being no winning entrant] the recipients are great examples of strong risk cultures that demonstrate innovative approaches to implementing policy, programs and projects for the benefit of all Australians,’ Ms Halton said.She said entrants had demonstrated that good risk management was an integral part of program planning and processes, particularly through leadership, cooperation and shared best practice. Entities’ strong approach to risk management had led to the successful delivery of key government programs and services across the country. Ms Halton said the awards were important because they gave entities opportunities to learn from their peers and include winning processes into their own frameworks.‘Sharing what we do well is critical, and is consistent with the transformation journey currently being undertaken across the Australian public service, in that we need to share more of what we do without constraining our ability to innovate,’ she said.

COMCOVER CONNECT | 3

Embedding effectiverisk managementbrings risk culture focus

By Catherine Pinfold, Manager, Risk Advisory, Deloitte

Since the global financial crisis, financial institutions have had a continued focus on risk culture. Now other sectors are being put under the spotlight, including government. All are increasingly facing regulatory pressure and media exposure over poor decision making, unconscious risk-taking and reputation-damaging incidents—these events are often attributable to a poor risk culture.The independent report into the failure of the government-run Home Insulation Program, which led to four deaths and hundreds of house fires, highlighted several key issues:• Deficient risk management • Ineffective communications • Ambiguity of risk appetite • Responsibility and accountability found lacking.The Commonwealth’s Risk Management Policy takes a principle-based approach to improving the way government entities engage with and manage risk. The overarching goal of the nine policy elements is to embed effective risk management as part of entities’ culture. Three elements in particular are important when considering organisational culture:Element 4: embed systematic risk management into business processesThe best policies and processes are only as good as the extent to which people understand and readily follow them. A focus on risk culture helps to understand what may prevent risk management requirements being followed.Element 5: develop a positive risk culture A focus on risk culture should give insights on culture-related vulnerabilities (the one per cent or exceptions to organisational ‘norms’ of behaviour) that may result in unconscious risk taking, detrimental outcomes or an undesirable level of risk exposure. Those vulnerabilities may undermine the effectiveness of the risk management approach. Focusing on the drivers of identified vulnerabilities drives a more positive risk culture.Element 9: review and continuously improve the management of riskActing on insights from the benchmarking survey reinforces a continuous improvement focus for how entities identify and effectively manage the risks to which they are exposed.

‘The [Australian Public Service] still places the weight of program and risk management on templates, tools and processes, rather than instilling a culture of judgement, initiative and capability.’—Professor Peter Shergold AC in Learning from Failure: Why large government policy initiatives have gone so badly wrong in the past and how the chances of success in the future can be improved. 2015

What is culture?There are many definitions of culture. The most common is a

catch-all term focusing on behaviour, ‘the way we do things around here, even when no one is looking’. However culture is more than that. Organisational psychologist Edgar Schein describes culture in a more nuanced, layered way. His view of organisational culture identifies three distinct layers.1. Artefacts: ‘what you can see, hear and feel’• Behaviours: Day-to-day actions• Systems: Tangible frameworks, systems, polices and

approaches• Symbols: Interpretation of systems or observed behaviours.2. Espoused values: ‘what people say they support’• Purpose: ‘Reason for being’ that guides decision-making• Values: The organisational ‘personality’ that guides

behaviours.

‘Culture is like DNA. It shapes judgement, ethics and behaviours displayed at key moments, big or small, that matter to the performance and reputation of firms and the service [they] provide to customers and clients.’—Clive Adamson, former UK Financial Conduct Authority, Director of Supervision, April 2013

3. Core beliefs: ‘unconscious beliefs, thoughts and feelings’

• How individuals see themselves, their environment and their purpose

• They can be activated in different situations (for example, moments of stress).

Managing risk well relies on more than slavish adherence to a prescriptive risk framework; no risk framework can prescribe how to deal with every risk. At times decisions need to be made, and risks managed, in circumstances of incomplete information, inadequate resources and competing priorities. It is often an entity’s strength of risk culture that determines the extent to which risk is appropriately identified, assessed, communicated and managed in those circumstances.Continued on page 4

Catherine Pinfold speaks at the Comcover Conference.

4 | COMCOVER CONNECT

From page 3Risk culture is a subset of organisational culture and subject to the same levers, but it cannot be measured the same way. Traditional culture or engagement surveys measure the 99 per cent—or the ‘averaged norms’ of behaviour. While that is important, that focus will often miss specific situations where decisions or actions manifest but are ‘averaged out’ with traditional culture measurement approaches.Risk culture focuses on the one per cent, the specific situations where staff deviate from what’s expected. The one per cent of situations are those that can get you on a newspaper front page.

‘While organsational structure can be a powerful preventitive control... assessing culture through the lenses of risk, conduct and compliance is an effective detective control that surfaces organisational vunerabilities and design flaws that result in detrimental outcomes.’

Grant Mackinnon, PrincipalRisk Culture Specialist, Deloitte

99%

1%Common causes of weaknessTrying to change culture by focusing on behaviour is like trying to change the weather by focusing on the thermometer. You first need to understand the underlying drivers of behaviour—the mindset and unique moments of organisational or personal stress.In many organisations the efficacy of understanding the risk culture is undermined by the organisation’s culture itself. Across all industries there are some common causes that can be attributed to several functions.

Risk Human resources

Middle management

Cumbersome and bureaucraticProcesses, systems and tools are not fit for purpose and complex

Blinkered responsibility

Conflicted interest

Unconsciously incompetent

Tradeable objectivesOften policies compete with one another so risk decisions are ‘or’ instead of ‘and’

HamstrungNo real authority to make decisions so actions get ‘stuck’ with them

Tick and flickCompliance is seen as a ‘necessary evil’ to get off your plate early, rather than understand why you are doing it

Misaligned rewardsIncentives often drive the wrong behaviour, for example sales targets and bonus structures

Delivered risk

Strengthening risk cultureOversight The Minister/Secretary set and reinforce the tone Sponsorship and role modelling of strong

risk behaviour starts at the top and must be continually reinforced through organisational mechanisms, for example, performance reviews, promotions, recognition and rewards.

Define Purpose + values = aspiration Code of conduct = minimum standards +

aspiration Minimum standards of behaviour must exist

and apply to all employees. Behaviour must be reinforced by managers and leaders through reward or consequence mechanisms.

Implement Risk, HR and audit play key yet distinct roles. All three functions need to work together to

ensure appropriate levers and assurances exist to drive a strong risk culture.

Understand Multiple techniques/sources (validated externally) Several techniques are needed to assess an

entity’s risk culture, including data analysis and risk culture surveys, complemented by face-to-face discussions to gather specific examples of misalignment.

Influence Intervention-specificity drives impactful correction Clear specific actions focused on the root causes

of a weakened risk culture will have a greater impact than just training and communications. While those things are important, it is vital to understand what is driving behaviour and actively work to remedy it.

Strengthening and changing culture can feel daunting and somewhat intangible. Developing an effective risk culture starts with an entity’s most senior leaders, including self-awareness of their effectiveness and the extent to which they currently influence culture. Robust frameworks appropriate to business complexity need to be established that engage the entire organisation and there is an array of techniques entities can use to conduct ongoing and reliable assessments of culture.

COMCOVER CONNECT | 5

Sharing risk, reducing redtape, achieving financialsavings win award

Reducing red tape and simultaneously saving money are just two of the key benefits from the Department of Agriculture and Water Resources’ export certification reform program.The design and implementation of the authorised officer (AO) model as part of the certification reform program won Agriculture the risk initiative category in the 2016 Comcover Awards for Excellence in Risk Management. The program required close consultation with industry and Australia’s trading partners; a new authorised officer model; and new certification procedures. The judges said the benefits to Australia, exporters and trading partners included:• Increased inspection timing flexibility • Improved resource allocation and more appropriate

regulatory intervention to improve performance and compliance

• Reduced departmental costs from $30 million to $21 million through transitioning staff to external AO roles

• Reduced government intervention, reduced export

processing costs, and increased business operational flexibility in plant and product export industries.

Dr Chris Parker, Assistant Secretary, Plant Export Operations, told Comcover Connect the trigger for the export certification reform program was an independent review of quarantine and biosecurity arrangements, One biosecurity: a working partnership. It recommended full cost recovery of export certification functions. Agriculture consulted each plant and plant-based product commodity sector and industry and government worked together to implement the new model.Dr Parker said the AO model enabled ‘appropriate regulatory intervention’ and balanced risk and return. It had ‘hit the sweet spot’ in achieving benefits for industry and the Australian Government.A ‘big step’ was identifying that inspections could be conducted by industry. The shared risk approach met a range of views, from industry participants who thought the government should retain full control to ‘others who wanted government right out’.‘We needed a level of assurance for ourselves and our trading partners that product being exported was high quality and met importing country requirements,’ Dr Parker said.The AO model was rolled out over four years, starting with countries known as ‘non-protocol’, meaning the levels of certification they required were less onerous than ‘protocol’ countries.Continued on page 6

From left to right: Rosanna Carr; Chris Parker; Marion Healy; Daryl Quinlivan, Secretary, Department of Agriculture and Water Resources; Karina Keast; Jenny Dunn; and Jane Halton AO PSM, Secretary, Department of Finance; accept the award on behalf of the Department of Agriculture and Water Resources.

6 | COMCOVER CONNECT

Managing shared risk—industry and government working together to: • maintain enhanced market access• improve supply chain efficiency and flexibility• provide better alignment of regulatory resources• share responsibility.Benefits to industry:• increased flexibility• reduced costs• greater returns• greater autonomy over products.Benefits to government:• development of national training, assessment and

inspection standards to improve consistency• more appropriate regulatory intervention• greater alignment of resources.

From page 5Dr Parker said the AO model was now a ‘fully mature program’ with 1,024 external AOs conducting inspections across all markets. Having external AOs meant greater flexibility in the supply chain so exporters’ costs have reduced. In the past, exporters had to book a government inspector, wait until one was free to come onsite and conduct the inspection, then await export approval.One challenge in operationalising the model was ensuring AO candidates were ‘appropriate’, that their roles and duties were very clear, and that the comprehensive audit process ensured inspections were always conducted properly.When conducting export inspection work, external AOs are regarded as Australian Government officials, so they must sign deeds of obligation, which outline the export service standards required of AOs and the services they can perform and provide them with protection from liability.‘Department officials no longer see every product leaving Australia, so instead of having an inspection-based workforce, we now have an audit and verification process,’ Dr Parker said. ‘We reduced the number of departmental inspectors, and have focused on building our audit workforce. The point of control is now audit and verification and correct selection of AO candidates.’AOs need to be ‘fit and proper’ people to do the job. Several mechanisms are in place to manage AOs’ performance. AO candidates are subject to training and competency assessments.Online training must be completed and the pass mark is 100 per cent. Trainers also conduct commodity-specific training. AO appointments are reviewed every two years and subject to AOs being audited against specific performance standards set by the department. AOs are audited every 12 months. For example, for citrus there is basic inspection training for protocol and non-protocol countries, then specific training for cold treatment to mitigate fruit flies and metal bromide fumigation, which some importing countries require.Since the AO model’s roll out, there had been no ‘market issues’ with any product, which Dr Parker said was ‘a sign the model operates as it should’.Since the model’s introduction, the number of AOs has reduced, but many remaining AOs have multiple job functions, for example, being qualified to conduct inspections across commodities available in different seasons. Dr Parker said AO

competencies were ‘not inconsistent across job functions’.Job functions include export inspections for empty containers; woodchips; logs; processed forest products; hay and straw; grain and plant products; raw baled cotton; fruit and vegetables; cut flowers and foliage; tissue cultures and cuttings; and plants and nursery stock.The model has created a niche small business career for AOs. ‘There is risk mitigation in having full-time AOs. The riskiest AOs are those who just do inspections every now and then,’ Dr Parker said.Most AOs were employed by exporters and some large packhouses had as many as 10.

Department of Agriculture and Water Resources Winner – Risk initiative category, Comcover Awards for Excellence in Risk Management

Dr Parker said trading partners took comfort from the fact the phytosanitary certificates required for all exports were still signed by the Australian Government because Australia was ‘a trusted country with a highly developed biosecurity system’.Certification meant the Australian Government was acknowledging the product met the importing countries’ requirements. Importing countries also conduct their own audits of Australia’s biosecurity systems.Dr Parker said lessons learnt from implementing the export certification reform program included engaging with industry early in developing the model.‘You also need to be very clear about what your real risk is. Ours is simple—product not meeting an importing country’s requirements.‘We conducted a lot of early work on quantifying the risk and how to mitigate it.’AOs’ potential conflicts of interest were identified as a possible risk, but Dr Parker said that was resolved via the deeds of obligation, which was an agreement between the government and individual AOs, not between AOs and exporters.‘That’s also why we have a very robust audit system and AOs can be subjected to penalties, not just revocation of their AO authorisation,’ he said.Agriculture has revoked appointments or required AOs to conduct additional training. The penalty depended on ‘the severity of the activity, if it’s deliberate circumvention of the process, rather than ignorance or a lack of understanding’.Dr Parker said Agriculture would continue to improve the audit and verification process, which underpinned the entire model. ‘Even though it’s very sound, it can never be robust enough.’ The program was not a ‘set and forget’, which he said would be a recipe for disaster.Performance monitoring tools were key to operationalising the model at a very high standard. Dr Parker said growers had indicated increased exports and significant cost reductions. For example, one cherry grower had exported two-and-a-half times more cherries in 2015-16 than the prior fiscal year and had saved about 75 per cent in costs associated with inspections.Dr Parker said growers appreciated having greater autonomy over their products; increased flexibility with inspections; and reduced red tape.Agriculture achieved greater consistency nationwide in training and inspections; and a better alignment of resources, enabling it to focus on audit and verification.

COMCOVER CONNECT | 7

Class actions trend upwardsAt the Comcover Risk and Insurance Conference, three of Comcover’s legal providers participated in a panel discussion on class actions. There has a been an upward trend in class actions against the Commonwealth in recent years and Comcover Connect asked Peta Stevenson, from King & Wood Mallesons; Nicole Wearne, from Norton Rose Fulbright; and Jodie Potts from Moray & Agnew Lawyers to answer some common questions about class actions and identify a key message to highlight from the conference discussion. Peta Stevenson, Partner, King & Wood MallesonsWhat does it take to establish a class action?A class action is a court proceeding taken on behalf of a class or group of people. It is representative in nature and the class or group of non-parties represented by a named plaintiff will be bound by the outcome of the proceeding whether by settlement or court judgement.It is relatively easy to establish a class action in Australia. It just requires seven or more people who each have a claim against the same person or persons; whose individual claims involve similar or related facts and circumstances; and which involve a substantial (non-trivial) common issue of law or fact. Are some claims more suited to class actions than others?Claims will be more suited to resolution by a class action rather than individual proceedings if: • there is a single act, omission or contravention that causes

loss to multiple parties on a mass scale• causation (proof the act, omission or contravention caused

the loss suffered) can be established without needing individual or uncertain evidence

• the loss is readily quantifiable and can be established without the need to determine individual issues.

Key messageEngage all stakeholders early. Consider (a) which government entities are or may become defendants and how to manage their different interests; (b) whether other entities may have a broader interest in the proceeding; and (c) who needs to be briefed on developments in the case.Agreeing early on a strategy and the mechanisms for decision making on a class action can reduce the management time required, save costs and optimise the outcome for the government. Nicole Wearne, Partner, Norton Rose FulbrightWhat factors should be considered in developing a litigation strategy when defending a class action?Being a defendant to any proceeding requires an understanding of court process and the facts and legal principles central to the claim. As a class action defendant, the same issues arise but the resources required to manage the scale of the litigation are often not anticipated. Early consideration of the defence strategy to be adopted will enable better planning and management of the demands of large-scale litigation. The litigation strategy should consider:• Single or multiple defendants—Representation of multiple

defendants involved in one legal dispute is often best

From left, Peta Stevenson, Jodie Potts and Nicole Wearne at the Comcover Conference.

managed through one legal team. That reduces costs and assists in ensuring, where appropriate, a whole-of-government approach to the litigation.

• Class size—The number of potential class action members will impact on the resourcing required and the need to identify and collect key documents. A larger membership is likely to involve significant levels of documentation, particularly in seeking to understand the quantum of the loss alleged.

• Litigation funder—A litigation funder’s involvement influences many factors, including whether courts give security for costs and whether a common fund is established. It also influences settlement negotiations as the funder has usually negotiated a commission to be deducted from any agreed settlement.

• Legal provider relationship—Developing a good working relationship with the plaintiff’s lawyers assists with working through protocols around disclosure and quantum analysis.

• Whole-of-government context—Lawyers and departmental staff must work closely to ensure broader policy and reputational implications of a potential settlement or judgement are understood. That aspect is critical to determining the course the litigation will take.

• Determine the lines and methods of communication—Class action litigation is fast moving and high profile. Ensure protocols are in place to escalate sensitive issues arising from class action litigation with other stakeholders to enable all involved in managing the litigation to be informed and prepared.

• Early evidence gathering—Early identification of key witnesses and relevant documents is critical to developing the litigation strategy and allocating resources.

Key messageClass actions require detailed planning and management to obtain the best outcome for all parties. Appointing lawyers with strong class action experience and a good understanding of government operations will produce the best results. Collaboration is critical.Fund Members working together as a team with Comcover and the lawyers will ensure all stakeholders are focused on the litigation strategy. The litigation strategy should be regularly reviewed to ensure new information is considered, and any changes accommodated, with stakeholder agreement. Continued on page 8

8 | COMCOVER CONNECT

Disclaimer: Comcover Connect provides general information for the benefit of Fund Members. Comcover does not guarantee, nor accept legal liability arising from or connected to, the accuracy, reliability, currency or completeness of any material contained in Comcover Connect. Fund Members are asked to evaluate the accuracy, currency, completeness and relevance of the material this newsletter contains for their purposes. Comcover Connect is not a substitute for independent professional advice and Fund Members should obtain appropriate professional advice relevant to their particular circumstances.

To learn more about how to access Comcover’s services, email [email protected] or call 1800 651 540.

January to March 2017

Comcover 2017 Risk Management Benchmarking Survey opens – 6 February

Class Actions Forum – March

Forums

Several Commonwealth Government forums are available to Comcover Fund Members that promote best practice risk management. The four forums below provide the opportunity for Fund Members to extend their insurance and risk management expertise and capability.

Corporate Governance Forum Contact: Rachael Hilton Australian Taxation Office E: [email protected] T: 02 6216 2166

Commonwealth Risk Management Forum Contact: Frank O’Donoghue Department of Agriculture and Water Resources E: Frank.O’[email protected] T: 02 6272 4894

Cultural Institutions Insurance and Risk Management Working Group (Cultural Institutions Forum) Contact: Mark Staughair National Library of Australia E: [email protected] T: 02 6262 1663

APS Business Continuity Community of Practice Contact: Brendan Jones Australian Taxation Office E: [email protected] T: 02 4724 0565

From page 7Jodie Potts, Partner, Moray & Agnew LawyersHow are most class actions resolved?Once procedural formalities (for example, proper definition of the class and advertising opt-out notices) are finalised, the court will actively manage the litigation and usually require (by order or agreement) the parties to attend mediation. Most class actions are resolved at mediation or some other form of alternative dispute resolution. Class actions rarely proceed to a judgement.What is required to dispose of proceedings?A representative proceeding cannot be settled or discontinued without court approval. When applying for approval, the parties need to persuade the court the proposed settlement:• is fair and reasonable in regard to the claims made on behalf of group

members who will be bound by the settlement• is in the interests of the group members.Once a settlement has been approved, the court oversees distribution of the settlement funds. The process may be lengthy with numerous court applications and potentially a managed compensation scheme.Key messageGiven a settlement binds group members who are not parties to the proceedings, courts will not simply rubber stamp settlements reached by the parties. Group members may object to a proposed settlement so their concerns are considered by the court. Courts will not approve a settlement if it is considered it will not operate fairly and reasonably.

Key concepts explainedThe Guide to Implementing the Commonwealth Risk Management Policy is now available as an eBook.The Guide provides a broad explanation of key risk management concepts and includes practical tips to assist Fund Members to improve their risk management programs.It provides additional explanations and context to each of the nine elements in the Commonwealth Risk Management Policy and includes practical tips on how entities can implement each element. The eBook has additional interactive functionality, including links to other Comcover programs. The eBook will be updated as Comcover releases further content and program information.Comcover has also released eight risk management information sheets to support the Guide. The sheets provide additional detail on specific risk management concepts related to each element of the Policy. Topics include:• Maintaining an entity’s risk profile• Developing a positive risk culture• Communicating risk. Comcover will continue to develop and release a range of learning resources to illustrate and promote good risk management in the public sector. The Guide and the information sheets are available from Comcover’s learning centre on the Comcover Launchpad (www.comcoverlaunchpad.com.au): http://learningcentre.comcover.gov.au.

Events calendar 2017