Making an insurance claim – Should you use a lawyer?

While there is no need to use a lawyer to make an insurance claim through your super fund, some people decide to do so. That means it’s important to know when to involve a lawyer and what to watch out for when hiring a lawyer.

There is no need to use a lawyer to lodge an insurance claim, in fact, lawyers are very unlikely to add anything to the lodgment process except cost.

Your super fund can answer your questions and help you complete the forms. After that, the insurer has to make its assessment and eventually make a decision.

If your claim is approved, you will receive your payment without having to pay lawyers’ fees for filling in forms you could have filled in yourself. If your claim is declined, you should read the reasons for the rejection and decide what to do next. Generally there will be three options:

1) Accept the insurance decision if it makes sense to you.

2) If the insurance decision doesn’t make sense to you, and if you can’t get answers that resolve your concerns, consider taking your case to the Superannuation Complaints Tribunal (SCT). The SCT is an independent body set up to hear complaints about superannuation. The SCT is free to you and is staffed by experts, which means you don’t need a lawyer. The SCT will investigate your claim and make a decision. If the SCT decides in your favor you should receive your payment without paying any lawyers fees.

3) If the insurance decision doesn’t make sense to you, or if the SCT rejects your claim, you might want to consider hiring a lawyer. An advantage in waiting to hire a lawyer is that you will have the insurance decision and all the other information a lawyer needs to advise you on your claim.

WHAT TO WATCH OUT FOR

There are two golden rules to follow when hiring a lawyer for your superannuation matter:

1. Make sure the lawyer understands superannuation

Superannuation claims are different to other insurance claims because superannuation is subject to different rules. Sometimes a lawyer who is experienced in (say) personal injury or workers compensation claims can make a superannuation claim more difficult because they lack detailed knowledge of the specific rules that apply to superannuation. An experienced superannuation lawyer can save you time and money.

2. Know what and how the lawyer will charge

Most superannuation insurance claims that are successfully challenged are settled at mediation by a compromise payment. This occurs because these claims are unclear for one reason of another, and the parties agree on a compromise payment that reflects the degree of uncertainty. Knowing that, you should:

A) Ask potential lawyers how much you will have to pay to “file a statement of claim and attend mediation”. Most disputed claims settle at this point, and asking the question will help you identify any lawyers who charge higher fees earlier in the litigation process.

B) Ask potential lawyers whether they charge an “up lift fee” or an additional fee for “care and diligence”. These additional fees can be expensive and are often not always clear to consumers. Ask whether the fee quoted to “file a statement of claim and attend mediation” includes any “up lift” or “care and diligence” fees.

C) Do at least two quick internet searches for “specialist superannuation lawyers” and “(name of law firm) financial difficulties”. If a lawyer doesn’t show up as a specialist superannuation lawyer they might not be a wise choice. If a lawyer is widely known to have financial problems there may be a temptation to increase the fees they charge.

WHAT IF I WANT TO USE A LAWYER AT THE START?

If you want to hire a lawyer at the start of your claim you are free to do that. But before you do consider following steps (A), (B) and (C) above, they could save you a good deal of time and money.

 

This article was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as Trustee of the First Super superannuation fund (ABN 56 286 625 181). It does not consider your personal circumstances and may not be relied on as financial advice. Content was accurate at the date of issue, but may subsequently change.