Lawyers charging thousands to make a simple super insurance claim


According to The New Daily lawyers are charging super members thousands to make a simple insurance claim – such as a TPD claim – says CEO of industry’s peak body.

‘Superfluous’ lawyers milking super system

Defenders of the exploited… or Australia’s answer to Saul Goodman? Photo: AAP

One of the superannuation industry’s most senior figures has hit out at the legal profession for slugging super fund members who make successful disability claims through their super funds.

Pauline Vamos, the chief executive of the Association of Superannuation Funds of Australia, believes lawyers haveASFA CEO Pauline Vamos turned to milking fees from the superannuation system in recent years after state governments tightened eligibility rules for workers’ compensation schemes.

Ms Vamos said that ASFA was writing to legal societies across Australia to explain the superannuation industry’s concerns about lawyers targeting the liberal disability definitions of insurance policies offered by super funds.

ASFA CEO Pauline (pictured on the right) Vamos says you don’t need a lawyer to make a disability insurance claim.

Lawyers are taking up to 35 per cent of disability payments made to super fund members,” she told The New Daily.

“Super funds have told me that lawyers are charging $3500 just to fill out a claim form.”

ASFA is the peak body for superannuation providers in Australia and is agitating for law societies to review the practices of their members in relation to insurance claims made through super funds.

Ms Vamos said that historically about 95 per cent of all disability claims were paid out by super funds and that it was hard to see how lawyers were adding value to the claims process.

In letters sent to the Law Society of NSW, Ms Vamos states that fund members “are incurring unnecessary legal costs when making claims, which only reduces their final benefit”.

ASFA’s biggest concern is that lawyers are encouraging clients who are denied claims to issue legal proceedings through the courts, rather than follow their super fund’s internal dispute resolution schemes.

“The feedback we are getting from super funds is that lawyers are superfluous in the claims process,” she said.

“We’ve told the law societies that we’re greatly concerned with the increased involvement of lawyers early on in the claims process.

“We’re also concerned about the failure of lawyers to the tell the truth to clients that most disability claims are paid.”

Ms Vamos said the number of lawyers involved in disability claims had trebled in the last few years, with the recent tightening of workers’ compensation in NSW a major driver of the profession’s interest in insurance policies marketed by super funds.

NSW lawyers defend their new patch

The New Daily sought comment from the CEO of the Law Society of NSW, Michael Tidball.

The society responded through a media spokesman, who defended the state’s lawyers against charges that they were targeting disability insurers.

Lawyers are taking up to 35 per cent of disability payments made to super fund members, according to ASFA.

“Where a (super) member is in need of assistance in making and maintaining their claim it is their legal right to seek legal advice, and if the client instructs, it is their lawyer’s obligation to help enforce their claim,” the spokesman said.

“Lawyers are able to help navigate the complex rules and processes surrounding claims.”

The spokesman suggested there were special circumstances in which it might become necessary for some clients to engage a lawyer.

“In cases of total and permanent disablement, lawyers will often be involved where the member requires urgent treatment, in which case it is entirely appropriate for ‘pressure’ to be applied to obtain a speedy resolution of the claim,” he said.

In response to claims that lawyers were collecting up to 35 per cent of a successful claimant’s payout and charging as much as $3500 for just filling in claim forms, the spokesman said ASFA had not provided more information to support the allegations.

“If there is a circumstance where a legal practitioner has been found guilty of conduct that would give rise to a complaint of unsatisfactory professional conduct, such as overcharging, this should be referred to the Legal Services Commissioner,” the spokesman said.

“We have invited ASFA to provide specific information in relation to such claims, however this has so far not been forthcoming.”

Premiums on the rise

ASFA’s attempt to influence the behaviour of compensation lawyers comes after members of industry funds copped big increases in insurance premiums in the last year.

Two of the country’s biggest funds – Cbus and Australian Super – hiked death and disability premiums by more than 80 per cent in 2014.

Earlier this year two other big funds – MTAA Super and HESTA – announced premium hikes of 110 per cent and 35 per cent respectively.

Superannuation consultants told The New Daily last week that the increased involvement of lawyers in the insurance claims process had been a major driver of recent premium increases.


8 Responses to “Lawyers charging thousands to make a simple super insurance claim”

  1. A couple of years ago I asked my lawyer to apply for Income Protection and Disability. After a number of months in which they had done nothing, I surprisingly received a call from the Super Insurance Fund asking me if I was putting in a claim as they had not received the required paperwork from my lawyer. I cancelled the lawyer and completed both claims myself, both successful with a minimum of fuss. I was very impressed as I expected the run around, but they were fantastic. And I received all of the benefits, none went to a lawyer. I now make sure my family and friends add income protection to the super policy. So, on occasions things do work the way they are supposed to. Thank you AMP and Hestia.

    • I guess the insurance did NOT intentionally replay to your Lawyer instead they contacted you directly so to skip extra expenses.
      Never never ever believe ANYTHING insurance companies say, they are there specifically to tell LIES!
      Read my post above, I applied without Lawyer and had to fight for a year following bullying dirty tactics!

      Xchangingvictim June 1, 2015 at 3:52 pm
  2. If it is not accepted the fees climb from there. Needless to say, I’ve changed solicitors but it hasn’t stopped them sending an invoice and refusing to release my file.

  3. Monaco Lawyers are claiming over $11 000 to file my claim.

  4. Here’s my 2 cents worth. I too had to claim my Super. Necessity, not choice, being on WorkCover but not being compensated. Have a House, Family Children and of coarse, BILL’s!!!
    So I was forced to Claim my Super, I also had Disability insurance. Same scenario. Due to being in Poverty (that’s another word for receiving WorkCover), I had to make claim, seems easy enough.
    Delays, lost paperwork, etc. In the end I payed a Solicitor to handle it. Only a few letters and only a few months and I received my entitlements. Funny how when I personally made claim, it took over a year of stonewalling. Then I saw sense. Just payed the money, advised also it would only be a few letters (in fact, that same as what I already submitted). Got payment, got Taxed and solicitor Charged!!! a few thousand for what would barley be 1 to 2 hours work.
    Seems that when your down, your down. They will kick you or do their best to keep you down. This is our life, our Country, Our Politicians, Our laws. Remember don’t confuse Justice with Law. But then don’t confuse applyed Law with written Law, Constitutional or not.
    Remember what Bob Hawk publicly said. Constitution, Australia hasn’t a Constitution.

  5. The Lawyers have exploited the system because injured people aren’t able to fight the system.
    The super funds’ insurances are managed by the same corporates which have the monopoly on workcover.
    I once applied for the insurance and had to wait nearly a year to have the money, ah people don’t forget that the insurance will deduct 30% in taxes every time they pay you.
    Complaints after complaints, we need this document and that and that, complaints to the super fund tribunal, guess what, they have no power to force the insurance to comply with the resolution = you must pay but we may not force you!
    Once you get the money all together (and paid taxes) then it’s the turn of the ATO demanding taxes because they say that you got a lot of money, it doesn’t matter if the money related to 2-3 years, they only look at what you got in that financial year!
    Pauline Vamos I laugh at you, the Lawyers exploited the system because the system was already exploited, insurance companies can steal money why not the Lawyers?
    Shame on you, I’ve no respect for people like you!

    Xchangingvictim May 28, 2015 at 11:50 pm
read-before-u-commentThis is a statement pointing you to our seriously injured but esteemed and honourable Social Networking Sites Warning and our comment policy. A must read in the context of a very adversarial workcover system! Remember to mention in which state you reside if you seek advice.

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