By Rob McKay | July 20, 2010
Unless a wider settlement is offered, the Federal Government’s Home Insulation Program fiasco is heading inexorably to the courts, with transport and logistics companies joining freight forwarders and insulation firms in class actions to recover costs over the cancelled project.
Many firms acting in good faith have been left holding insulation stock that they do not own but are unable to shift, thereby racking up container demurrage and dwell-time charges or having productive space left unusable after importers walked away from their goods.
The moves come despite the announcement in May of an Insulation Industry Assistance Package (IIAP) that allows eligible businesses to seek a once off cash payment of 15 percent of the dollar value of their ceiling insulation stock holding as at April 30 subject to eligibility.
Hunt & Hunt, which has 10 clients, and Swaab Attorneys, representing insulation firms, are amongst law firms leading the charge.
Hunt & Hunt notes that, while the package will assist installers, manufacturers, distributors and importers of insulation products with payments of up to $500,000, recent reports suggest that the financial cap will mean that numerous large scale industries will still be significantly disadvantaged.
“The Federal Government, in limiting the range of industries that can access the IIAP, appears to have failed to recognise the impact that the failure of the Home Insulation Program has had on the ‘legitimate operators’ in the supply chain,” partner Andrew Hudson says.
Affected parties such as customs brokers, forwarders and warehouse owners have been deemed ineligible to apply for the IIAP.
The position of these parties had already been adversely affected by the recent announcement by the Federal Government that it was not going to
resume the HIP in June as it had previously announced.
This further reduced the market value of any insulation they held.