In early 2022, parts of South-East Queensland and coastal New South Wales were rocked by major storms and flooding.
This devastating event impacted numerous households, communities, businesses, and local governments. The Insurance Council of Australia (ICA) released updated data on May 31st, estimating that this weather event was the fourth costliest disaster in Australia’s history. As a result, over 216,465 claims across both states have so far been lodged with an estimated cost of $4.3 billion in insured losses.
Whilst these figures may seem shocking, they are hardly surprising to many Australian residents and businesses. The Geneva Association’s Australian Flood Risk Management Report clearly states that flooding is the costliest natural hazard-related cause of disaster within Australia. The rising expenses associated with floods are due to the combination of increasing concentrations of people and assets in high flood risk areas, growing land use, urbanisation, and development practices, as well as increasing frequency and severity of weather-related events. Changing storm and precipitation patterns and rising sea levels are expected to cause higher storm surges, making flooding more frequent in coming years.
In a recently released report titled “Building a More Resilient Australia”, the Insurance Council of Australia (ICA) called upon the Federal government to implement a range of measures to better protect households and communities from the impacts of extreme weather. These included doubling Federal funding to $200 million a year, matched by the states and territories. This ‘call to arms’ has been echoed to governments across all levels, but the message is becoming more urgent with the increasing frequency of extreme weather events as time passes.
Queensland is one state that understands the requirement of government financial support and the legalities around re-building after an event. From being battered by seasonal tropical cyclones in the north to devastating floods in the south, and most recently earthquakes in the south-east, the Sunshine State seems to be one of the most natural disaster-prone locations. In 2014 the Queensland Reconstruction Authority released the original version of its Strategy for Disaster Resilience, responding to the devastating floods of 2011. Whilst the content is different to what is included in both the Geneva Association’s and ICA’s reports, the messaging is consistent – the key terminology is all about resilience.
The use of the word resilience infers a level of acceptance, that these devastating events will continue to happen with greater frequency. It is no longer about ‘if’ a natural disaster will occur, it’s about ‘when’. For those operating within the legal industry, these extreme weather events need to be at the forefront of practitioners’ minds, as it is becoming apparent that the onus no longer sits with insurance alone to deal with the repercussions and future planning for events.
The most recent floods brought this issue into the spotlight for many practitioners. The growing concern around the issue and the legal considerations that accompany it, hit home for John Ahern, InfoTrack’s Global Head of Property. After recently visiting several clients based in northern New South Wales, John anticipated the devastation he saw in the region, but what he was confronted with was much more distressing. “I had expected to see significant damage in the wake of the floods but driving through the impacted areas and seeing the scale of the destruction firsthand was overwhelming,” states John. “Despite being months on from when the flooding first occurred, builders are only just starting to clean up the main street and reconstruct some of the towns. Lismore especially was much worse than anticipated, with water levels being well above the height that the 2017 floods reached. We went to talk to clients to see how we could offer assistance, but it’s hard for people to think about anything other than taking one step at a time. Many firms are displaced from their offices, running with limited resources and space, and some are still living without their homes. It’s a very long road ahead for the community.”
In the wake of these devastating events, one current activity that Councils in NSW are undertaking is the reclassification of properties as flood-prone land, raising questions about property values and mortgage risk over time. With this in mind, clients will be looking to their legal representatives more than ever before to provide accurate information about a property’s future exposure to climate related hazards.
On a global scale, the legal ramifications of climate-related disasters are a keen focus. The International Bar Association (IBA), the world’s leading organisation of international legal practitioners, bar associations, law firms and law societies, has addresses this in their recent report Legal Aspects of Climate Change Adaptation. In the report, the IBA outlines the critical legal aspects of climate change adaption, how policies will take a role in strengthening resilience for communities and reducing people’s vulnerability.
Closer to home, legal practitioners within Australia must begin identifying and discussing the effects of extreme weather conditions on property matters with their clients. It is an increasingly complex area of practice, especially when advising on matters in a climate of constant change. Looking back in time to determine risk levels is no longer sufficient. There is a need to seek data insights and information to assist with vendor disclosure on the risk profile of a property. Not only at the time of sale or purchase, but also for the long-term resilience of that property in the next 20 to 30 years from now.
To begin the projection work required, InfoTrack is investing in technology to provide the industry with tools to properly advise their clients. Using environmental search authorities and predictive analysis we aim to provide expert information on long term climate risk insights. What this essentially means is quality, useful location data that will assist the recipients to make informed decisions. It is a core tenet of InfoTrack to pioneer technology to support legal practitioners with the most accurate and actionable data possible, so they can then advise clients on their property transactions. But going beyond this, we can see from the research on climate change that providing this data for property owners is no longer a need, but a requirement.