RAA Aus resignations

[David Isaac]

Certainly the RA Aus issue would appear to be PI in the Sting Issue Tubz.

 

 

[Teckair]

I'd say that the general area of the accident is more toward largeish boulder size and plenty of them. Didn't the BRS inflate on deployment and the wind dragged the aircraft some distance also hitting another large boulder?

The way the report read the BRS was not deployed but deployed itself on the initial impact which was when the occupants died. My understanding is the angle of arrival did the damage however I maybe wrong because as we know what causes RAAus accidents is not revealed. It is pity this problem is not actively being addressed instead some other activities RAAus concentrates on like how to become more like GA.

 

 

[turboplanner]

Certainly the RA Aus issue would appear to be PI in the Sting Issue Tubz.

I think so, certainly in the activity to date, but there's plenty of time for PL to come into it in other areas.

 

 

[eightyknots]

I suppose if you can afford $150k for an LSA you can afford $500 a year RAA subscription.

From what you wrote here f_t, it looks like you're suggesting that RA-Aus subscriptions should be linked to the value of the aircraft?

 

(A bit like council rates which are levied according to property values).

 

 

[Guest Andys@coffs]

Just for absolute clarity, lets ensure we dont get things mixed up from a timeframe point of view. PI insurnace which is their to protect the board members, is a policy that is ineffect at the time that the alledged conduct/ missmanagement took place. As such, a legal case today, about an activity that took place 5yrs ago will be covered by the 5yr old policy. As such, a lack of PI insurance today has zero bearing on board members comfort or otherwise relating to the events of 5years ago, but is extremely relevant to actions or ommisions that take place today and may end up in court years down track.

 

It seems as though people are confusing the historic events and their associated today legal cases with the recent insurnace issues. They are unrelated as I understand it.

 

Further, there was an inference that if we had $1m in RAA coffers and a judgement of $5m was awarded against RAA that we the members would have to come up with the shortfall. That is simply untrue as I understand it. The entire incorporated association balance sheet is available to address any judgement but not one cent more, unless the board recommends that it would be logical to do so. For example lets say for simplisity sake that the blance sheet, showed $1m cash at bank, and another $1m in less fluid assets. a Judgement of $1.1m is awarded against RAA then the board may well recommend that members pay a once off $30 additional paymnet such that the future cash at bank was $1m +(10,000 x 30) which means that RAA was able to meet its judgement and then continue as an incoporated body assuming that all members remaind members, because as members you always have teh option of voting with your feet.

 

If the judgement was $5m then the board may determine taht the organisation be wound up in which case the total balance sheet becomes available to service the judgment, but nothing beyond, in which case their would be $2m (plus or minus liquidation costs) probably minus legal costs to provide for the judgment. The remainder of the $5m judgment is as useful to the plaintiff as the air above you when flying and suffering an engine failure or the fuel left in the drum on the ground when you suffer fuel exhaustion far from your airport of departure...

 

Andy

 

P.S As lawyers go.....I dont..... so this in no way can be construed as professional advise, rather a summation of 5 minutes of googling incorporated bodies.

 

P.P.S Turbo tells me that the protection inteded by state parliments in the incorporated association legislation is not as effective as is widely believed at protecting individual members from an associations liability, however if that were so I would expect the legislative bodies to regroup and recaste the protection unless the intent is to allow "Not for Profit" associations to go the way of the dino's. I cant see Joe public, on becoming aware of that, allowing that to continue, without punishing at election the polly that stood by and watched that disaster unfold.

 

 

[David Isaac]

Just for absolute clarity, lets ensure we dont get things mixed up from a timeframe point of view. PI insurnace which is their to protect the board members, is a policy that is ineffect at the time that the alledged conduct/ missmanagement took place. As such, a legal case today, about an activity that took place 5yrs ago will be covered by the 5yr old policy. As such, a lack of PI insurance today has zero bearing on board members comfort or otherwise relating to the events of 5years ago, but is extremely relevant to actions or ommisions that take place today and may end up in court years down track.It seems as though people are confusing the historic events and their associated today legal cases with the recent insurnace issues. They are unrelated as I understand it.

Andy, by way of correction PI insurance works on a claims made basis, the complete opposite of what you are saying above. What insurance you had at the time of the actual event occurring has absolutely NO bearing on your liability protection. PI is unique in this regard and you MUST be insured at the time of the claim (discovery). So an incident that occurred 5 years ago has full liability to you unless you are insured 5 years later when the claim is made against you. Which is why retiring professionals still carry PI insurance after retirement, although on a diminishing premium basis.

 

Further, there was an inference that if we had $1m in RAA coffers and a judgement of $5m was awarded against RAA that we the members would have to come up with the shortfall. That is simply untrue as I understand it.

Correct the members liability extends to the value of their current subscription and that is all. But you are forgetting that the Board members do not benefit from that protection and a separate action can be brought against the directors personally.

The entire incorporated association balance sheet is available to address any judgement but not one cent more, unless the board recommends that it would be logical to do so. For example lets say for simplisity sake that the blance sheet, showed $1m cash at bank, and another $1m in less fluid assets. a Judgement of $1.1m is awarded against RAA then the board may well recommend that members pay a once off $30 additional paymnet such that the future cash at bank was $1m +(10,000 x 30) which means that RAA was able to meet its judgement and then continue as an incoporated body assuming that all members remaind members, because as members you always have teh option of voting with your feet.

Yes the Board could do that, but the members are not in any way obliged to agree. they could simply form another association and walk away from the liability.

 

If the judgement was $5m then the board may determine taht the organisation be wound up in which case the total balance sheet becomes available to service the judgment, but nothing beyond, in which case their would be $2m (plus or minus liquidation costs) probably minus legal costs to provide for the judgment. The remainder of the $5m judgment is as useful to the plaintiff as the air above you when flying and suffering an engine failure or the fuel left in the drum on the ground when you suffer fuel exhaustion far from your airport of departure...

Except the plaintiff may have a remedy against the Board members as stated above.We the members are protected but the Board members we elect are NOT.

 

 

[Guest Andys@coffs]

David

 

Live and learn.......No wonder the issue of PI was such a thorny issue. As an employee of a large organisation who has never hung out a shingle, it would seem to me that with insurance of this type with the always extended timeline from "I think I'll sue" to "and the winner is......" it would seem that we are beholden to any insurance company to ensure that the continue to offer the policy we need, as when I googled then, there was a comment that changing insurers breaks the chain and a policy now wouldnt protect against a claim for back then if your insurer back then isnt the same as now....talk about having it both ways!!..... How does such an insurance ploicy work...I would have thought that as soon as an insurance company got wind of a legal action they would simply walk away at renewal time?

 

Andy

 

 

[Tex]

I have to disagree with David a little here, for arguments sake, (I could be wrong) RE PI: it depends on the policy if you are covered now for past events. New policies will often have an effective start date (claims for incidents which occurred before that are simply not covered or specifically excluded). If you notified the insurer 'then' of a possible claim or incident that did not eventuate into a claim until some later time ... by then insured by another .... the original insurance company is still liable for that claim (long tail claim).

 

Lets not forget statutory time limits as well.

 

 

[David Isaac]

... Live and learn.......No wonder the issue of PI was such a thorny issue. As an employee of a large organisation who has never hung out a shingle, it would seem to me that with insurance of this type with the always extended timeline from "I think I'll sue" to "and the winner is......" it would seem that we are beholden to any insurance company to ensure that the continue to offer the policy we need, as when I googled then, there was a comment that changing insurers breaks the chain and a policy now wouldnt protect against a claim for back then if your insurer back then isnt the same as now....talk about having it both ways!!..... How does such an insurance ploicy work...I would have thought that as soon as an insurance company got wind of a legal action they would simply walk away at renewal time? ...

LOL ... we are always learning mate. You got it in one Andy,

PI is tricky and you need to be on top of the issue and it is essential that you prove to your insurers that you are a 'reasonable risk'. If the insurer gets any wind of negligence they will either decline to insure you or raise the premium sky high. Staying with the same insurer is essential for extended cover because changing insurers will usually come at the exclusion of claims for previous operations, unless you can make special arrangements , but they will depend entirely on your risk profile and history.

 

It gets worse, last year RA Aus went through 16 insurers before we found one that would cover us. So wouldn't you think that given the difficulty we had getting insurance last year and given the problems the CASA audit raised, missing documentation and alleged inappropriate LSA certifications (evidenced by the recent withdrawal of for aircarft types) and the revelations that surfaced with various aircraft incidents that the RA Aus manager would have gotten the renewal declarations and arrangements in place well ahead of the renewal date ...? It didn't happen, the renewal went in on the 24th of April the day before ANZAC day and the insurance expired at 4-00pm on the 30th. That gave the insurer only three days to verify our data and assess the renewal ... so you can imagine the temperature in the Board room.

 

It would seem with a series of events at the hands of the RA Aus manager starting with the alleged unauthorized withdrawal of Junior membership, the alleged unauthorized commencement of threatened legal action and the failure to renew insurance in a timely manner are matters on which the Board appears reluctant to hold the relevant person accountable. Very smart corporate people the likes of Don Ramsay and Bill Cain don't resign for petty reasons. Quite possibly the two smartest Board members we had. Perhaps smart enough to get out. I doubt you would get smart people running for Board positions if they understood the liability issues and the inadequate insurance cover until the Board can hold management accountable. If the Board don't fix the management accountability issues, they potentially expose themselves to significant financial risk.

 

Would you put all your personal assets on the line for RA Aus given the level of issues recently discovered in our aircraft registration surveillance???

 

 

[David Isaac]

..... If you notified the insurer 'then' of a possible claim or incident that did not eventuate into a claim until some later time ... by then insured by another .... the original insurance company is still liable for that claim (long tail claim).Lets not forget statutory time limits as well.

Correct Tex but you have to have notified them before the policy expired with them and then you are covered. If you don't notify them because you were unaware of a pending claim (there was no discovery) you are on your own. Statutory time limits don't apply to PI unless you have discovery in place. Remember PI is unique in this regard.

 

 

[Tex]

OK Thanks David:cheers:

 

 

[eightyknots]

We the members are protected but the Board members we elect are NOT.

If Board members carry out their fiduciary duties to the best of their ability, technically they are not liable. However, as has been pointed out, this has to be proved in court and the legal (and perhaps contracted) proceedings are likely to be costly to the organisation, even if RA Aus eventually wins the case.

 

Something has to be done about the vulnerability of individual Board members. There are only three ways that I can think of:

 

1. Organise proper insurance cover (obviously this has been difficult, so one of the next two methods will have to suffice);

 

2. CAA indemnifies RA Aus for any legal comeback (if this ever happened, CAA would like a lot more say in RA Aus matter and RA Aus is likely to become a quasi- "arm" of CAA); or,

 

3. The Federal government passes legislation that indemnifies RA Aus (this is not as crazy as it may first seem when you read this. A lot of lobbying by RA Aus members of the Federal parliamentarians may achieve this ...it just needs a groundswell of RA Aus members to pull this off).

 

 

[M61A1]

From what you wrote here f_t, it looks like you're suggesting that RA-Aus subscriptions should be linked to the value of the aircraft?(A bit like council rates which are levied according to property values).

I thought that he was implying that should the RAAus membership prices increase dramatically, that those who can afford these fast and expensive aircraft will have much less trouble accomodating the fees, while those of us who turned to ultralights, because it was the only way we could afford to fly, will not be able to afford it.

 

 

[eightyknots]

I thought that he was implying that should the RAAus membership prices increase dramatically, that those who can afford these fast and expensive aircraft will have much less trouble accomodating the fees, while those of us who turned to ultralights, because it was the only way we could afford to fly, will not be able to afford it.

Or, f_t could have been suggesting that owners of expensive 'plastic fantastic'-type planes are levied more than the wind-in-your-face/rag-and-tube planes? ...a kind of sliding scale set of fees based on the make and model of aeroplane??

 

The problems with this are:

 

What if you don't actually own a plane and fly other owners' planes?

 

What if you own two planes and choose to fly the rag-and-tube plane 80% of the time?

 

Etc, etc....

 

 

[turboplanner]

If Board members carry out their fiduciary duties to the best of their ability, technically they are not liable. However, as has been pointed out, this has to be proved in court and the legal (and perhaps contracted) proceedings are likely to be costly to the organisation, even if RA Aus eventually wins the case.Something has to be done about the vulnerability of individual Board members. There are only three ways that I can think of:

 

1. Organise proper insurance cover (obviously this has been difficult, so one of the next two methods will have to suffice)

 

2. CAA indemnifies RA Aus for any legal comeback (if this ever happened, CAA would like a lot more say in RA Aus matter and RA Aus is likely to become an "arm" of CAA)

 

3. The Federal government passes legislation that indemnifies RA Aus (this is not as crazy as it may first seem when you read this. A lot of lobbying by RA Aus members of the Federal parliamentarians may achieve this ...it just needs a groundswell of RA Aus members to pull this off)

 

Firstly, The "Board" being referred to is not a Board of Directors, and is not attached to a Company with Limited Liability. The posts and threads on this site continually cross over into this confusing territory.

 

So laws relating to limited liability companies, and company procedures which people on this site may be familiar with in their day to day life do not necessarily apply. In fact I'd go as far as to say Company experience can be an impediment to understanding how RAA is structured.

 

What does matter is Incorporated Associations law in the Australian Capital Territory, the Constitution of Recreational Aviation Australia (there is no such thing as RA Aus), and any regulations/rules/bylaws it may have produced and either published or not made public.

 

The "Board" you are referring to is a board of management, which consists of people who remain members of the Association, and do not necessarily have the powers or separation or responsibilities referred to in this thread.

 

The thread itself is confused by at least two types of insurance, several "incidents" or potential claims, various individuals who may involved in one incident but not in another, who may have made an incorrect decision in a critical incident or non crtitical incident, who may have departed for a valid reason or a misunderstanding.

 

Even then I don't think I've summed up all the nuances.

 

It's a good example of how the Net provides us with rapid communications, but how that goes with many different levels of experience, knowledge and agenda. Nothing you wouldn't encounter in a robust Club Meeting, but at warp speed.

 

In terms of points 2 and 3, Eighty, I've covered this before.

 

(a) You can't hand off a tort - to the Federal Government, or anyone else.

 

(b) No one in Australia, including the Prime Minister, has immunity from Criminal Prosecution

 

In the 1980's Governments started divesting themselves of risk by getting out of any activity which put them in the Chain of Responsibility.

 

For example, In Victoria the Department of Labour and Industry used to have inspectors who regularly visited factories checking cranes, chains, hooks, machine guards etc., and providing either a "Do Not Use" notice or a Certificate of Safety.

 

That stopped, the DLI was closed down and factories became responsible for managing their own affairs.

 

One exception is Dotars in road transport and aviation, which did nolt cut all ties, and in a couple of cases foolishly stepped back into control positions, reassuming liability.

 

Under that environment, having distanced itself from control of recreational aviation, the Federal Government is unlikely to be keen to take on more risk.

 

A request to CASA to leave control in the hands of volunteers, but assume liability, as you suggest would probably produce a rare round of laughter and email swapping.