The class action was filed against multinational insurance broker Jardine Lloyd Thompson who was acting on behalf of many of the state’s 128 local councils through Statewide Mutual.

The council’s communications officer Allan Reeder confirmed the council had joined the class action against JLT.

“Along with councils across the state, Orange City Council received insurance services through JLT as the broker for 16 years, which ended in 2018,” he said.

“Orange City Council put its insurance requirements out to tender, and during the first year with a new firm there were significant savings of several hundred thousand dollars.”

Mr Reeder said council had joined the class action on a no-win-no-fee basis, and there would be no direct cost to ratepayers.

Meanwhile, Cabonne Council spokesperson Dale Jones said it had a “long-standing relationship with Statewide Mutual” which it said was an insurance group that was “specifically tailored for local government and underwritten by Jardine Lloyd Thompson”.

“Council has enjoyed a good relationship with Statewide and is happy with the cover we currently have,” he said.

“Cabonne is aware of the class action, but does not have any plans to join that class action at this stage.”

However Mr Jones said that while the council was happy with its current arrangement, it was still possible that it might undertake “market testing when the current premiums are to be renewed”.

Law firm Quinn Emanuel Urquhart and Sullivan lodged the class action on behalf of all local councils, and managing partner Michael Mills said many of them were still with Statewide Mutual.

“They’ve been overpaying for many years,” he said of the mutual’s member councils.

Mr Mills said it was not uncommon for large corporations and businesses to seek out a broker to secure competitively-priced insurance policies due to the complex nature of the premiums needed.

He alleged that JLT did not “shop around” for better priced insurance policies for councils and that it may have had a “conflict of interest” in selecting higher cost premiums that led to commissions for JLT.

Orange council was not the only one to have paid excessive fees, with Parkes Shire Council also joining the action to try and claw back the estimated $2 million it paid in excessive premium charges during a 10-year period.

Parkes council director of corporate services Les Finn said it was only when council left Statewide Mutual and put their insurance costs out to tender that they realised money could be saved.

“In the first year we received a 42 per cent decrease in our insurance policy [cost], this was equivalent to $230,000,” Mr Finn said.

“We estimate it’s been around $230,000 a year for 10 years that we paid too much.”

More information is available on the JLT Local Council Class Action website.