Outstanding claims against Telstra

8/3/2019 Outstanding claims against Telstra

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' . ustralian GovernmentDepartment ofCommunications,Information Technology and tbe Arts

ML""ISTER FOR C O ~ f M U N I C A T I O N S , I ~ F O R \ - I A TIO.N TECHNOLOGY AND TBE ARTS

I'-\ .; f\ v ,.. cul,' F ~ L plr- .)L U/ ro

Minute No:M2005/1395

cc: Minister's Office, Secretary, Oep Sec Comms, Oep Sec Lnfo Econ; CGM Tel, GM EfBSUBJECT: Outstanding claims against TelstraTIMING: 1 November 2005 . Senator Joyce has sought 'earliest 'response to his letter.

~ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -RECOMMENDATION/ISSUE: That you sign the enclosed letters to SenatorJoyce and the Acting Chair of the AustralianCoinmun1cations and Media Authority

NlJ ~ N SignedL ~ ~ ~ ~ HE!iEN \

... ...j. .... / 2005 .6I.- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _ _ J KEY POINTS:

Senator Joyce has written to you seeldng urgent advice on your proposedapproach to the conduct of independent assessments of varjous claimsagainst Telstra by customers or former customers or contractors of Telstra. vVe propose you ask the Australian Communications and Media Authority(ACMA) to conduct the assessments. I t is proposed you tightly constrainthe fonn of assessn1entmade by the ACMA to one of determining thestatus of disputes and whether all dispute resolution options have b eenexplored. There is significant risk for the Government if expectations in relation tocompensation are created among cl imants that cannot be metby theGovernment.

SIGNAT URE:NAME: Cirew. Madsen , Ng GMB R " ' V C H ! D I V I S Competition and Consumer I Telecorrununica tionsDATE: /6 October 2005CONTACT OFFICER: Dav id LeverTEL; 627 1 1502

www.badapples.com.au
http://www.badapples.com.au/http://www.badapples.com.au/


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..ADDITI 0 NAL INFOR.t'VIATION:BackgroundWe are advised by your office that Senator Barnaby Joyce wrote to you on .13September 2005 to seek, among other things, "closure on any compensatorycommitments given by the i\llinister or Telstra regarding prior legal issuescurrently outstanding. vVe have had a nun1ber of representations from peopleclaiming that they have been given warrants of compensation by people in theDepartment and people in the previous Telstra Executive, although I have noability to judge the veracity of these claims. I have given these people mycommitment that I vvill follow them up.'Your office has also advised that you responded to Senator Joyce, also on 13SepteTnber, that 'these claims are against Telstra. I agree there should befinality for all outstanding COT cases and related disputes. I believe that themost effective way to deal with these is for me to appoint an inqependentassessor to revievv the status of all outstanding claims and to proVide a basisfor any sustainable claims that have not been resolved thro1J.gh...earlier .. , . ,.processes to negotiate a possible sett lement with Telstra.7Your office has not provided the Department with a copy of thiscorrespondence.On 6 October 2005 , Senator Joyce's office attempted to email to your office alist of constituents' who had approached the Senator seelting his assistance.The email was eventually received, on re-sending, on 11 October. Theconstituents include 6 of the Casualties ofTelstra (COTs), 11 small businesscustomers ofTelstra who were not COTs but have subsequently h ad disputeswith Te1stra, and 5 ex.,Telstra contractors from Queensland. A list of thecases is included in Attachn1ent 1.Senator Joyce vvrote to you on 6 October (Attachment 2), askingyou toprovide him with an outline of any criteria you are considering in determiningwhether an independent assess1nent is warranted and what process you willput in place for conducting the assessments.-senatorJoyce also suggested-thatityou-orTelstra is-aware ofanysrnaUbusiness customers not included on the list of persons who have outstandingclaims against Telstra, these customers' cases should additionally be coveredby the independent assessment.DiscussionvVe understand from your office that you would like all of the cases listed inAttachment 1, including the former contractors to Telstra, to be considered inthis exercise, if not included in the independent assessment.There is a risk that an independent assess1nent process could prove difficultto contain to the persons specified in Attachment 1 and create expectations in



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3relation to compensation that may not be capable of fulfilment and so lead tocriticism of the Government.vVe are aware of persons not on the list who are currently lobbying, or havepreviously lobbied, the Government for assistance in relation to claimsagainst Telstta. These persons may also seek to be included. H o w e v e ~ , adding the1n to the list supplied by Senator Joyce risks further expanding thegroup as others may come forward.The lYiinister has no power to direct T e l ~ t r a to take specjfic actions to resolvedisputes. To raise expectations that an independent assessment will result inc01npensation or increased compensation from Telstra, without an ability toinfluence the outcome, n1ay lead to criticism of the Government.The four 'original' COTs and t"No COT-type cases in Group A in Attachment 1all had their cases considered as part of a con1prehensive Governmentresponse to a 1994 report by the then t e l e c o m m ~ n i c a t i o n s regulator,AUSTEL, entitled rThe COT Cases'. Each of the six received considerablecompensation, either as the outcome of a commercial settlement or anarbitration Gonducte..d by a. ~ p e c i a l arbitrator aJ?p.Qinted QY t h ~ Telecommunications Industry 01nbudsman (TIO) and under arbitration rulesestablished and administered by the TIO. Each COT has, however, continuedto lobby the Government, and in some cases, commenced court action,alleging that Telstra withheld evidence or provided misleading informationduring their .arbitration.The extensive publicity given to the COT cases report and speculation aboutlarge awards appears to have encouraged a number of other small businessowners to claim con1pensation from Telstra for various alleged servicedeficiencies. They comprise Group Bin Attachment 1. Certainly, a number ofother cases emer din the second half of the 1 os the most notable ofwhich were Othercases, such as have emerged over .r; .the last two or three years.Group C con1prises con tractors or former contractors of Telstra, all based inQueensland, who have alleged breach of contract or unfair practice by Telstra.Wf u n d e ~ t a n d t h a t these c l ~ i m s arosg_from a decision t a k e by Telstrajorationalise its cable layer contracting practices in the late 1990s, when Telstrareducecl the number of contractors used. Some contracts were not renevved orvvere reduced in scope, and the affected persons have claimed that losses wereincurred due to investments made on the ectation of a continuation ofexisting contracts.- has represented the contractors and former Senator Len Harris h asalso made representations on their behalf.vVe have sought further information fron1 Telstra on the nature and status ofclaims made by each of the persons listed in Attachment 1, but it has not yetbeen received.



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4a solicitor and barrister who has represented some of the smallbusiness owners c1aiming con1pensation, wrote to you on 29 September 2005(Attachment 3), pressing the daims of her current dients,At the same time, she advocates ... tt 1not including among the cases to be assessed on the grounds that ;she has previously received adequate compensation and has allegedly actedin1properly in an attempt to obtain increased compensation.

Proposed strategvv'le propose that the Australian Communications and Media Authority berequested to conduct the independent assessment. Both AUSTEL and, morerecently, the Australian Communications Authority, have had an importantrole in the past in relation to the CoT cases.We consider that risk may be minimised by conducting an independentassessment of all cases referred by Senator Joyce, but tightly constraining thescope of the assessment. We suggest that the independent assessn1ent berestricted to a consideration of: whether Telstra has responded adequately to the outstanding clain1s ; and whether the clC;limants have availed themselves or are aware of alternativedispute resolution mechanisms.We consider it would be inappropriate for the assessment to include anevaluation of the strengths and weaknesses of the parties' positions. TheAC:NIA 'does not have the requisite information, resources or expertise toengage in such an assessment. However, the ACMA could seek to identifyways by which the claimants themselves could progress their claims withinthe ex isting complaint anq dispute resolution framework.Some of the persons who have made representations to Senator Joyce maynot vvish to participate in an independent assessn1ent by the ACl\IIA. TheDepartment could write to each person on the list at Attachment 1, suggestingthey contact the ACJYJA should they vvish to have their case independentlyassessed.You could request the AClVIA to provide you with a report on the outcome ofits assessment of each case by-31 January 2006. You could also asl


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5 ~ g . Attachment 1

LIST SUPPLIED BY SENATOR JOYCE

Group AThe four 'original' CoTs

)GroupE

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Group e



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A U S T R A L I A .L-. f/ '/_J\,.. ...._,

BARNABY JOYCE

I \'"'"

The o n a l Senator fo r Queensl.:md61h October 2005

The Hon Helen CoonanMinister for C o m m u n i a t i o n , : > ~ - .......- --- :- :-: -ilTechno logy and the Arts ~ ~ ~ ; O l l ~ Parliament House t\ OCT lm5Canberra ACT 2600 I ; i F.L.S.

Dear Ministe r Coonan,Telstra- Compensatory Comm i tments

, . . . . , . \" ... ,. - , . - ...' - v ~ l L . .I .1r!-t .o L .,::o;,40 .. 1,.. _;_, __ - o . t ' \ ~ d lo t he OtTiee or file : ' > ! i n i ~ ;? tfor ( n m ' f i t : ' , ~ t '"4\ ' f , ; t iTc:(la ' ' l ~ e ) l l

1 1 OC'f 2005

Thank you for your letter dated 131h September -n which you have agreed toappoint an independent assessor to revi'ew the status of all outstand ing claimsaga inst T elstra and to provide a basis to negotiate a possib le settlement withthem.I would greatly appreciate it if you could please provide me with an outline ofany criteria you are considering in determi ning whether an independentassessment is warranted and what process you will put in place forconducting the assessments. Obviously, the affected constituents .are keen fo rtheir c la ims to be progressed and require an understanding of the proposedprocess and timeframe.My office has forvva rd ed a list of those constituents who have sought r.nyrepresentation to your offce. I would assume that if you, or Telstra, are awareof any others, they will be included in th is process?I look forward to your earliest response and would like to thank you forassisting our constituents in finalising the outstanding disputes.Kind regards,. ...... . ......

Senator Barnaby JoyceThe Nationals Senator for Queensland

Padiament Hou3e, 01nberra. ACT '?tJ00 o Phone: 02 6277 3377 l-'lx: 1)26T':" 3000www.badapples.com.au


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29 September 2005Senator Coonan,Pa rliament House ,CANBERRA AC .T.

Dear Senator CoonanRE TELSTRA CLAIMS ADVICE FROM SENATOR JOYCEI have received information from Senator Joyce your office has agreed to settingup a procedure that will resolve claims outstanding against Telstra, whichincluded claims bv three of mv clients -

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\'Ir ChJis CheahAct[ng ChairAustralian Commumcationsan d Media Authority (AC!VLA..)PO Box l3l l2 Law Courts PONffiLBOURNE VIC 3000

Dear Mr CheahClaims against Telstra

Ml:"'ISTER FOR t \ . \ - ' ~ S . TECHXOLOGYA:',D THE ARTS

Se no tor the Hon He len CoonanP


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the claims by these customers or former customers or contractors vary considerabtyin nature and the extent to which third parties, such as the TIO, rhe A u s t r a l i ; : ~ n Competition and Consumer Commission (ACCC), the Australian Communicationsand Media Authority (ACMA) or the courts. have been involved.Before sale of the remaining Government ownership in Telstra occurs; I am keen toensure that the outstanding claims refened to above are no t evidence of a systemicproblem vvith resolution of complaints against Telstra. The Govemment would llke tobe sure that Telstra has in place approptiate compiaint handling procedures and thatthere are no impedin1en ts to access to alternative dispute resolution mechanisms, snchas the TIO, the ACCC and the ACMA..-\!1 appropriate first step would be for rhe ACMA to conduct an assessment cf each oftbe cases listed in the attachment to this letter, having regnrd to the following issues,in particular:e whether Telstra has responded adequately to the outstanding claims; and whether the claimants have availed themselves or are aware of alternative disputeresolution mechanisms. It is not expected that ACMA make its own assessment of each case, in the sense ofevaluating the strengths and weaknesses of the parties ' positions. However, ACMAsh.otlld seek to identifY ways by which the claimants themselves could progress theirclaims within the existing complaint and dispute resolution framework, i f they havenot already done so.To facilitate this process, the Department of Communications, Inf01mation Technologyand the Arts will Wlite to each person on the list, suggesting they contact the ACMAshould they wish to have their case independently assessed by the ACMA, in order toascetiain whether and what dispute resolution processes are available to them.t request that the ACMA prov1de me wtth a report ou the outcome of ils a s s t : : : ; ~ m e n L ofeach case by 31 January 2006. I wou ld also appreciate. he ACMA's views onwhether the cases considered constitute evidence of a systemic problem with Telstra'scomplaint handling or dispute resolution procedures, or of impediments to access toaltemative dispute resolution mechanisms.Yours sincerely

HELEN COONAN

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OUTSTANDING CLAI!VIS AGAJNST TELSTRA

Group A

Group B

Group C



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Senator Barnaby JoyceSenator for QueenslandParliament HouseCANBERRA ACT 2600

Dear Senator JoyceClaims againstTelstra

M I : ' ~ I S T E R FOR COM:\lUNICATIONS,F O R J \ I A T I O ~ TECHNOLOGY

D T H E A R T S

Senntor the Hon HelenCoonnnPARLIAMLNT HOUSECANBERRA ACT 2600

telephone: (02) 6277 - 4XOFacsimile: (02) 6273 4154www.min1 St


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The Departrnent of Communications, Infonnation Teclmology and the A1ts w[Jl wri.teto each person on the list your office provided, suggesting they contact the ACMA ifthey wish to have their case independently assessed by the ACMA, in order toascetta in whether and what dispute resolution processes are available to ther:1.I have requested the ACMA to provide me \vith a report on the outcome of itsassessment of each case by 31 January 2006. I have also sought the ACMA 's viewson whether the cases it considers constitute evidence of a systemic problem withTelstra's complaint handling or dispute resolution procedures, or of impediments toaccess to alternative dispute resolution mechanisms.I am confident that this proposal will address your constituents' concerns.Yours sincerely

HELEN COONAN

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Outstanding claims against Telstra

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