Bob jane's reply to Colin Osborne's reply to Bob Jane

[RaceTime]

TO: ALL PROMOTERS, MOTOR SPORT MEDIA, MOTOR SPORT CLUBS AND INTERESTED PARTIES
FROM: BOB JANE representing Calder Park Raceway and Adelaide International Raceway

Please note that my statements are, to the best of my knowledge, true and correct and I am prepared to make a sworn statement to that effect.

I will also note Colin Osborne’s statement on 24 December 2003 and I quote:

“ … I note that various individuals have attempted to rebut the facts published by CAMS in the document titled 'CAMS response to Bob Jane's recent correspondence dated 16 December 2003'. CAMS stands by all the facts set out in its last response and does not propose to make any further comment…”



Colin, you state you will stand by all the facts set out in your last response. All I can say to you is that you should have stayed in bed the day you responded.

REBUTTAL: CAMS Response to Bob Jane’s Recent Correspondence Dated 16 December 2003

Issue 1:
“ … In the statement titled ‘Bob Jane & Calder Park not informed of potential insurance deficiency’, distributed on 17 November 2003, Bob Jane attempts to blame CAMS for the financial exposure to the Bob Jane Group of Companies:
… the Bob Jane Group of Companies recently incurred significant exposure of a possible multi million dollar damages claim plus legal claims due to the Confederation of Australian Motor Sports (CAMS) failure to disclose the insurances it arranged for the Bob Jane Group …
… the Bob Jane Group was placed in a dire position by the party responsible for the event’s Insurance, an action that has cost the group operational losses, plus significant and unnecessary legal costs for the Bob Jane Group.

WRONG!

THE FACTS ARE:
The Bob Jane Group of Companies was involved in a large claim arising out of an ANDRA incident in 1995.

The Bob Jane Group of Companies was potentially exposed when two of the underwriters, HIH and The Independent (both prominent insurers), on the CAMS insurance policy went into liquidation – this was entirely beyond the control of CAMS.

The 1995 claim was settled with some contribution paid by CAMS and ANDRA to cover shortfalls left by the defaulting insurers. The Bob Jane Group of Companies did not make any monetary contribution to that settlement …”

“… The Bob Jane Group of Companies was involved in a large claim arising out of an ANDRA incident in 1995…”

Colin, you forgot to add these important words: “… which was covered by CAMS’ Public Liability Insurance illegally forced upon ANDRA in 1995/96…” and that it was the last year that ANDRA used CAMS insurance. Colin that was an interesting omission of a fact!

“… The Bob Jane Group of Companies was potentially exposed when two of the underwriters, HIH and The Independent (both prominent insurers), on the CAMS insurance policy went into liquidation – this was entirely beyond the control of CAMS …”

This is an interesting fact when you say “… this was entirely beyond the control of CAMS …” Does this mean that you do not have control over the insurance you buy for promoters and clubs? Does it also mean that you, CAMS, do not take any responsibility over this important matter? Based on your ‘facts’, this is exactly what you are saying!

“… The 1995 claim was settled with some contribution paid by CAMS and ANDRA to cover shortfalls left by the defaulting insurers. The Bob Jane Group of Companies did not make any monetary contribution to that settlement …”

You are correct here. My company did not cover any shortfalls for very good reasons. CAMS were found responsible for the shortfall and both Bob Jane and ANDRA had paid our insurance fees in good faith and I was not prepared to pay any more.

I did pay in the sense that Calder Park and AIR, with ANDRA, had a potential exposure of AUS$18.7million for a potential claim for an incident in 1995 that materialised in 1999. It was not resolved until 2003.

I can also say that there were other promoters who had public liability claims during the period of 1995/96. In these cases, CAMS suggested to these promoters that they share with CAMS the burden of this non-coverage 50/50. One promoter at least agreed to this solution of paying 50/50 with CAMS.

My position as a promoter and owner of Calder Park Raceway and Adelaide International Raceway facing a potential expense of AUS$18.7million was to virtually stop both motor racing and open drag racing until there was a resolution. I had been asked by CAMS’ lawyers what my decision was in regard to payment. CAMS did not offer to pay 50/50 on this matter with Calder Park Raceway.

During 1999 and the recent resolution to this claim in 2003 as the matter was in court, I was unable to disclose any part of this matter. Perhaps some of the people reading this will now understand what happened in the last 3 years at Calder Park Raceway and Adelaide International Raceway, and why I do not trust the present CAMS insurance with no cover for the first $100,000 of any claim or CAMS’ promises or more importantly, CAMS’ ability to pay.

Issue 2:
“… In the same document, Jane encourages:
… Australian motoring clubs, associations and motor sport competitors to question the current situation in relation to motor racing event and competitor insurance cover.

THE FACTS ARE:
CAMS’ ‘Confirmation of Insurance’ documents are available on the CAMS website for anyone to peruse.
CAMS encourages people to view the documents at www.cams.com.au...”

Colin, this is more black smoke. The issue is how CAMS will pay, not the bull**** that is on your web site.

Issue 3:
“… Further on in the statement Bob Jane asserts:
There are distinct and very important differences between the AASA and CAMS event insurance. The AASA policy has a $25,000 deductible component being absorbed by the promoter using AASA Public Liability insurance and this $25,000 excludes legal costs.
The CAMS policy has a $100,000 deductible factor for any incident, which includes all legal costs relating to each claim. This is a four-time increase compared to the AASA cover and when legal costs are taken account, the increase could be 12 to 14 times more for each claim …

WRONG!

THE FACTS ARE:
CAMS has a $100,000 excess for each incident, irrespective of the number of claims arising from that incident.

The $100,000 excess includes legal costs and therefore is the maximum that will be paid per incident.

CAMS does not pass this excess on to any other party, paying the excess out of an insurance excess fund, which enables CAMS to absorb the costs, ensuring it is not passed into the membership. This is possible because of the strong financial position of CAMS.

Following extensive financial analysis and insurance advice, the $100,000 excess level was found to be most effective, given the insurance market conditions prevailing at that time.

Jane states that organisers and other insured parties will pay the $25,000 excess on the AASA policy plus any legal costs.

CAMS has a $100 million public liability insurance cover which we understand far exceeds the public liability cover provided by the Australian AutoSport Alliance (AASA)…”

The AASA policy is $25,000 without any legal costs.

I, and many others, not only question the need for CAMS $100 million policy, but worry also about the fact that the first $100,000 of any claim is not covered. This type of policy borders on self-insurance or calamity insurance.

Issue 4:
“ … Jane goes on to make accusations against CAMS:
“It has come to our attention that clubs, competitors and organisations are being recommended against using our venues in relation to insurance”, he said

WRONG!

THE FACTS ARE:
At no time has CAMS recommended that clubs, competitors and organisations not use venues insured by bodies other than CAMS.

CAMS has recommended that anyone intending to participate in events run by bodies other than CAMS should thoroughly check all aspects of the event including insurance, safety, risk management, rules and judicial procedures…”

Colin how can you say all of the above when your director, Peter Bready and your Victorian State Manager addressed the Jaguar Car Club meeting on the dangers of them using Calder Park Raceway for a club event and AASA insurance etc. There is also the MG Car Club who were not prepared to use Calder Park for a club event. There is the AVESCO support of CAMS position where AVESCO has ruled that AVESCO members cannot use Calder Park for either practice or corporate rides. Brad Jones was charged over using Calder Park Raceway by AVESCO with the hearing at Bathurst this October.

So Colin most of the CAMS’ family know what CAMS have done with Calder Park Raceway. It is no wonder then that your words and writings sighting facts are seen for what they are – bull**** (i.e. my polite way of saying ’lies’)

Continued in part 2

[RaceTime]

Continued from part 1

Issue 5:
“… Jane also asserts that CAMS cannot afford to finance the excess on future insurance claims:

Yes, CAMS promise to absorb this $100,000 or multiples of these $100,000 incidents…

… To all promoters and clubs, talk to your accountant to evaluate CAMS’ balance sheet and consider the implications if CAMS failed to meet their promise to pay. Can you afford one or more $100,000 liabilities if CAMS failed?

WRONG!

THE FACTS ARE:
CAMS has the financial capacity to pay all excesses as they arise.

Financial analysis completed by AON Rick Services, based on past claims history projected for the future, have identified the average amount required for excesses each year. CAMS has undertaken its financial planning accordingly.

CAMS currently has half a million dollars of dedicated reserves which is more than sufficient to meet claims excesses for the foreseeable future. Appropriate additional amounts are budgeted for each year into the future.

CAMS has other cash reserves on which it can draw if required…”

Colin, after my experience with that 1995 claim, where CAMS would not accept responsibility to Calder Park, AIR and ANDRA, I do not trust CAMS.

I do not accept that after the 2003 balance sheet, not published yet, and the projected 2004 profit giving CAMS a balance sheet asset of $3.3 million being the best that CAMS can project. Take into account that CAMS property assets is not currently available as part of any guarantee. This fact has been stated previously in CAMS document.

According to the 2002 Annual Report, the Written Down Value is $2,581.624, which includes the buildings in East Malvern, Wanneroo and Parramatta. With these buildings being in the CAMS property holdings company, when balanced off against the Total Members Equity of $2,603,157 would leave only $21,533 which is less than 1 excess claim available for the $100,000 deductible.

So Colin, I say again, I absolutely do not see how CAMS will be able to meet the obligations of the $100,000 multiples in 2004 and beyond.

Colin, you suggest that, at best, the CAMS balance sheet in 2004 will show assets of $3.3 million of which $2,581,624 is currently quarantined from being included in any guarantee. This is ordinarily good business to protect CAMS’ properties but not very promising for people you ask to rely on your CAMS guarantees to cover the $100,000 of any claim you say you will cover.

Think about CAMS’ assets even at $3.3 million then look at the capital investment of most racetracks and then appreciate how CAMS fit into motor sport.

There is the question of if the 34 or $850,000 liability of claims up to June 31st 2003, where is the provision in CAMS balance sheet for that? Further, what is the provision from Jul 1st 2003 with 2 unfortunate deaths plus a number of injuries at Phillip Island and the WA Rally accident, as well as any others that have not been reported in the newspapers? Are these claims included or will they be included in CAMS’ 2003 balance sheet? Only time and the 2003 balance sheet will tell.

Issue 6:
“… The doubts about CAMS undertaking to absorb the $100,000 excess is offered as explanation as to why Calder Park does not hold CAMS events:
… Frankly, that is why Calder Park Raceway does not, and will not, rent our venue under a CAMS permit and Public Liability Insurance…

WRONG!

THE FACTS ARE:
Calder Park is unable to “rent their venue under a CAMS permit” as Calder Park Raceway does not have a current CAMS track licence.

The withdrawal of the track licence was as a result of default on payment due to CAMS in March 2003, when the Calder Park company holding the track licence went into liquidation.
CAMS is unable to issue permits for events at venues that are not licensed by CAMS…

Yes Colin, you are correct in what you say but what you do not say is that CAMS are unable to conduct their Observed Licence Testing at Calder Park Raceway for prospective competitors but do not worry Colin, AASA are filling that gap.

Calder Park Raceway was the racetrack that promoted the AGP from 1980 to 1984 at a cost of several million dollars. Calder Park Raceway was the first and only track to hold the World Touring Car event in 1989. It was also the first track to hold truck races and super bikes. It went from an approved FIA venue to being unsafe for CAMS clubs overnight because it did not have a CAMS permit, I did have an Auscar permit.

Issue 7:
“… in relation to the new track fee structure:

… Ask yourself why the new deal from CAMS involves you paying your huge track license fee and then charge all your track renters to pay for this huge increase…

WRONG!

THE FACTS ARE:
The ‘new deal’ referred to by Jane is a dramatically improved system of track licensing and permit fee structure.

This has been developed jointly by CAMS, members of the Circuit Operators Advisory Group and others.

The combined track licence and permit costs for 2004 are consistent with the same costs in 2003, with an adjustment approximating CPI.

This reform is one of the most significant advancements in a decade…

Colin, CAMS’ track license fee increased by 70% for the year 2003. This increase was called an ‘insurance levy’ to help pay for the July 1st 2003 insurance. You know, Colin, the insurance that costs no more. The insurance you quoted that went up 100% and then when quoted you argued that the increase was only 60%.

Now the new deal for 2004 for all CAMS licensed track formulated by CAMS and COAG.

The first thing CAMS talk about is the actual increase in track license fees intended for 2002 and taking into account the backlash from promoters, was delayed to 2003. You will see in paragraph 3 of CAMS’ letter from Adam Blythe, this has been removed for 2004 fees. It then goes on to say that insurance cost has been removed from the permit and added to track licence and as such, the track license fee has been increased.

Paragraph 4 tells how a promoter can sell on for more profit, as it will all be confidential between each promoter and CAMS. Colin, are you teaching promoters snide ways of charging clubs CAMS purport to represent.

Now I say, this is an annual package from January 1st to December 31st 2004 with CAMS’ no insurance for the first $100,000 of any incident that becomes a claim, valid until the end of June 2004. So what exactly happens to the deal come July 1st 2004? Dr Rob Nethercote has stated that CAMS have no insurance from July 1st 2004 and that CAMS are working on a self-insurance deal from that date.

In any case, the current CAMS insurance is self-insurance for the first $100,000 of any incident that becomes a claim. Promoters should look carefully at what this new deal does in changing your status. It is now the promoter who sells on CAMS insurance and becomes legally responsible for this what I believe is unsatisfactory insurance.
The promoter may become responsible for his racetrack and the conduct of his events – a transfer from CAMS to you in many aspects. Promoters become responsible for the health and safety laws relating to track safety and the conduct of all matters at your racetrack. These are all areas that need professional legal advice.

The following 3 pages will give you all a glimpse of what CAMS have in store for promoters for 2004.
(RaceNews Note: This attachment can be downloaded from: http://www.racetime.com.au/racenews/...20release1.pdf

To all of you, I have given my opinion openly and honestly. I say again, all of you have accountants and auditors, check CAMS’ balance sheet. Please note that you cannot bank bull**** or black smoke and mirrors. You also cannot trust CAMS and its mega Gods of motor sport.

Sincerely,

Bob Jane
January 6th 2004

[GTRMagic]

What does that make it, 40-30 now?

[RaceTime]

I would have thought 40-15 to be honest - after reading what CAMS are about to do to track licences I think they forfeited the last point they won.

(For info - it would appear, on the surface, that CAMS are about to try and do what Motorcycling Australia did a few years ago and re=sell insurance in the form o fthe track licence. As i understand it, this is not legal and was the reason that Motorcycling Insurance Pty Ltd - think thats the correct name - was formed by MA.

Also, reading that document, it appears that CAMS only have insurance in place until June 30th 2004 - there is nothing, currently, in place from July 1st 2004. CAMS must be hoping like hell thqat there is no repeition of a Sept 11 or and major accidents in Australian Motor Sport in the next few months...)

[GTRMagic]

Just a quick question... why does CAMS have to sell insurance at all??

[RaceTime]

They don't - but it seems as if they think it is there way of still retaining income byt not appearing to put up fees.

The way they have described it in their emails, letters to tracks, if the fees go up they can blame it on the circuits.

[GTRMagic]

So they introduce AON to the circuits, and get a introduction fee/commission for their privilege. Better than getting $50k in insurance income and opening yourself up to a $100k liability if someone stubs their toe at that very same meeting

[Bigguy]

Originally posted by GTRMagic
So they introduce AON to the circuits, and get a introduction fee/commission for their privilege. Better than getting $50k in insurance income and opening yourself up to a $100k liability if someone stubs their toe at that very same meeting

Exactly, but why on earth (even aside from any apparent legal issues for CAMS about selling the insurance) would any promoter fall for that one?

This issue has really grown legs....

[pete55]

I wonder if there is enough legs for a certain Weekly publication to cover it. I don't know if they are into in depth reporting though.

[Ross Palmer]

The organization desperately needs a Mc. Kinsey type review.
From my information from messrs.Ronke,Jane and Tetley they won,t have a bar of it.
In the meantime PROCAR is caught in the crossfire trying to negotiate a"services agreement" for 2004 similar to the AVESCO agreement.
CAMS are insisting [illegally I might suggest],that we only race at venues with a CAMS track permit.
If Sandown and PI are unable to upgrade due to "safety considerations",then the only circuits available in Queensland and Victoria are AASA circuits.[If the 3 circuits in question won,t cough up,which is highly likely.
This whole thing will end up in a huge barney in the courts if CAMS do not undertake the urgent review by a Mc.Kinsey type organization.
At the very least David Tait who is responsible for organizing the insurances should stand down from the AMSC.
[Too many conflicts of interest].

[Matthew Ronke]

http://www.racetime.com.au/racenews/...20release1.pdf


I can't see how anyone even Procar, Cup Car, Mopro or circuits can put a 12 month contract in place with CAMS (ending december 04)when the major component they supply is insurance and with CAMS insurance expiring in the end of July. If you read the above link it talks about the contract between CAMS and circuit owners and also about the cover of the $100k excess. Unfortunatly CAMS must have made an omission in there contract leaving out the fact that they will infact pay the $100k excess. This will add weight to the Bob Jane argument that CAMS tried to get out of paying with the Calder claim and that another circuit is paying a portion of CAMS unissured claim at there venue. These organisations have a fidisuary obligation to there shareholder/members/associates to fully protect and manage the affiars of there orginsations and signing a short coming contract such as CAMS are suggesting with circuits and Category groups has major issue for these groups.

[Ross Palmer]

So Matthew ! The million dollar question.
WILL WINTON BE SIGNING THE CONTRACT?
If the answer is no then PROCAR needs to talk to CAMS about their restraint of trade.
Of course if you don,t sign then that would surely put your V8 SUPERCAR round in jeopardy as David Tait and his mate Tony Cochrane might force the issue about your father "Toeing the line".
I can see a visit to the ACCC coming on by a group of interested commercial interests.

[Chucky]

What is the AMSC meant to do anyway? They seem a shadowy collection of individuals who appoint their board to suit their current requirements (whatever they may be) i.e. Mr. Tait stepping in and out at his leisure.

The more I hear about his guy the more I realise he has more conflicts of interest than Eddie McGuire.

[Matthew Ronke]

Ross that question is certainly the million dollar question. There are serious issue with the contract and legal implication that come back upon any circuit that signs the agreement as Bob Jane has pointed out just a few. We at Winton have never forced any agreement upon circuit users to use CAMS or AASA despite being seriously concerned with events under CAMS and some requirements asked s by us from CAMS in regards to the VSRS & Honda Car Clubs events at Winton. This was a serious test of our faith in CAMS and something we must questions ourselves in wether we can continue under those circumstances. We wish to be able to give people the choice of AASA or CAMS at Winton in the future but it depends on wether CAMS can put an acceptable proposal together for us at Winton.

In relation to AVESCO I don’t think they will become involved in the situation. I believe you are right in regards to the ACCC. If AVESCO were to force upon anyone to use CAMS Insurance it would be a long the lines of third party forcing and a few other anti coemptive laws I believe. So AVESCO I would assume will go back to CAMS say we have a contract you fulfil your obligation and sort it out. This is what I believe Wayne Cattach told CAMS nearly 2 years ago when the issue first arrived. If CAMS had listened to Wayne then we probably would have amicable situation between CAMS and some disgruntled Race circuits. I don’t believe AVESCO would want to expose them selves legally just to do the dirt work for CAMS. The second issue is the increased fees charged by CAMS. This puts a lot of pressure on circuit operators who also have AVESCO also looking to get higher returns from sanctioning fees now competing for the same dollars. Every dollar CAMS can bargain of promoters is one less that AVESCO has the opportunity to bargain for. Therefore CAMS could put AVESCO legally in risk while they take the income that AVESCO are competing for.

Winton Round of the V8 Supercar is in July in 2004. This falls into the period of which CAMS does not have an insurance policy for. We might be facing a situation were CAMS are unable to find insurance at all in a difficult insurance market. This could have serious repercussions on both yourself (Procar) & AVESCO. If all are contracted to run under CAMS and there is no insurance or substandard insurance then if there is a claim then either the circuit or CAMS or (AVESCO/PROCAR) would have to pay. It then would be a matter of ability to pay. With CAMS as Bob Jane points out quarantining there Assets it would be down to AVESCO/PROCAR or the circuits. At some circuits such as Clipsal 500 & Eastern Creek (NSW Gov) they would see them as having a greater ability to pay. At most other circuits I would suggest that the lawyers would see AVESCO & PROCAR as having a greater ability to pay. As Bob Jane has suggested has happened to him for $18.7 Million.

Ross these are all serious issued to be addressed before any contracts could or should be signed.

[mjt57]

Originally posted by Ross Palmer
CAMS are insisting [illegally I might suggest],that we only race at venues with a CAMS track permit.

Yep, most likely contravenes the Trade Practices Act. In much the same way as it would if a contract forced a driver not to race Procar and only V8 touring cars.

What about Phillip Island? Is it not available due to this issue?

What's to stop a track holding more than one permit? And what legal requirements are there for tracks to have "permits" anyway?

[MattV]

Ross - A McKinsey type review??? Having been involved in two of these (Victorian WorkCover, NSW WorkCover) I see it as a money sucking waste of time. Yes some good points were raised but realistically the implementation of all the recomendations will never occur.

In order to avoid the skyrocketing premiums the answer would be a captive insurer, set up in the British Virgin Isles. Charge each venue/promoter a fee and have a $100 thou deductible. (I know that this is what Bob is complaining about but at least in NSW the ability to access P/L is becoming extremely restricted) (Also if motor racing can be classed as entertainment then current conversation suggests that it would not be covered - though I fail to see this getting through state parliment).

The question is whether CAMS has the cash resources to set up the captive insurer. I know that you can buy into a captive however this has associated expenses.

[GTRMagic]

CAMS Limited should not be involved in insurance. It is as simple as that.

[MattV]

Continued...

This means that the "premiums" paid by the venues/promoters stay with CAMS. They are only whittled away when there is a claim. These can they be invested by CAMS and a profit made, hence lowering the cost to the promoters/venues in future years.

There are some good people around who I know could assist with the above if CAMS decided it was appropriate.

Further If a conglomerate of venues/promoters were interested in their own insurance and wanted to check out the cost asosciated with this, as opposed to conventional insurance, let me know.

Cheers
Matt V

[RaceTime]

Originally posted by mjt57
What's to stop a track holding more than one permit? And what legal requirements are there for tracks to have "permits" anyway?

Nothing - Wakefield Park already operates in this manner and, I believe Hidden Valley (well they operate with both CAMS and non-CAMS insurance - not 100% sure who sanctiones the events run during the year that aren't CAMS - might simply be the NTMSC)

[PVDA]

Originally posted by pete55
I wonder if there is enough legs for a certain Weekly publication to cover it. I don't know if they are into in depth reporting though.

AVESCO Action would never touch this unless it was good for V8's and would get a few more people buying a copy.

[pete55]

Well Paul, it doesn't look like it was going to sell more copies and it must not be good news for V8 Supercars. I made the stupid mistake of buying the piece of **** today, only because i didn't have time to browse it at the newsagents. Surely the mag can't get any worse than this issue.

[RaceTime]

Sure it can - just wait....

[Crash Test]

Oh Pete, every week is definately the worst issue ever... why bother reading it in the newsagents?

[pete55]

Yep Crash, i think i'm wasting my time. I'm not going to do it anymore. No more comments from me about Auto Fiction because i won't know what the f... you're talking about.

[pete55]

Oh, by the way, i'm waiting for Ross Palmers mag to come out. That should be heaps better.