Virus? What Virus?
Victorian Premier Dan Andrews has placed a dubious legal reform in front of the medical crisis that is preoccupying every other politician in the world. By James Mathias.
While governments around the nation and the world focused on ways to fight potentially the biggest global medical crisis since the Spanish Flu a century ago, the Daniel Andrews Labor Government in Victoria had other priorities.
Ahead of Bills to immunise frontline doctors, nurses and paramedics against flu, the state Government listed in the parliamentary schedule its own Bill to allow law firms like Maurice Blackburn to charge US-style commissions for personal injury cases and class actions.
“If this scheme goes ahead, amid the growing COVID-19 pandemic, it will be the best evidence that Premier Daniel Andrews’s government places the interests of plaintiff law firms ahead of all other considerations,” wrote The Australian’s legal affairs reporter Chris Merritt.
Maurice Blackburn is the third largest donor to the Labor Party.
The Victorian Government has still not announced any form of business support or economic stimulus for the state in response to the COVID-19 virus.
The state Opposition on Tuesday persuaded the Government to move the Bill to third on the notice paper.
The media campaign against this bill has intensified recently as community opposition continues to grow.
Law Council of Australia president Pauline Wright said the Law Council was opposed to the Bill. “I am a passionate advocate of promoting access to justice, but I do not accept that contingency fees will promote that objective,” she said.
She added further that, “in most jurisdictions in Australia a ‘no-win-no-fee’ arrangement is available that enables civil claims matters to be taken on for clients without deep pockets and matters that merit litigation in the public interest.”
Federal Attorney-General Christian Porter said he would ask the Parliamentary Joint Committee on Corporations and Financial Services to inquire into the entire class action industry, including the impact of Victoria moving to abolish the long-held prohibition on lawyers being able to charge these commissions.
As the pressure continued to mount on the Andrews Government, law firm Herbert Smith Freehills provided a stakeholder briefing on class action myths and facts that uncovered some staggering statistics. It showed that the average distribution of settlement proceeds paid to victims had decreased from 59 per cent of damages awarded in 2016 to just 39 per cent in 2019, whilst at the same time the fees paid to law firms increased by 11 per cent. The commission that litigation funders took increased also – from 15 per cent to almost a quarter.
When residents in Williamtown (NSW), Oakey (Queensland) and Katherine (Northern Territory) sued the Defence Department for contaminating their homes with toxic firefighting chemicals, their law firm, Omni Bridgeway, made a $51.5 million profit, as Richard Guilliatt reported in The Weekend Australian last week.
After all costs are considered, Omni Bridgeway will take a total of almost $75 million, or 35 per cent of the total payout. The rest will need to be shared between a lot of claimants. There are more than 500 claimants in Williamtown alone. Some told Guilliatt that the payout would not compensate for the loss of value in their home.
The Herbert Smith Freehills presentation showed how much the industry has changed in the past 27 years. For the first 13.5 years of that period, there were 47 class actions related to product liability and just eight from shareholders. In the second 13.5 years the number of shareholder actions jumped by 1,237 per cent whilst the number of liability claims dropped by more than a third.
Allowing lawyers to charge commissions will only make these trends worse, Tim Game pointed out in The Australian last week. “The practice of law is and should remain a profession driven by ethics, not a business driven by profit,” he said.
By Thursday it was clear that the pressure on the Labor party to drop this legislation had become too much and at 3.57pm they voted to debate it at another time. It was a win for common sense, and exposed Labor’s preference to focus on its lawyer mates instead of the critical concerns of Victorians.