Maurice Blackburn In The Box Seat
Western Victoria MP Bev McArthur has condemned the passage through Parliament of the Labor Government’s Justice Legislation Miscellaneous Amendments Bill 2019. The legislation will allow law firms to charge contingency fees in class action lawsuits.
Mrs McArthur said: “This is a bad day for victims, business, and a bad day for the integrity of the Victorian legal system.” It overturns a 200 year tradition in the justice system where fees have traditionally been calculated on work done by the law firm not on a commission basis of the payout to victims.
“This new law is anti-victim, anti-plaintiff, anti-justice and anti-business, and its creation shows exactly who pulls the strings of the Andrews Government.”
In her speech to the Victorian Legislative Council, Mrs McArthur noted that law firm Maurice Blackburn are the largest non-union donor to the Victorian Labor Party, having given $122,887 last year.
They are also the largest filer of class action lawsuits in Australia. Former Labor Premier Steve Bracks is now administrator of the Victorian branch of the ALP, and Chair of the Board of Maurice Blackburn.
She said: “Contingency fees are currently banned in all Australian jurisdictions, and until now lawyers have only been able to charge for hours they actually work.”
“In giving lawyers a share of the pot, regardless of the expense of the actual work done, they may be perversely incentivised to settle cases early, at the expense of their clients.”
“I’m worried for businesses too: permitting contingency fee cases will provide financial incentives for lawyers to explore claims at the margin of quality and merit.”
“Victoria will become the honeypot for class action law in Australia, the home of an Americanised legal culture which encourages anyone and everyone to sue each other senseless.”
The Bill will also allow contingency fees to be charged on an ‘opt out basis’ which effectively permits lawyers to bring a class action on behalf of people without their knowledge, and charge them a contingency fee without their consent.
This, despite a High Court ruling in December 2019 against the use of Common Fund Orders which operate on the same principle, and the Federal Government’s subsequent announcement that it would press ahead with an inquiry into class-action proceedings.
Mrs McArthur said that the bill will “reduce the damages going to victims most wronged in our community” which will “not improve access to justice, but will guarantee access to excessive fees.”
She highlighted the example of the Black Saturday bushfire victims. Had Maurice Blackburn charged a 35% contingency fee in their class action lawsuit, it is estimated that they would have taken an additional $170 million of the settlement.
“The Government completely failed to make the case for this legislation in Parliament.”
“Their rejection of the Coalition amendment, which would have guaranteed a 65% payout to victims of damages awarded; gives lie to the idea this change was designed to help anyone other than class action law firms.”
“The Minister’s complete inability to answer even the simplest question on her Governments’ legislation during debate was an embarrassment. You might be tempted to ask who actually wrote the legislation”
"At a time of massive unemployment due to pandemic shut down of the economy, the Government is asking the private sector to employ people, while at every opportunity putting obstacles in their path.
This bill is not about ‘fighting for fair’ but rather ‘fighting for increased fees’ for Labor’s biggest donor. "
20 June 2020