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Court rejects expert’s criticism of ‘exorbitant’ class action fees
When approving costs for a Victorian law firm that ran a successful bushfire class action across the country, a Supreme Court rejected criticisms from an expert that its fees were “exorbitant”.
Naomi Neilson
A total of $780,000 from the $2.25 million settlement approved in the Yorketown bushfire class action will be paid to Maddens Lawyers after the South Australian Supreme Court found the fees for interstate lawyers, workload, and the uplift were “fair and reasonable”.
The fire tore through around 5,000 hectares of land and either damaged or destroyed a number of houses in its path.
While originally set to receive 57 per cent of their assessed losses, group members will now be entitled to 60 per cent following the Supreme Court’s approval of the $780,000 in legal costs.
Under a clause in its cost assessment, Maddens will receive a 25 per cent uplift on professional fees to take into account the risks of running the class action on a conditional basis.
Costs assessor Catherine Dealehr from the Australian Legal Costing Group assessed Maddens’ costs to be $945,293.50 and concluded its request for $780,000 in legal costs and disbursements, including the 25 per cent uplift, was “fair, reasonable and proportionate”.
In a separate report, Arnold Costs Solicitors expert Graeme Arnold assessed the costs to be in the range of $507,922 and $620,749.
Maddens submitted there were a “number of problems” with this report and asked the court not to rely on it.
Mr Arnold reached the conclusion that professional fees were “inflated”, that the total number of hours worked “was very high”, and time spent in the discovery period was “excessive”.
The expert also reached the view that Maddens decision to use Victorian lawyers, which he said charged 15 per cent more than lawyers in South Australia, was not justified.
Maddens said this report “lacks cogent reasoning and is imprecise”.
The court did not accept the criticisms made in Mr Arnold’s report.
“I note Mr Arnold’s comments that he had a general impression of inefficiency. I do not consider that this statement is supported by the balance of his report,” the court found in the judgment.
“I do not accept the criticisms that he made with respect to the time spent by Maddens on reviewing discovery and expert reports; until they have been properly reviewed, it is impossible to know which parts are relevant and which are not.”
Referring to Maddens’ decision to use lawyers from Victoria, the court said that while it is unable to reach a view that no firm in South Australia has the same amount of experience as Maddens in bushfire class actions, “I consider that it is understandable”.
The court found Maddens’ “significant body of experience in bushfire class action litigation” made it reasonable to hire Victorian lawyers.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
