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Maurice Blackburn secures ‘troubling’ $15m administrator bill
Following seven years of “considerable” work to distribute a $250 million settlement, Maurice Blackburn has convinced a court to grant it an additional $10 million over the predicted administration costs.
Naomi Neilson
Despite an original estimate of just over $5 million, Maurice Blackburn asked the court to approve a total administrator’s cost of $15,882,822.74 for distributing a settlement reached between its clients, DePuy International and Johnson & Johnson Medical.
While Shine Lawyers had originally been a joint administrator, the Federal Court granted Maurice Blackburn’s application to have them removed. Shine did not contest this application.
At the time of the June 2016 settlement, actuary Geoff Atkins estimated the administration costs over the entire lifetime of the settlement scheme would be approximately $5.85 million.
However, in a subsequent letter, Mr Atkins admitted the estimation was “broad-brushed” and was not “based on any business plans or budgets provided by Maurice Blackburn”, so it cannot be known with certainty the nature of the costs that would have been incurred.
Given the settlement had been approved with this estimate in mind, Justice Michael Wigney said the new figure was “troubling” during an interlocutory application heard earlier this month.
“The actuarial advice provided by Mr Atkins to the administrators and ultimately to the court was an important consideration in respect of the approval of the settlement,” Justice Wigney said.
Appearing at the hearing, DePuy International and Johnson & Johnson said given the administrative costs have “turned out to be significantly higher” than the amount budgeted for at the time of the settlement, the court should consider applying a discount.
The respondents added that although there was evidence from the firm about the work done on the settlement scheme, “they have not adequately explained that significant costs overrun”.
Although Justice Wigney accepted the new costs were “very large indeed”, the “considerable work” done by the firm justified the costs.
As part of the settlement scheme, Maurice Blackburn was required to assess the credibility of all applicants. By the time of the February hearing, more than 1,630 applicants had received compensation.
While the majority opted for the “fast-track resolution”, which entitled them to between $55,000 and $110,000, others were to be assessed individually. Often, this required speaking to family and guardians.
Based on this evidence, Justice Wigney determined the administrators “properly and reasonably carried out the work”.
Turning to whether there should be a discount, Justice Wigney said that while it was appropriate for the respondents to raise their concerns, “I am ultimately not satisfied that there is any proper basis for disallowing or discounting the fees”.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
