11 March Report
Below is the content of the letter handed to the Managing Partner of Maurice Blackburn (MB) and the Executive Director of IMF at today's information meeting at Chelmer. When IMF refused to extend the 21-day cooling off period to 31 May, to enable folk to compare alternate Class Actions, I handed out copies of the letter to those who attended the MB/IMF meeting at Chelmer and Wacol:
Dear Rod and John,
Having attended every session of the Commission of Inquiry into the flood, I have tried to assist you, and the other Class Action litigators, to develop the case for prosecuting the Queensland Government for its negligent flooding of businesses and households in January 2012, by:
· Providing your Senior Counsel with three questions that could have exposed hydrologist Babister’s incompetence, but which were not asked, thus missing an opportunity to significantly influence the Inquiry’s findings.
· At my expense travelling to Sydney to meet you John, and Damian Scattini because Damian could not meet me in Brisbane, for reasons you know.
· Providing you with contact details for a London based internationally respected consulting firm of hydrologists and dam experts.
· Helping you understand that the case could be considerably reduced in time and cost if it can be shown, and I believe it can, that there would have been no flood if W3 had been engaged from 5 January 2011, when the BOM warning should have been used to choose a flood mitigation strategy.
· Because Class Actions in Queensland are unchartered waters, providing you with evidence of how the case could be brought within the jurisdiction of the Federal Court.
· Pointing out to John and Damian on 25 February 2012, that your FAQ no.17 was causing consternation; “If you want to join the action…sign…no later than 12 March 2012...”
· Pointing out to your partner Peter Koutsoukis on 29 February that this pressure to sign up could be used by those who do sign as misrepresentation; that if they did not sign by then they would miss out, and that such misrepresentation could vitiate your contract. Worse, it has given Maurice Blackburn the image of being a used car salesman – the description someone else said to me.
· Pointing out to Peter on 29 February, John’s statement on 25 February at Fig Tree Pocket that claimants might have to pay an adverse costs order if IMF could not afford to do so. Peter clarified that IMF had insurance cover for an adverse costs order, but did not clarify that it would not attract the 20% Project Management Fee until too late for my 2 March Report to those flood affected.
· Pointing out to Peter on 29 February that your contract defines the flood event as that occurring to 12 January 2011, whereas flooding occurred to 13 January.
· Pointing out to Peter on 29 February that the Standard Lawyers Terms clause 4.1 referred to the IMF Agreement clause 5.5, whereas that should have referred to the IMF Agreement clause 13.7.
You do not seem to appreciate that FABAH continues to try and ensure that those who are flood affected are presented with all the facts of the various Class Action possibilities, and will not be recommending one against the others, but will be comparing and contrasting them as details emerge. I urge you to assist this dissemination of understanding by providing me with answers, not with refusal or obfuscation, and not by refusing me the opportunity to ask questions at public meetings, following IMF’s invitation for me to attend these meetings to ask questions.
As one who was flooded and has incurred repairs of about $100,000 and lost land value of about $120,000, I am keen to know what you are offering, and have a number of concerns that I want answered.
On 5 March I requested;
A copy of the insurance policy and premium applicable to the Wivenhoe Class Action. Having audited a number of Sydney’s major insurers, I was the Secretary of a top 20 listed public company whose main operating subsidiary was a general insurer, so I am able to understand complex professional indemnity and loss of profits insurance policies, and re-insurance.
Justification for the assertion that all claimants need protection from an adverse costs order, and
Justification for the 30% IMF commission.
To date, none of these have been supplied.
As you know, my 9 March Report to those flooded has drawn attention to the history that a Class Action by those impacted by a major disaster, has never resulted in an award of adverse costs, and moreover an independent solicitor has advised me that a Court would never require surety for such costs as that could prevent those damaged seeking justice.
However, a Court may require a surety, and impose an adverse costs order, if IMF is involved, as the claim then is tainted by IMF’s profit motive, subsuming Maurice Blackburn’s legal role of protecting victims. Thus, the need for a surety, and adverse costs insurance, arise only because of IMF’s involvement, for which they will take 30% of everyone’s claims. No value is added, but a huge slice of folks’ recovery money is taken. That is unconscionable.
While you have asserted that IMF provides needed funding for such a large action, that misrepresents that if Maurice Blackburn is sufficiently sure of winning a ‘no win no fee’ case, it will be able to arrange bank finance at a competitive interest rate. One such bank would be Suncorp, who are well able to evaluate the quality and risk of Maurice Blackburn’s case. It could provide a commonality of interests in a Class Action. However, if Maurice Blackburn is not sufficiently confident of winning a ‘no win no fee’ case, it has no role in helping flood victims.
Slater & Gordon, who have successfully represented in many large Class Actions on a ‘no win no fee’ basis, is prepared to so act without a funder, and the insurance companies are considering their own class action, but all are waiting for the Inquiry’s final report, and then will probably wait to assess the next government’s intentions to compensate those flood affected. Slater & Gordon’s potential Class Action claimants are the same folk that you are seeking to sign up, before the Inquiry report is handed down. Please recall the Judge’s criticism in the Victorian bushfires Royal Commission of Inquiry, of solicitors (MB) who commenced a Class Action before that Inquiry report was handed down.
You have however asserted that you are the only litigants able to provide the needed surety and protection against adverse costs. I point out that these two assertions are also deceptive conduct, intended to misrepresent the claimants’ risks. I say this as one who without legal representation successfully prosecuted in the Supreme Court, an agency of the Federal Government for deceptive conduct under the Trade Practices Act.
After yesterday’s meeting at Fernvale, someone who thinks they may have signed up without appreciating the gravity of their commitment, before other Class Action possibilities are known, has asked my advice. I have suggested they withdraw within the 21 days’ cooling off period, otherwise they will be stuck with a contract that they may regret; but that when all alternatives are known – not likely before the end of April – he could re-commit to your Class Action, if that then appears the best alternative.
As he was unsure whether the 21-day cooling off period had yet expired, I pointed out to him that if it had, he could resort to withdrawing by reliance on the misrepresentations of which I am aware. They are intimidated by your process, and as they are unable to write the letter of withdrawal, have asked me to draft it for them.
Please recognise that you are putting your profit motive way ahead of helping those that desperately need legal assistance. I suggest you today publicly announce that all who sign before 1 May will be granted a cooling-off period to 31 May 2012. If you do not do this I will refer this letter to the Law Council and to the media.
Yours very sincerely,
David Stark
Secretary of FABAH
The Flood Affected Businesses and Households Association
