Comment by: David Morrison
THE 2011 Queensland floods and the ensuing litigation inquiries provide further evidence that class actions are now a part of our legal landscape.
Firms take on these large cases provided they get enough households and are likely to be successful.
Maurice Blackburn determined that there were reasonable prospects of recovery and commissioned an expert report.
The report apparently shows flooding was worse than it ought to have been if the dams were soundly managed.
While there is no shortage of Queensland homes that were flooded, one key question is whether enough claimants from the areas flooded due to mismanagement will sign up.
Class actions are often funded by separate businesses in large-scale legal actions. IMF is the largest funder of litigation in Australia, and part of a growing and profitable class-action industry.
In an ASX release yesterday, IMF said the experts believed "Wivenhoe was not operated to the standard expected of a reasonably competent dam operator in all of the circumstances".
Not all affected Queenslanders will necessarily be able to become claimants.
In the event there is a successful outcome, not all claimants will recover money.
Right now the key to the litigation is identifying those Queenslanders whose damage was avoidable by sound flood management.
Potential claimants ought to recognise that Maurice Blackburn has a business relationship with IMF. IMF will be looking to make money.
While the agreement with the client is commercial, the lawyer's relationship with the client is one of trust. This requires them to act in the client's best interests.
Maurice Blackburn might be required to make decisions that conflict between IMF and flood victims.
Depending upon the circumstances, if the class action proceeds, the client has nothing to lose by fighting to the bitter end, even if a settlement is offered along the way.
The lawyer, however, might prefer the settlement because it ensures a result and payment.
Queenslanders ought also to ask whether the dispute might be resolved faster and more equitably by a process of dispute resolution, rather than protracted legal proceedings.
If dispute resolution is a possibility then claimants ought to ask whether they are better or worse off than if the matter is pursued with litigation.
If the matter goes to court, claimants might be interested in the basis upon which the lawyer is paid.
IMF wants legal action; Queenslanders just want to move on.
Dr David Morrison is an associate professor at the University of Queensland's T.C. Beirne School of Law.
22.1.13
