Tag: class action

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Class Action – payment to the class rep ?

The scheme provides for payment to the class representative. For example, in Johnston v Endeavour Energy [2016] NSWSC 1132 it amounted to $25,000. This payment is intended to compensate the representative for their time, inconvenience and burden associated with taking on and discharging the obligations of lead plaintiff in attending to matters on behalf of group members.

The appropriateness of compensating class representatives was established in Darwalla Milling Co Pty Ltd v F Hoffman-La Roche & Ors Ltd (No 2) [2006] FCA 1388; 236 ALR 322 where Jessup J recognised that he was dealing with a then novel request for payment outside the normal categories allowed in litigation. His Honour held that it was:

“76 … prima facie reasonable that particular parties who have sacrificed valuable time and incurred expenses in the interests of prosecuting [a] proceeding on behalf of group members as a whole should be able to look to the corpus of the settlement sum for some degree of compensation and reimbursement. More importantly, perhaps, I would hold that group members who have benefited from the proceeding could not be heard to deny the reasonableness of such a proposition.”

The circumstances of the case dicate the quantum of payment. in Johnston v Endeavour Energy [2016] NSWSC 1132 there were 54 personal injury (PI) claims!

You be the judge. Was $25,000 fair. I suspect so.

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Class Actions – lawyers costs – the proper approach

In Johnston v Endeavour Energy [2016] NSWSC 1132 Hoeben CJ summarised the proper approach to the task of evaluating the overall reasonableness of a proposed costs deduction from a class action settlement.

The applicable principles have recently been set out by Osborne JA in Matthews. In Courtney v Medtel Pty Limited (No 5) [2004] 212 ALR 311; FCA 1406 at [61] (Medtel) (Sackville J) described his expectation as to the content of the material to be provided to the Court:

“61   It is for the reasons I have given that I suggested to [the applicant] that evidence should be presented from an independent solicitor or costs consultant, directed to the following matters:

(i)    the reasonableness of the terms of the fee and retainer agreements (including the provisions for ancillary services, interest and an uplift factor);

(ii)    whether the fees and disbursements actually charged by the Solicitors have been calculated in accordance with the fee and retainer agreement;

(iii)    confirming that, so far as the solicitor or costs consultant can determine, no significant portion of the fees and disbursements charged by the Solicitors have been inappropriately or unnecessarily incurred in conducting the proceedings on behalf of Mr Courtney and the represented group.

I made it clear that I did not expect the evidence to involve an exhaustive review of the files maintained by the Solicitors. I had in mind an overview that could be undertaken over a period of about two days.”