The Chief Justice of the Federal Court has criticised a national firm for an “excessive level of human resources” applied to a stolen wages class action in the Northern Territory, which has reached a $180 million settlement.
In her 146-page judgment delivered on Thursday, Chief Justice Mortimer said Shine Lawyers applied those staff “in a way which was not conducive to the most effective and efficient conduct of the proceeding”, in assessing whether the costs of the class action were fair and reasonable.
The proceeding was conducted by Shine, on behalf of Aboriginal workers in the NT who were under paid or not paid between 1933 and 1971. Lead claimant Minnie McDonald filed the application in 2021 on behalf of workers at sites including pastoral stations, private workplaces, Aboriginal institutions and missions, and government-run stations or settlements.
Chief Justice Mortimer said Shine had not used the most “logistically and culturally appropriate and cost-effective methods” for its outreach program and registration process to sign eligible group members.
“It ran the proceeding out of its Brisbane office which, because of the model it decided to use in securing registrations through the proceeding as it went, meant considerable travel costs, and time costs for the staff involved,” she said.
A cost referee found the case had engaged 131 fee-earners, an “unusually high number”, when it could have used local expertise for a fraction of the cost.
“The entire proceeding has been conducted on the basis that Shine will be able to take from any settlement fund enormous amounts of money on account of its legal costs…” Chief Justice Mortimer said.
Litigation funder LLS Fund Services will receive $30 million from the settlement. The Commonwealth will pay Shine up to $15 million, plus about $6 million to administrators and $1 million to a costs assessor.
Chief Justice Mortimer rejected an argument from Shine and LLS that they should be paid in full before registered group members.
Interim payments of $10,000 will be made to about 1000 workers. There are an estimated 6000 to 8750 eligible claimants, with outreach and registration sessions to be held in 114 NT communities by 31 August.
“It would not be surprising if potential eligible claimants observing the proceedings gained the impression the proceeding was little more than a money-making exercise for others,” Chief Justice Mortimer said.
“High-minded but no doubt sincere expressions of desire to right the wrongs of the past can rightly be held up for scrutiny next to the details of these settlements, and who profits the most in absolute terms from them.
“The same scepticism and loss of public confidence in the court’s processes is at risk where it is the group members who are the last to be paid.”
Chief Justice Mortimer said the settlement did not have to be “perfect or generous”, but fair and reasonable, and the compensation amount for an individual may not seem very large.
“The court understands the strong sense of injustice and unfairness that is felt in Northern Territory communities about the way Aboriginal and Torres Strait Islander people were treated when they worked during this period, often in terrible conditions and while suffering a number of other deprivations and restrictions,” she said.
“However, the overall settlement is what the court has to focus on, as well as the court’s assessment that a positive outcome at a trial was very uncertain and risky, and would have probably taken many, many years to get through the whole court process, including appeals.”
She said the issues had many layers of complexity and the court had a responsibility not to perpetuate that complexity more than was necessary.
“The irony, and the matter which needs to change in these kinds of proceedings, is that the complexity arises almost entirely because of the arguments brought to the Court by Shine and the funder, about how much money they should receive because of the settlement of this proceeding, and when and how they receive it.”
A settlement deed was executed in August 2024, and three months later, the court appointed amici curiae on the question of Shine’s costs and disbursements and amount sought by LLS.
The assessment focused on Shine having its own staff conduct the outreach and registration program instead of locally based organisations; charging an hourly rate, and charging an uplift fee.
It found tasks which had been categorised and charged as “law functions” were logistical or administrative in nature, and so the rates charged were “excessive”. It also found it would have been more suitable and appropriate for the work to have been conducted by local Aboriginal organisations.
In her summary of findings, Chief Justice Mortimer considered that Shine “adopted an unnecessarily expensive and resource-intensive process for its book build program and the start of the registration process”.
“Shine adopted this model and method without any apparent reflection on whether group members might be registered more quickly, efficiently and effectively if they were being approached by organisations and people they were already familiar with, organisations staffed by people who work with their communities and in whom group members may already have a level of trust,” she said.
“The organisation and logistical requirements … such as the ‘significant’ work undertaken to identify towns and communities and ‘extensive research’ about population sizes in communities may have been unnecessary, or significantly reduced had Shine partnered or collaborated at a much earlier stage in the proceeding with local organisations with that existing knowledge and expertise.
“The enormous amounts of money Shine contends are required to conduct this process could have been injected, as disbursements, into First Nations communities and the regional organisations that serve them. These organisations have well-established expertise in serving these communities.”
Chief Justice Mortimer found it was probable that local Aboriginal organisations could have undertaken the work conducted for “well under $1 million and possibly closer to $500,000”.
“Just as critically, an organisation such as this does not need to provide any ‘training’ to those who will participate in the registration process. They will require some information about the proceeding and registration form but will have all the necessary skills and experience, and they have ‘on the ground’ familiarity with the communities they are dealing with,” she said.
She said though she had been critical of Shine and LLS, she did not doubt the genuineness of their desire to secure positive outcomes for group members.
“Nevertheless, the pursuit of the business model has, in my respectful opinion, at times overshadowed these good intentions,” she said.
“It seems to me a not inconsiderable number of people in Aboriginal and Torres Strait Islander communities in the Northern Territory would look at the figures being paid to the lawyers and to the funder, indeed even to the administrator and the costs assessor, and then look at what their family members are getting at an individual level, and they would be frustrated, and likely mystified about how city-based, non-indigenous participants in this proceeding come out with so much money compared to their family and friends.
“I doubt they would see much social justice in this outcome. That may well be compounded because of the way the outreach program has been conducted, with groups of city-based lawyers visiting towns and communities, trying to engage with people, perhaps on the first time they have ever met them, on very distressing matters, and leaving again.”
Chief Justice Mortimer made a range of orders including that the parties confer about proposed orders.
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