Dealing with greedy lawyers who are crooks

1

This is a story of events of the kind that a great Dutch historian, writing of medieval Europe, described as ‘vehement pathos’ and ‘proud and cruel publicity’.

Banksia was a company involved in accepting money invested in it in return for the security of debentures and then lending that money out to borrowers in return for the security of mortgages.  It collapsed in October 2012 – nine years ago.  It owed $663M to its debenture holders, many of whom were elderly people in rural Victoria.  The mortgagors owed Banksia $527M.  There was therefore plenty of room for salvage – provided the mortgages in fact gave security. 

Entrepreneurial lawyers went to Kyabram in rural Victoria to start an action for the investors.  So began oceans of litigious controversy that still rage – although two key lawyers driving the original claim confessed in August 2020 to fraud and lost their tickets to practise law. 

When you get sued by old people in the bush who have been taken for a ride, you find yourself kicking into a stiff breeze – which becomes a gale when bent lawyers surface. (As a rough guide, try acting for a bank seeking to evict a widow before Christmas.)  But there is no point in the victims’ beating their culprits to pulp if there is nothing in the till at the other end.

Those who think that lawyers are not concerned with the merits, or that judges have no emotion, do not know what they are talking about.  And parts of the press are full of them. 

2

After more than fifty years in practice, I can state my views on practising law shortly. 

We have made a mess of the law – a really bad mess.  On the substantive law, government is equally to blame.  The statutes just get longer and murkier.  And laws passed outside parliament are more prone to express what some Germans call the ‘will’ of the ‘State’ – as in the responses to the pandemic. 

But on procedural issues – what happens in courts and tribunals – the mess is nearly all down to us.  We used to complain that government did not provide enough judges.  But those days are past.  We must first get our own act together.  We are the ones who are responsible for the way people get to resolve their disputes – either between themselves or with their government. 

It is therefore no mere fiction to say that lawyers are officers of the courts or tribunals.  We have duties over and above those we have to our clients.  That can of course give rise to tension – but it is for the most part manageable.

In the result, our job is clear.  It is to put our clients into the revolving door of what Sir Owen Dixon called ‘the judgment hall’ at one end and get them out at the other end as soon as we decently can, and with as little mud on their face and as small a hole in their pocket as possible.

And that obligation sits most squarely on the judges for what happens in their courts and on those presiding over tribunals.  It was the judges who made the common law after hearing the arguments of counsel.  It is the judges who are responsible for providing a fair trial for those who are before them.  And a fair trial is in my view one that seeks to achieve the objective that I have set out above.

As it happens, that objective is firmly reflected in a famous clause of our first statute – which is still part of the law of Victoria.  In clause 40 of Magna Carta, the Crown gave an undertaking in the royal plural: ‘To none will we sell, to none will we deny or delay right and justice.’  What could be simpler?

3

Now, in considering the ban on selling justice, we need to recall that for the most part lawyers are paid for the part they play.  At the time of Magna Carta, people were divided into three classes – those who fought, those who prayed, and those who worked – but someone had to put food on the table for the first two.  (And it was a great achievement for the lawyers whose profession began to emerge then that they destroyed the monopoly of intellect previously claimed by the clergy.)

There will inevitably be some tension is squaring the need of lawyers to be paid with the professional obligations imposed on them as set out above.  It is the same for doctors – and in other professions.  It is just a fact of life, and I know of no ground for suggesting that we get more rotten apples from lawyers than from, say, doctors, police, or others in government. 

And lawyers know that if they misbehave and get caught, they will be dealt with very sternly, because they hold positions of trust, and breaches of trust attract much harder penalties than breaches of contract or mere carelessness.

4

In the thirty or so years during which I presided over civil tribunals, I sought to keep before me the objectives I have set out above.  In doing so, I tried to learn from the astounding record of Lord Mansfield. 

I know of no finer trial judge.  Lord Mansfield was Lord Chief Justice for 32 years.  His Lordship regularly cleared his whole list.  He did so by the unflinching control he kept over his cases.  Mansfield saw that delays in the law are not for the most part caused by litigants, but by their lawyers, and by clients who do not have a reasonable case.  His job was to keep those delays to a minimum. 

Mansfield well knew why lawyers engage in delay.  One of his biographers says ‘One of the duties of the court is to protect the litigants from their own legal advisers.’  (If it matters, that biographer was a Master in Chancery – and presumably not therefore some ‘activist’ or ‘radical’ or some other undesirable who gives the shivers to the Murdoch press.)  We cannot now believe the number of cases Mansfield disposed of each year.  Mansfield told Boswell that he decided about seven hundred causes a year, and the vast researches of Professor Oldham of Georgetown University are consistent with that figure. 

Above all, Mansfield understood that the ‘symptom of judicial anaemia was the congestion of litigation’ and that ‘the law was to be justified to the litigant.’

5

The decision in Banksiawas an exercise in protecting litigants from their own legal advisers.  How does it measure up in that endeavour against the issues I have referred to above?

As indicated, the case involved an award of very large legal fees and commission to those involved in funding and fighting a large claim that concluded in a settlement of $64 million – legal fees of about $5 million and commission of about $14 million.

Such a case would have been impossible when I started more than fifty years ago.  There are obviously problems of conflicts of interest in allowing lawyers to have a slice of the action.  Those problems get more serious when a trading company is involved in funding the action.  There is a head on collision between the paramount drive for profit in capitalism and the refined doctrines of equity about the high obligations of good faith imposed on those who hold positions of trust.  Things were even worse here because lawyers held a stake in the funder – about which they dissembled. 

6

But all these niceties went clean out the window when the evidence revealed that the lawyers were seeking to obtain financial gain by deception.  That’s called theft. 

To allow these issues to be aired fully, the court had appointed lawyers to make the case against those claiming the millions.  The office has the quaint name of Contradictor, and it resembles the role of counsel assisting in a royal commission.

Most of this is utterly foreign to me.  You may as well be talking about standards of conduct in the Kasbah in Tangiers or Morocco.  But two things come to mind.  First, we at the Bar have always been used to contingent fees – as a matter of fact.  If you are acting for a worker injured at work, you do not get paid unless you get it from the employer by settlement or verdict.  There the facts of life, and common decency, trump high doctrine. 

And if you go to Harvard to learn about class actions, the first thing that the lecturer tells sceptical lawyers from other places is that many of the movements in human rights in the US have come from this kind of process.  (That has not happened here because although the English Bill of Rights is still part of our law, we have not entrenched it so that it can be sued on – for which relief, much thanks.)

7

The Banksia hearing on costs and commission took place over 35 sitting days in and between July 2020 and March 2021.  There were three plaintiffs, including the Contradictor, and seven defendants.  There were eight law firms – and not small ones – involved, and at one time or other eighteen members of the Bar were in court.  So, for about 35 sitting days, more than twenty lawyers were hard at it.  The hearing was I gather streamed live and avidly followed by a lot of underemployed lawyers.  It was, I am told, high theatre – although I doubt whether the affected elderly around Rochester and Tongala would have been glued to their screens.

At one time or other, eight silks appeared.  My clerk tells me the range of fees for silks in such a case is currently between about $10,000 and $20,000 a day, and about $3000 to $5000 for junior counsel.  So, let’s put two counsel down for, say, $20,000 a day between them for each party.  (The press says Brett Walker charges $25,000 a day.  My understanding is that he is not alone, and that that figure may be light.  Institutions like BHP and the Vatican can afford those fees, plus rich people like Clive Palmer – who is very quick on the draw – but it is all just Fantasyland to the rest of us.) 

I am told that firms like those involved in this case would be likely to bill about $15,000 per day of the hearing plus a healthy hit outside that.  So each of the ten parties to this case, or at least those most actively involved, might be looking at a figure for costs of about $35,000 a day.  That is probably a lot more than the average investor tipped in – if there are many still living.  That would give a figure well north of $250,000 a day for the hearing across the parties.  Plus the costs of running the court. 

I could be way out on those figures, but there will have to be a full accounting of how trust funds were disbursed.  And we will then all see.  You do not have to be au fait with Story on Equity Jurisprudence to know that the obligation to account inheres in any relation of trust and confidence.  The judgment records that ‘as at 31 December 2020, the Contradictor and the SPR (Banksia receivers) had incurred approximately $7 million and $3 million in costs, respectively.’ 

Mercifully, I have only been involved in a couple of those extravaganzas, which quickly develop a life of their own, but as you go into the court room, you can feel a kind of hum of contentment as the meters tick happily on.

8

The recovery proceedings were commenced on Christmas Eve 2012.  Banksia was wound up in June 2014.  The recovery proceedings were settled, but the Court of Appeal sent the settlement back to a single judge in November 2018 to consider the claim for costs and commission.  The Court appointed the Contradictor.  It later added defendants. 

An interim judgment on those issues was given in October 2021.  The judgment runs to 696 pages.  It more resembles the report of a royal commission than the judgment of a court on an issue of costs and a claim for commission.  There are issues outstanding, and I have not referred to a welter of other cases arising from the collapse of Banksia.

9

When Hamlet considered whether he should toss the towel in permanently, one of the things that got him down was ‘the law’s delay.’  But there was also the ‘oppressor’s wrong, the proud man’s contumely….the insolence of office.’  Well, his Honour had plenty of all that before him. 

But he also had before him a frightful consummation of our two biggest failings in this profession – cost and delay; greed and not so much sloth as timidity, and failure of nerve. 

In commenting on what I regard as an unholy mess and a disaster for those old people in the country, I wish to make it clear that I am not criticising the judge.  On the contrary, in my view, his conduct of the case was a model of its kind under the present system.  (And I might also say that I impute no lack of care to those performing the difficult part of the Contradictor.) 

It is the system that I find wanting.  And for that, we are all responsible.

Nine years after Banksia collapsed, the litigation is still going on, and in the pursuit of crooked lawyers, the lawyers have been paid millions of dollars that dwarf the costs sought to be stolen by the crooks.  It is not hard to imagine the tone of the seniors’ conversation at the Kyabram RSL.  More like Jack Cade than Hamlet.  (Jack Cade was a heavy booted populist before his time.  The first plank in his policy was that suggested by Dick the Butcher, to ‘kill all the lawyers’.)

10

There is no doubt that the two main blots on our name – delay and expense – are joined together.  The longer the case goes, the more money the lawyers make out of it.  The punters want to get out of it as quickly as they can.  The lawyers are professionally obliged to help them do just that – quite apart from what any act of parliament might say.  But the lawyers have a real financial interest in doing just the opposite. 

There you have a definitive conflict of duty and interest in those who hold positions of trust – the lawyers.  And the law says such office holders must avoid getting into such a position.

The rot started to set in about when I started in the law.  The brief to a barrister had to be marked with a ‘brief fee’.  You charged for one conference, but otherwise that fee took you through the first day of trial.  After that you could mark a ‘refresher’ of two thirds of that fee for each succeeding given period.  Except for the most down at heel, counsel had no incentive to prolong the case; au contraire. 

Then time charging began to come in.  When Daryl Dawson took silk, I moved to the chambers of Bill Ormiston.  I cleared his desk in the long vacation.  One brief was for the Deputy Commissioner of Taxation on an issue of credit.  When Bill got back, he said the Commonwealth was lousy on brief fees, but they paid for preparation.  It may not surprise us if it was the Commonwealth that breached the dam.  They always seem to have lots of money to play with.  But they forget that it is ours, not theirs.

11

Not only have we as a profession failed to contain the demon of time charging, we have made it much worse by the way we manage disputes when they go to court.  Starting in about the mid-eighties, the judges started to control each phase of managing the case before it got to trial.  It happened in commercial lists in the Supreme Court and across the field in the Federal Court.  They ordered people to take steps.  That costs money, as it does to attend court to argue about procedure.  Then they ordered books of documents to be prepared.  This became the bane of young solicitors and drove many of them from this part of the law.  Not enough barristers, and therefore judges, have seen at first hand the maelstrom that is unleashed in a law office when these come to be prepared.  It is very demeaning.

And then came the worst and most insulting step of the lot.  The witnesses were ordered to give their evidence in chief in writing – with the help of their lawyers.  This was a disaster in every way.  It extended and demeaned the process and left the punter wondering what it was all about.  These problems have been catalogued many times.

And all this intervention by the judges did little to dispel the always latent threat of a sense of grandeur among them – and it moved them closer to the inquisitorial model.  They began to drift from common law and the settling presence of the jury.  You could almost sense a fall-off in the restraint of judges back in my new days. 

The threat from the Federal Court did not help with this.  Nor did the creation of a permanent Court of Appeal.  Divisions lead to tensions, and they worry the punters – and they encourage the lawyers.

(Whatever else the Federal Court was set up for, it was not to hear libel actions.  Historically, they were tried before juries – for good reason.  Not in this court.  The results are out of this world.  After an inquiry into the theatre, we now have one into the theatre of war.  Its longevity will challenge that of Banksia.  Instead of monosyllabic responses from the jury, we will get a re-write of War and Peace.   And the costs of these feeding frenzies are breathtaking.  The Commonwealth Attorney-General gets a mere $300,000 or so a year.  So his libel action was far beyond his means – and then he got into trouble for the way he sought to fund it.  Litigation funding is indeed fraught.  Do we lawyers not see people losing whatever faith they may have had in the justice system?)

12

And while we were making it so hard and expensive for the punters to get to trial, we were steadfastly refusing to set time limits within the trial – for the purpose of managing the hearing and making it as short as decently possible. 

The Greeks did so at the time of the trial of Socrates.  Our High Court does it.  The two most elevated courts in the world do it.  But, in the work place where the punters get to take the heat, we refuse to do it.  Why not?   Is there any improvement on inertia and timidity – and plain want of care?

And that’s before you get to the marathon hurdle race that we make our judges endure when charging a jury.  You would give an American judge very bad nightmares if you showed them one of our off the shelf charges to a jury.  Or what an appeals court does to a deviant trial judge.

So, that is one problem that Banksia shows us – the conflict of duty and interest that we see in lawyers involved in litigation.

13

Next, there is a real sense in which the Court is exposed to conflict.  It has at least two relevant duties.  One is to provide a fair trial.  In the language of a statute I will come to, I would think that that duty is ‘overarching’ or ‘paramount’.  The other duty of the Court is to see that the lawyers who are its officers are behaving as they should. 

The investors have at most a limited interest in the latter.  They just want to get as much of their money back out of this disaster as they can.  If the disciplinary role of the Court hinders it in looking after the investors, then the investors are against it. 

Banksia collapsed in October 2012.  Recovery proceedings started that year.  They involved allegations of fault against those managing the business of the company.  The settlement of those claims led to this litigation.  That involves allegations of dishonesty against their own lawyers – who became the next targets for the investors.  But nine years after the collapse of Banksia, the litigation is still going – and eating up the fund that was meant for them. 

The principal malefactors were the lawyers.  The two counsel confessed in August 2020.  As I see it, this trial then ran for more than twenty sitting days.  The expenditure of that time and money may have been both necessary and desirable in the interests of justice for the people of Victoria as a whole. 

But was that the case for the investors?  The final days of these aging Australians in the bush, who would not have in their number many with a sophisticated acquaintance with business or the law, have been blighted.  It is not easy to think of litigants who have been hard done by as much as these – those still living.  And we lawyers are to blame – whichever way you look at it.

As you might imagine, lawyers have been agog about this case.  But many seem to have been more worried about the effect on themselves than the investors who have been the victims – twice.  It is trite but true that the most important person in the court is the loser.  The malefactors will get their deserts.  The real losers in all this litigation are the investors. 

But that is not how we treat them in our judgments.  We do not write those for the parties.  The prospect of an investor reading nearly 700 pages is next to nil.  There is not much reference to the pain and suffering of the real losers.

14

May I now say something more about the policing or disciplinary function? 

There are many references to the Civil Procedure Act 2010.  I have only ever looked at that as a litigant, and I wondered what on earth it all meant.  It looked like motherhood in the grand style.  Were not people under these obligations before the act was passed?  What do the terms ‘overarching’ and ‘paramount’ mean?  They are terms of Roman law and the codes.  They are not the way of the common law.  Attempts at the entrenchment of very large ideas are very dangerous – as our High Court found for the first ninety years of its existence with the words ‘absolutely free.’  And you risk the sort of problem you get with company and tax laws – you clog the system up with so much detailed regulation that you are in danger of forgetting or not applying what Sir Owen Dixon called basal principles. 

This act looks to me to be the kind of law that is longer on aspiration than consequence, and that was written by people who have not spent much time in the trenches.  The casual entrenchment, in s. 26, of the process of discovery, that wanton child of the Court of Chancery, is in my view a disaster.  Discovery is one of the main processes that has sent our litigation clean off the rails and put costs through the roof, and the wording of the section could be Christmas for any bush lawyer.  In a process that is related to trial by battle, it is novel to have a procedure that depends on your placing trust in your adversary.

But the statute does give the parties and the judges a kind of weapon.  Judges frequently invoke it against slow or slippery litigants – in ways I think that would have elevated at least one eye-brow of Lord Mansfield.  But you do not often see a court applying the act to itself. 

15

Well, the effects of ss. 7, 8 and 9 of the act are that the Court must act so as to is ‘to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.’  The Court must do that, and in doing so, it must  have regard to the ‘just determination of the case; the public interest in the early settlement of disputes by agreement between parties; the efficient conduct of the business of the court; the efficient use of judicial and administrative resources; minimising any delay between the commencement of a case and its listing for trial beyond that reasonably required for any interlocutory steps that are necessary: and the timely determination of the case’.  And in doing all that, they have to act in a manner that ‘is proportionate to the complexity or importance of the issues in dispute; and the amount in dispute’. 

People in business and those experienced lawyers that act for them, including me, would say that the last is by far the most important issue.  Plenty of sensible people I know in business refuse as a matter of policy to go near a court unless the alternative is Hiroshima.  And I do very little to try to shift them.  It closely resembles my attitude to surgery – you only submit if the alternative does not bear thinking about.

Now, that part of the act is a bit of a mouthful.  But the act is like that.  The question then becomes: have the courts involved in this litigation since it started in 2012 discharged the statutory duty that they owe to the people of Victoria?

Those holding up the bar at Hurley’s on the main drag in Kyabram would laugh mordantly at anyone silly enough to put the question.  But the mood could get very ugly if some smooth talking suit from the Big Smoke – not another one of those! – sought to maintain the contrary.  They know too well the grief that this shocking rolling disaster has brought to ordinary decent people near to them.

The judgment commenced by citing some remarks about the reliability of counsel made by an English baron who held the office of Master of the Rolls in 1837.  Those remarks do sound alarmingly Victorian now.  Right at the end of the judgment, after a painstaking analysis of ultra-complex issues beyond the comprehension of most lawyers, let alone those people retiring in northern Victoria, his Honour said:

From my ‘ringside’ perspective, I saw no reason to be concerned about the efficacy or regulation of group proceedings or litigation funding as pathways for access to justice, or about the capacity of the legal system to properly self-regulate.

This judgment also records the restorative capacity of the civil justice system to protect fundamental values, to protect its integrity through the commitment of the judiciary and the profession to preserve, maintain and nourish the common law’s absolute commitment to the proper administration of justice. Ultimately, despite the best efforts of the Contraveners, the spoils were never divided.

Elsewhere, His Honour said:

The civil justice system protected the litigants, but not without some damage in the public eye to its integrity. It is infinitely more difficult to regain the community’s trust than it is to condemn, in the strongest possible terms, the appalling conduct I have documented.

Perhaps most worryingly for the community, is the finding of the Court that but for this process, the crimes would have gone undetected:

Had any of the Contraveners properly discharged the overarching obligations they contravened, the dishonest and fraudulent scheme uncovered by the Contradictor would never have been devised, and the need for such a wide ranging and expensive enquiry would have been avoided. I am satisfied that, but for this remitter, the contravening conduct would never have been uncovered.

That finding might also be of interest to the Fraud and Extortion Squad.  (I understand that a police superintendent gets paid about $173,000 a year – which is at a very different rate to those engaged in this part of the Banksia process.)    If it costs more to detect an attempted theft than the amount sought to be stolen, our peril is mortal.  And ironically, it was the felt need to revert to the adversarial model, by the appointment of a Contradictor, which sent the price hike into overdrive.

16

We are, as I follow it, in large part talking about how trust moneys have been applied.  All litigation is a form legal gambling.  That’s not something you ordinarily do with moneys held on trust. 

There is obviously an exemption here, but we need to understand how the underlying principles governing the treatment of the investment of trust assets have been observed in this case.  We after all talking about litigation funded to look into the unlawful behaviour of those funding and acting in the main recovery action.  This is the clean-up of a dreadful mess inflicted on decent people by dreadful lawyers.  It would be idle to suggest that the lawyers involved in the clean-up must be models of that fine old term – prudence.

Some of the language in the judgment suggests that the aura of a crusade hung over parts of this case.  If contained by ordinary notions of restraint appropriate to our profession, that is fine – provided it helps to advance the relief sought by the investors.  Jailing malefactors will not of itself get them any of their money back.  Indeed, it may leave them worse off by leading insurers to deny indemnity and leave any money claim worthless.  It may be like having your new Benz crashed into by some clown who then tells the police that he was drunk.

17

Lawyers do not ordinarily advise people to chance their arm in the judgment hall after suffering some wrong unless they have a reasonable assurance that their prospects of winding up better than they are warrant their embarking on that course. 

The investors got such an assurance before they started the main action.  Who gave it when they prosecuted the action after the settlement?   Who was responsible for monitoring that advice for the benefit of the investors during the long months of the hearing this time round – and by reference to what legal criteria?  If the pursuit ceased to be worth it, who should have said what to whom – and when?  What evidence was there about the worth of the defendants? 

The judgment refers to Professional Indemnity insurance, but it does not cover crime; any cover for negligence may be unlikely to extend to these claims – even for costs; and big hitting lawyers, especially those from big firms, usually insulate their assets.  Even if a fidelity fund were answerable, that would involve the tab being picked up by people who were not at fault and otherwise responsible for the loss.  In some of the myriad decisions, you will find references to the potential liability of others standing behind the defendants.  This is one of those fringes of this nightmare that gets very murky.

May I refer to some remarks I made about Clausewitz On War (in a book yet to be published)? 

Who could disagree with the following?

‘No one starts a war – or rather no one in his senses ought to do so – without first being clear in his mind what he intends to achieve by that war and how he intends to conduct it’.

That simple common sense was forgotten – outrageously – in Vietnam and Iraq and it now looks to have been forgotten by all parties in Syria.  It is also a question that needs to be raised and answered – with ruthless persistence and honesty – by anyone contemplating that form of judicial duel that we know as litigation.  As the Commentary to the Folio edition remarks, the ‘war in Vietnam had every possible kind and degree of incoherence both of objective and of method.’  Exactly the same could be said of Iraq, Afghanistan, and Syria – and far, far too much litigation.  What on earth did they have in mind?  And I expect that similar questions may be put for many examples of surgical intervention – even if you don’t see war as a gross form of surgery.  If I may be forgiven the platitude, surgery, like war, involves invasion.

The question is then – in the events that have happened, are the investors better off for what we have done for them since the intervention of the Court of Appeal than they were before that?  Perhaps the question should be – where should they be now if we had acted decently from the time that they first sought our help?

In looking at that question, we must ask whether we, and in particular the judges, have sought to follow the teaching of Lord Mansfield that I referred to above. 

One of the duties of the court is to protect the litigants from their own legal advisers.

Remember that this decision is just one of many involving Banksia.  Huge sums of costs have been run up in Victoria and New South Wales, in appeals, including one to the High Court, and one party flagged a possible proceeding against an insurer direct. 

I suppose that someone could tell how much has gone from the fund on lawyers so far.  What the investors will be asking is: Do you think what we ever get back might equal what the lawyers have taken out?  Or might the court be told that the parties have finally reached the ghastly milestone of Bleak House – the till is empty? 

People asked similar questions about the cost of the Melbourne Response of the Catholic Church to claims against it for abuse by priests.  (Curiously, Corrs acted for the Church there and for the Contradictor in the present case, a happenstance for which the partners must be duly grateful.)

It is clear from the terms of the judgment that the Court was troubled by the need imposed by statute to watch the proportion of costs to the amount in dispute.  We lawyers get squeamish about costs – usually for good reason. 

I have had to look at them in four different capacities – solicitor, barrister, client, and tribunal member.  (In the Taxation Division, we decided not to follow the common law rule that costs usually follow the event.  We left that issue at large where taxpayers were questioning the conduct of the Crown, and where government had its own interests in getting a ruling – if necessary by going as far as the High Court.) 

It is hard to see how a court can monitor the proportion of costs to the amount in dispute without knowing what those costs are – and that may lead to a level of intervention far greater than what we thought was either necessary or desirable in the past.  And some mild blushing at the bar table.

But the Court here was actively involved in how the process was structured.  The parties had settled.  The court approved the settlement.  There was an appeal.  That meant that a Contradictor had to be appointed.  Then the court added defendants.  The sky-rocketing of costs followed directly from court interventions. 

One of the issues that troubled the Court of Appeal was the capacity of the litigation funder to lead to conflicts of interest in any settlement.  This was a major consideration in their holding that the trial judge should have appointed a Contradictor.

The burden on the court should not be increased by terms of settlement that inhibit parties from assisting the court. Here, the judge’s refusal to appoint a contradictor, which was motivated by a desire to avoid costs, failed to adequately come to grips with the potential for conflict and the need to ameliorate the burden on the court in assessing the appropriateness of the claimed commission and costs.

The felt need ‘to ameliorate the burden on the court’ may look more than a little wan now to the investors in the country wondering where all the money and time have gone.

In chapter 39 of Bleak House, Dickens laid out his horrible indictment of Chancery then.

The one great principle of the English law is to make business for itself. There is no other principle distinctly, certainly, and consistently maintained through all its narrow turnings. Viewed by this light it becomes a coherent scheme and not the monstrous maze the laity are apt to think it. Let them but once clearly perceive that its grand principle is to make business for itself at their expense, and surely they will cease to grumble.

Then in chapter 65 comes the unthinkable.

“Mr. Kenge,” said Allan, appearing enlightened all in a moment. “Excuse me, our time presses. Do I understand that the whole estate is found to have been absorbed in costs?”

It does not bear thinking about that in the next millennium, we might be seeing the rebirth of Dickens’ Court of Chancery.

18

So, they are some of the troubling questions coming out of what Churchill may have called a ‘colossal’ professional ‘disaster’ – and, above all, a ghastly human tragedy. 

Before I conclude, may I say something further here about some of the fees I have quoted?  This has always been a sensitive area for those at the top of my profession at any one time.  Responsible lawyers at the peak of the profession and at the top of the market have to justify getting paid what the free market will bear in return for their achieved excellence – against the possibility that the public will merely see them as Gordon Gecko revived. 

The incomes of top silks and leading partners in the big firms now approach those of senior bank executives.  And they are as a breed right on the public nose, fairly or otherwise, because they are seen as appropriating great swathes of public money for no other reason than that they can – and they then get the nod from those in that timid incestuous breed that has claimed the boardrooms.

I was heavily involved in the battle for BHP in 1986 on both sides of the profession.  It may have been the biggest litigation in Australia since the Bank Nationalisation Case.  People with better memories than mine say the fees for top silks then ranged from about $2200 to $3000 a day.  I doubt that inflation would bring those fees to $25 to $30,000 a day now.

There is not I think anything new in this problem – that really comes down to PR – which lawyers are not supposed to be there for.

We need to recall that we subscribe to the notion of free markets.  We have resisted fixing fees for lawyers.  In 1985, I was retained by the Victorian government to draw a bill for an act of parliament to set up a regime to fix legal fees.  (I had once settled a maintenance case in the Magistrates’ Court with John Cain, the Premier.)  The law firms killed that off – they said we would lose business to Sydney!  There are scales of fees in the lower courts but not for big cases.  That means that the winner rarely gets back the lot of their costs.  The shortfall in big cases could wipe most people out.  Even when they win, they lose.

Experienced lawyers whose judgment I respect say that the highest chargers at the Bar are worth the money.  That really should not come as any surprise.  It is not just that the market is a good index of value.  The really top people get to the point more quickly and with more assurance than others. 

We might recall the libel action where Whistler sued Ruskin for libel for saying something like Whistler had tossed a pot of paint in the face of the public.  In cross examination, Whistler was asked how long it would take him to dash off one of those paintings.  ‘I might do one in an evening.’ ‘And for the work of an evening, you charge fifty guineas.’ ‘No – not for one evening, but for the experience of a lifetime.’  Picasso made a similar remark – I have a print of a drawing of a bum that consists of four lines – and there is no answer to it.

There will remain the image problem and the danger that people might think that the wealthy are better off in court because they can afford the best lawyers.  That would not be right – I hope – and it would be very unfortunate. 

There is, I think, another consequence.  Up to about twenty years ago, the bench was the destination for the best at the Bar.  The pension was the big draw card.  In part because of improved facilities for superannuation for the self-employed, and in part because of the sodality and plain hard work of life at the bench, that is no longer the case.  There has been a dramatic shift in the centre of juristic gravity from the bench back to the Bar.  If that is a problem, and I am not sure if it is, I have no idea what to do about it – or the problem of the perceived advantage of the rich.

19

But I do have very clear views on what to do about the delay in the law that troubled Hamlet.  I have expressed them – too often – before, and I will not repeat them here. 

Perhaps I may be permitted some reflections here on des temps perdus.  In 1970, I spent four months filling in for my dad as associate to Mr Justice T W Smith.  It was a great privilege that has shaped my thinking on all aspects of the law.  Smith was acknowledged to be the leading judge of his generation.  You could not have had a judgment like that in Banksia back then.  His Honour wrote his decisions at night – or standing up at a desk with a nib pen and an inkwell.  (When I had to read the typescript out loud when proofing, I was embarrassed at not knowing the names on the nominate reports; his Honour, an equity lawyer, knew them all – and their correct pronunciation.)  Of all his judgments, that which is most still in use is probably the report of a charge to the jury on acting in concert.  It covers about two pages.   The Table of Contents in Banksia covers more than six pages.  (I can recall a time when Sir Garfield Barwick was criticised for dictating his judgments – and sounding more like an advocate than a judge.)

The modern law of restitution, or unjust enrichment, started with the decision of Lord Mansfield in Moses v Macferlan.  His Lordship’s trial note book covers four pages.  (There was of course no transcript.  The English at all levels went without transcript for a very long time.  In my thirty years hearing cases, I do not think I had transcript before I gave a decision – except for a public inquiry in 1971 where I chaired a committee of a public body.)  From memory, the report of the decision in that case runs to about four pages. 

The modern law of negligence and that of product liability was set out in a judgment of Justice Cardozo in the US and an opinion of Lord Atkin in the UK.

One footnote may be permitted to these judgments.  That of Cardozo J is about ten pages in the reports; that of Atkin is about twenty one pages.  Atkin in his judgment refers to the ‘illuminating judgment’ of Cardozo, and apologises for his own ‘long judgment’.  Heaven only knows what either of these great judges would have thought of the effusive fulminations of the doom-thunderers of nowadays.

The footnoted essayists of those Ph D theses standing for judgments now might wish to contemplate the dilemma.  If they are not saying anything new, they may be wasting their and our time.  If they are saying something new, they will almost certainly leave us all worse off – unless they are up there with Cardozo and Atkin – which will certainly not be the case.

May I, however, offer one suggestion prompted by our new found respect for the intervention of parliament?  The judges could, without further ado, invoke the fine language and the high purpose of the Civil Procedure Act by immediately confronting a cause of delay in litigation that has defied Magna Carta and bedevilled the people for centuries – judges reserving judgments too often and for too long.  Justice delayed is justice denied.  

The court could publish a running list of reserved judgments and put in place a process to deter judges from having any more than one judgment outstanding at any time and for reserving any judgment for longer than two weeks. 

This legislation, which I had thought was crass window dressing, was passed with quite express purposes – to reform and modernise procedure, and to provide for the efficient, timely, and cost-effective resolution of the real issues in dispute.  If the judges get serious and seek to advance those purposes themselves, they could send a signal, as the politicians are wont to say, to both punters and lawyers that the traffic in either exhortation or reform is not one way. 

Then we might all give thanks to that noble English judge who concluded a judgment with the words: ‘I hope I have not said anything original.’  (Even if he did borrow the term from a knighted alpinist from Eton and Cambridge in a lecture given in 1903.)

OK – this is a cliché, and I know what George Orwell said about them, but with the best will in the world, I can’t resist this one.  It’s about time the judges took some of their own medicine.  They’re sure ready enough to hand it out to the rest of us. 

20

In the paper Jesting Pilate that I referred to above, Sir Owen Dixon quoted Hamlet, without ascription, in talking about men of action and lawyers.  It is worth setting out what that great lawyer said at some length.

Unlike men responsible for immediate action, we have all the advantages which dialectical discussion can give; by the ordinary legal process relevant facts and circumstances can be made to appear, and we have time, if not leisure, in which to reach our decisions and prepare our reasons.  If truth is an attribute which can be ascribed to a purely legal conclusion, it should be within our reach.

These are very different conditions from those in which the man of action is often placed.  For the strength of such a man lies in his anterior equipment of knowledge and in experienced and wise but courageous intuitive judgment.  The native hue of resolution cannot be sicklied o’er with the pale caste of thought.  Enterprises of great pith and moment must not, with this regard, their currents turn awry and lose the name of action.

Sir Owen was not suggesting that the man of action has no place in the law.  Action is what need now, together with ‘experienced and wise but courageous intuitive judgment’. 

The reference to courage is not an accident.  Clausewitz said a lot that applies to us.

War is the realm of danger; therefore courage is the soldier’s first requirement.  Courage is of two kinds: courage in the face of personal danger, and courage to accept responsibility, either before the tribunal of some outside power or before the court of one’s own conscience… …The role of determination is to limit the agonies of doubt and the perils of hesitation when the motives for inaction are inadequate…Determination proceeds from a special type of mind, a strong mind rather than a brilliant one….Presence of mind is nothing but an increased capacity of dealing with the unexpected ….A strong character is one that will not be unbalanced by the most powerful emotions.  Strength of character does not consist solely in having powerful feelings, but in maintaining one’s balance in spite of them.

We as a profession, bar and bench, have not given enough attention to the role of character, courage and determination in what we do – it is the ‘courage to accept responsibility’ that lies at the heart of any true profession. 

Our failure to find that courage is, I fear, at the heart of our failure overall in our profession.  It is a failure of nerve.

21

Finally, in 2008, I got a shock to read the blurbs that the publisher had extracted from my book, The Making of a Lawyer, What they didn’t teach you in Law School.  They read as follows.

Litigation is a legalised form of gambling that most people cannot afford.

It is notorious that the greatest professional hazard for lawyers, apart from greed and arrogance, is bullshit.

As a profession we have to do something about the level of fear that is constricting our professional lives and usefulness.  We are increasingly looking like the timid inmates of an anal hierarchy that has turned in on itself.

And since then, it has been downhill all the way – and it’s about time that we said that the carnival is over.

REFERENCES

Dutch historian: J Huizinga, The Waning of the Middle Ages, Folio, 1998, 1, 7.

Collapse of Banksia: all references to the evidence come from the judgment of John Dixon, J in Bolitho v Banksia (2021) VSC 666 (11 October, 2021).

Judgment hall: Owen Dixon, Jesting Pilate, Law Book Co., 1965, 10.

Magna Carta: Imperial Acts Application Act, 1958, s. 3.

Mansfield: E Heward, Lord Mansfield, Universal Law Pub., 1998, 47-48.

Oldham figures: James Oldham,The Mansfield Manuscripts, U N C P, 1992, 122.

Judicial anaemia and justifying the law: C H S Fifoot, Lord Mansfield, Oxford, 1936, 52, 231.

Theft: Crimes Act, 1958, ss 72 ff.

Bill of Rights in our law: Imperial Acts Application Act, above.

Costs in judgment: par. 1774.

Travails of Hamlet: Hamlet, 3.1.71-73.

Jack Cade: Henry VI, Part II, 4.2.75.

Ringside perspective: pars.2139-2140.

Damage in the public eye: par. 2123.

Proceedings necessary to uncover fraud: par. 2051.

Clausewitz quote: On War, Folio Society, 2001, 587(Book 8, Chapter, 2).

Costs in Taxation Division: Damon v Commissioner of Land Tax (1985) I VAR 130.  In that case, after a two day hearing, I directed the taxpayer to pay the costs of counsel for the Commissioner – $650 on the appropriate County Court scale for brief, conference and one refresher – ‘the cross-examination of an 83-year old widow on behalf of the revenue is likely to be at once delicate and dangerous.’

Proportionality of costs to loss: This was canvassed at great length at the hearing.  It is very involved.  For example, at pars. 2043 to 2045, we get:

Proportionality and avoidance of duplication is also evident from the estimated quantum of costs incurred by the SPR to date, which is approximately half of the costs incurred by the Contradictor. I have observed that throughout the remitter, the SPR has selected from his legal team only those who are appropriate to deal with the issues then before the court.

That being said, I find it deeply regrettable that more than $10 million in legal costs has been necessarily expended from debenture holders’ funds for the Contradictor and the SPR. When I was first allocated the remitter my expectation of the work that might be involved was substantially less than that. The substantial costs incurred is a consequence, all too commonly observed in civil litigation, of parties having to respond to the attitude and approach adopted by the losing party…. A real sense remains that the Contraveners might have already dissipated their assets in the cost of their defence, to the detriment of debenture holders.

See the remarks of Claudius in Hamlet below.

Court of Appeal on Contradictor: Botsman v Bolitho (No.1) (2018) 57 VR 68, par. 336.  At pars. 339-346, the Court looked at the potential liability of others standing behind the defendants.

Previously expressed views: The Cancer in Litigation (1997) 103 Victorian Bar News, 26; 104 Victorian Bar News 24; 105 Victorian Bar News 23; Once were Lawyers (1999) 73 Australian Law Journal 52; Fusion or Fission? (2000) 20Australian Bar Review 70; Unfair Trials (2001) 75 Law Institute Journal 72; Horses for Courses: Warlords as Peacemakers: Are Trial Lawyers Bad for ADR? (2002) 68Arbitration 1 (London); Judicial Overservicing: Bringing Home the Bacon (2002) Victorian Bar News 46; Bush Lawyers (2004) 128 Victorian Bar News, Autumn 26; Positive or Negative? The Attitude of Lawyers (2004) ADR Bulletin, Vol 6 No.10, 198; Is Mediation getting on the nose?  Are the judges killing mediation?(2005) ADR Bulletin, Vol.7, No.6, 106; Surviving the Law, Victorian Bar News,2006; Talking with Liars and Bullies, 140 Victorian Bar News, Autumn 2007, 41: Does the Bar Matter? Victorian Bar News, 2008; and The Law of Evidence and the Mess We Are In, (2021) 169 Victorian Bar News 50-53.

Acting in concert:  R v Lowery and King (No. 2) (1970) VR 560.

Moses v Macferlan: (1760) 2 Burr. 1005; the trial notes may be seen in Oldham, above, 170-174.

Cases on negligence: Macpherson v Buick Manufacturing (1916) 217 NY 582; Donoghue v Stevenson (1932) A C 562.

One footnote: my The Common Law, Scholarly Publishing, 2012, 66.

Saying something original: Lord Steyn in Mannai Ltd v Eagle Star Assurance Co Ltd [1997] 2 WLR 945 at 966.

Dixon on Hamlet: Jesting Pilate, above, 10.  A student I am mentoring kindly drew my attention to some remarks of Claudius in Hamlet:

In the corrupted currents of this world
Offence’s gilded hand may shove by justice,
And oft ’tis seen the wicked prize itself
Buys out the law….(3.3.57-60).

The Making of a Lawyer – What they didn’t teach you at Law School: Hardie Grant, 2008.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s