Yesterday’s Inq pieces at Crikey by David Hardaker and Michael Bradley ripped more than a few ugly scabs off the class action carcass in Australia. Bradley characterised that industry as a series of David v Goliath clashes—poor plaintiffs taking on the big end of town.
Hardaker outlined the curious role of the US Chamber of Commerce’s Institute for Legal Reform as a “peddler of influence par excellence” in class action litigation policy reform in this country and a body that apparently took some pleasure in the following words from Treasurer Josh Frydenberg last week talking to new regulatory conditions for third party litigation funders, i.e. those who in large part fund the plaintiffs in class action proceedings in Australia.
Now more than ever we want Australian businesses staying in business focused on keeping people in jobs rather than fending off class action funded by unregulated and unaccountable parties.
Bradley’s David v Goliath struggle had a party-political cast, the Labor Party as David with deep connections to a small but powerful group of plaintiff-friendly law firms and a natural inclination to support the indigent battlers presented as, in legend if not in fact, the ‘typical’ plaintiffs. Third party funding is the grease to the class action axle: poor plaintiffs get to ‘have a crack’ and their lawyers get paid whether they win or lose.
The Coalition as Goliath adopts the advice of an unregistered external peddler of influence and predictably plays to its base by siding with a mob of very cranky corporates – including many of those most frequently the target of the class actions and with the most to lose.
There are few class action proceedings in Australian courts that do not follow this broad “plaintiff/applicant = good = supported by Labor & lefty lawyers”; “defendant/respondent = bad = supported by an evil government backed by big money” model.
Of the 67 current class actions in the Federal Court of Australia all but twelve are classic David v Goliath challenges against non-government respondents – banks, insurance companies, car makers, superannuation trustees, etcetera, etcetera.
Taking away the four matters that do not involve the Commonwealth—a single case in the Federal Court’s Victorian registry against the state government and three NT government matters in the Northern Territory registry—leaves eight matters where the Commonwealth government is listed as respondent.
Three of those are the all-but-settled PFAS cases in the NSW registry involving Defence department use of fire-fighting foam. The Victorian registry has three matters—a single ‘Robodebt’ matter and two Migration Act cases.
That leaves Brett Cattle Company v The Commonwealth.
Sarah Ferguson’s ‘A bloody business’ expose on the ABC’s Four Corners dropped a literal shower of shit on the Top End’s live cattle industry on 30 May 2011.
The Federal government immediately suspended live exports to the eleven Indonesian abattoirs under investigation and just over a week later suspended trade with all Indonesian abattoirs until new safeguards for the trade were in place. Five weeks after the initial decision the government lifted the Indonesian suspension and the first post-ban consignment of cattle left Australia for Indonesia in early August 2011.
An initial claim for losses was rejected by the Commonwealth government in May 2012 as were negotiations for an out-of-court settlement. In late October 2014 proceedings were filed in the Federal Court, claiming ‘malfeasance in public office’ by (then) Agriculture Minister Joe Ludwig; that his decision to halt the trade was invalid; and seeking compensation then estimated in the ‘hundreds of millions.’
The lead applicant was the Brett Cattle Company of Waterloo Station near to the NT/WA border. The Brett Cattle Company was operated by Emily and Dougal Brett.
By late 2014 the National Farmers’ Federation (the NFF) confirmed that its Australian Farmer’s Fighting Fund (the AFFF)—a third-party litigation funder since the Mudginberri abattoir IR battle in the mid-1980s—had already tipped $750,000 into the Brett Cattle Company’s hat in support of the action.
By late 2017 the AFFF’s contribution had grown to a tad over $4 million.
Tracey Hayes, then chief executive of the Northern Territory Cattlemen’s Association (the NTCA, a member of the NFF) since 2014 and the NTCA’s ‘facilitator’ of the Brett Cattle Company’s case and at the time in her last few weeks as NTCA CEO, told The Australian’s Sue Neale in September 2017 that Ludwig’s first temporary ban on live exports had been proper but that his:
… sudden ban that shut the whole industry down at a time when 700,000 cattle a year were going to Indonesia, 70 per cent from the Northern Territory, and only a few abattoirs in the Indonesian supply chain were suspect was outrageous … It was clearly a knee-jerk decision taken without due consideration, due process or industry consultation, and with no regard to its financial consequences and ramifications for thousands of cattle families.
Despite early indications that the case might proceed expeditiously, it wasn’t until June and December 2018 that hearings were held before Justice Steven Rares. By this time the Brett Cattle Company had been joined by around 300 cattle producers and representatives of other sectors in the live cattle supply chain who were claiming upwards of $600 million in compensation. Plus their costs (of course).
A conservative estimate of the AFFFs total bill in support of the Brett Cattle Company following the hearing would be somewhere north of $6 million.
In December 2019 The Australian reported that Minister Ludwig’s legal costs since 2011 were around $2.6 million.
That figure would likely not include the costs of the Commonwealth as respondent, which, considering that it would take the role of lead solicitor and counsel for the respondents (work that almost certainly would have been out-sourced to the big-end-of-town-law-firms in the Commonwealth’s legal pool) and the Commonwealth’s legal bill could well exceed Minister Ludwig’s bill by a fair whack.
Assuming my assumptions are correct – and I stand to be corrected – all up the bill for lawyers alone in the Brett Cattle Company matter might be $12 million plus loose change and walking around money.
In March 2015 Joe Ludwig announced he would not contest the next Senate election and his Senate term ended at the double dissolution in May 2016.
Dougal Brett died in a helicopter crash in June 2015, later found to be caused by contaminated fuel.
Tracey Hayes is a Country Liberal Party (CLP) candidate for the Darwin seat of Fannie Bay currently held by NT Chief Minister Michael Gunner in the NT general election to be held on 22 August 2020. The CLP has nominated her as the next Treasurer of the NT should it win the election. In 2016 Tracey Hayes was chosen by the NT News as the Territory’s Most Powerful individual.
18 months on Justice Steven Rares has yet to hand down his decision.
The AFFF remains active as a third-party litigation funder, though the value of the fund has been described as a ‘tightly-guarded secret.’
From June 2017 until its dismissal by the Full Court of the Federal Court in August 2019 the AFFF provided funding support in proceedings bought by the Fair Work Ombudsman – see the Full Court of the Federal Court on appeal in Fair Work Ombudsman v Tao Hu & Ors (also referred to as Marland Mushrooms). The AFFF says it is “a charitable organisation that exists to assist farmers fighting significant legal battles.” The AFFF arose out of the Mudginberri dispute in 1985, funded in part by farmers and in part by non-farming businesses and is governed by a board of trustees but administered by the National Farmers’ Federation, the peak industry body for Australian agriculture.