A sad case

Yesterday, judgment was published in MacKinnon v Bluescope Steel Limited (Formerly known as BHP Steel (AIS) Pty Ltd) [2007] NSWSC 774

The judgment commences:

1 This is a sad case; it concerns a medical practitioner who, at the height of his career nearly eleven years ago, exhibited florid symptoms of mental illness. He has since been unable to pursue his profession and that situation seems unlikely to change.

2 At the time, he was employed by the First Defendant, then called BHP Steel (AIS) Pty Ltd but now called Bluescope Steel Limited. …For some years he received payments under the Workers Compensation Act but in this action sues BHP for damages at common law, claiming breaches of its duty of care towards him.

3 At the hearing, which commenced on 22 May last year, the Plaintiff was represented by Mr G Miller QC with Ms L McFee and (from 13 June) Ms E Beilby. On 13 June it was announced that Mr Miller’s instructions had been withdrawn. Subsequently, on 26 June, Mr H Marshall SC announced that he appeared as senior counsel for the Plaintiff.

4 Throughout the hearing, BHP was represented by Mr M Joseph SC with Ms V Heath. Two cross defendants, were joined as such by BHP. Draft One Communications Pty Ltd, for whom Mr P. Blacket SC appeared, and McKenzie & Associates Pty Ltd for whom Mr A Colefax SC and Mr P. Gow appeared.

5 The hearing occupied some 89 days of evidence and there were in all 196 exhibits. Subsequently, counsel provided many hundreds of pages of written submissions which were supplemented by oral submissions in the week commencing 16 April 2007. I reserved judgment shortly before 4pm on Friday 20 April.

The judgment does not really expose the details of all the claims and cross-claims, but in extreme summary form, in 1996, Dr McKinnon, then aged 35 and a doctor employed by BHP (now called Bluescope Steel), attended a residential leadership course run for employees of BHP. The course was a fairly intense experience. At some stage during the course, McKinnon suffered something which in lay terms might be described as a nervous breakdown, from which he has never recovered. The case concerned whether BHP, or possibly the people who ran the course breached some duty towards Dr McKinnon and so caused this breakdown so that they should be required to compensate him for the consequences.

The amount at stake was substantial. The lost earning capacity for the rest of his working life of a doctor aged 35 is a considerable amount of money. Altogether there were 93 hearing days: 89 in which evidence was heard and a further 4 days for closing submissions.

You can do the maths as to the costs. The plaintiff and each of the three defendants or cross-defendants who took part were represented by senior counsel (let’s be conservative: $5K per day) and two parties also had junior counsel (again, conservatively, $3K per day). They were being instructed by solicitors (say, 1.5 solicitors on average per party per day at $3K per day). Just calculating on the basis of hearing days alone, that gives, per day:

Senior Counsel – $20K
Junior Counsel – $6K
Solicitors – $18K

That’s $44K per day x 93 hearing days: all up, $4.092 million.

The true figure must be more than that.  On hearing days the lawyers are likely to have worked longer hours (and hence been more expensive than I have allowed for) and as a rule of thumb you can assume that for each day of hearing there will have been at least another day of preparation, pretty much across the board.

And then there was the expense of running the court itself, not to mention the fees to be paid to the numerous expert witnesses.

Dr McKinnon lost.  With so much riding on the costs alone (the judge has not yet ruled on these), there will surely be an appeal because an appeal will be cheap by comparison.  I predict we will hear more about this case.

Postscript 2016: There was a successful appeal by Dr McKinnon. A fresh trial was ordered, though in the course of the appeal concessions were made by Bluescope/BHP which the Court of Appeal seemed to think would have shortened any retrial somewhat. I’m unaware of a retrial taking place.  That probably means that the matter eventually settled.