Megaphone litigation

I have written about the sad case of Dr Angus MacKinnon before.

Since then, the judgment of Acting Justice Patten has been overturned by the Court of Appeal, which has ordered a new trial.  This was the outcome MacKinnon sought.

It’s clear from today’s column by Richard Ackland in the SMH that Mr MacKinnon and his lawyers are now looking to be paid without the need for a trial at all.  Here’s the final passage in that article:

BlueScope is now going to the High Court, seeking special leave to appeal. Among the grounds advanced by the company’s lawyers is one that says, “the trial has already involved considerable judicial time … The costs incurred are over $15 million. Intervention by this court at this stage could have the effect of avoiding a retrial.”

One interpretation of that submission might be: “Whatever the Court of Appeal says about the trial judge’s flawed reasons, we’ve spent enough money on this, and now we think it’s time to turn the tap off.” (1)

Five formal settlement offers were made in the case between 2002 and 2006 (three from Mackinnon’s lawyers and two from BlueScope).

The talk around Phillip Street is that BlueScope could have got out of it for a settlement of $2.5 million all up, including costs. This would have left the plaintiff with about $800,000 clear. (2)

Instead, on it plugs.

Keddies partners funded close to $1 million to run the trial and appeal. The firm says it will continue to fund the High Court appeal and any retrial. (3)

About $2 million in plaintiff barrister fees are outstanding. In all about 18 barristers have been involved. (4)

The Mackinnons sold their home to put in $300,000 for disbursements. They now live with Mrs Mackinnon’s parents at Clovelly with two young children.

Perhaps, like Dickens’s Jarndyce and Jarndyce, one day someone will run of out money and the whole thing will stop. (5)

Angus Mackinnon says: “Basically, I would like an apology. That’s what I would like.” (6)

I don’t think this is Ackland’s finest hour.  Taking up the points flagged above by the numbers in parentheses:

  1. That’s very cute of Ackland to say “one interpretation of that submission might be,” since it allows him to put forward an interpretation without adopting it.  And Ackland himself should know that the point of the submission is that, if the Court of Appeal was wrong and the High Court found that to be the case (and so restored the verdict at trial) this would save a lengthy fresh trial.  It’s an argument to say why the High Court should give special leave (the High Court does not hear every appeal to it)  and not an argument as to why or why not the Court of Appeal was right or wrong.
  2. “Talk around Phillip Street” is again rather cute.  It always has to be someone talking and you can tell from the tenor of the whole article that it’s Dr MacKinnon’s lawyers (who clearly have a lot hanging on the outcome of this trial) who have been making the most noise round Phillip St.  Note that the offer mentioned (which must have been before the trial) involves $800K to Dr K and a cool $1.7M of costs and expenses, and of course Bluescope would also have been up for its own legal costs.  How did Keddies manage to spend or incur $1.7M costs on a case which they were prepared to settle for only $800K?
  3. and (with 4)
  4. Unsurprising that Keddies, having sunk so much money in the case, plan to stick by it to the end.  They must stand to gain even more if successful (as well, of course, as repayment of the $1M sunk by them into the case – assuming that to be actual cash and not one of those talked up contributions in kind comparable to much of Australia’s international aid program). 
  5. Ah, Jarndyce!  The legal columnist’s equivalent to the High School debater’s Hitler.   Jarndyce is the classic dispute over a fund which consumes the fund itself because one side at least gets its costs as trustee out of the fund – that is, it is a dispute which ends up eating up what was argued over.  The problem with this case is the other way round: as the thing gets bigger and bigger there is a more and more enormous costs tail wagging the dog of the substantive legal dispute.  This is no fund – it is a liability which, at the end, will be owed by one side to the other, albeit a liability which Dr MacKinnon, if he loses, is unlikely ever to pay. 
  6. Puhlease!  I very much doubt if Keddies is investing all this money just for someone to get an apology.  If Angus MacKinnon only wanted an apology, I bet he could have one tomorrow.  But there’d still be the question of who should be paying all the legal costs incurred in fighting over his claim to monetary compensation.

4 Responses to “Megaphone litigation”

  1. Victor Says:

    Leaving aside the legalities about which I have no competent knowledge I was intrigued by the notion in Ackland’s piece of an eight days’ long training program that comes with warnings of potential side effects such as hallucinations, disorientation etc.

  2. marcellous Says:

    Such a program hardly sounds inviting, does it, Victor? But how serious were those warnings if they were still going ahead running the course? Were they simply ass-covering [sic: US context intended] warnings to cover every eventuality?

    The legal issue really boils around the requirement for fault, summed up as breach of duty to prevent foreseeable harm plus actually causing the harm. It’s all a bit circular because inside is a judgment about causation which is a bit elastic, or as long as a piece of string. For example, things are seldom caused by just one thing, there are always other circumstances.

    MacKinnon was a doctor with many working years ahead of him. If his case on causation was really strong, I can’t think he or his lawyers would ever have contemplated settling for only $800K to him.

    Conversely, I wonder if that is how he’d managed to rack up such substantial costs and expenses at the time of the $2.5M offer.

    That is to say that there is some kind of dialectic at work here. A potentially very large but causally difficult claim becomes a gamble against what the actual legal outcome would be. The goal is to settle on the basis of chances though in the end the trial itself becomes the final throw of the dice (though every day is an opportunity to end it all by striking a deal).

    The money invested by each side in the process ends up becoming a kind of pot (except that it’s not a pot, it’s a black hole) for an ongoing double or quits process of upping the stake by not either settling or capitulating.

    As I tried to explain before, the reason why it’s a kind of black hole is because the money invested by the parties in the costs is:

    1. already spent by Bluestone, so exists only to the extent that Bluestone can get MacKinnon (unlikely) or others associated with his case (unknown but also unlikely) to ever pay Bluestone back for this if Bluestone were to win;

    2. partly spent by MacKinnon, partly by his lawyers, but otherwise, hoped for on a speculative basis by his lawyers on the speculation that MacKinnon wins or settles the case on a basis that in effect makes Bluestone pay them.

    3. spent by the other parties joined by Bluestone, payable by Bluestone if it does not win against them.

    I’m sure Bluescope can afford to forget about 1, but 2 (which is critical to MacKinnon’s side) becomes a bigger and bigger sticking point and as a matter of mere arithmetic looms ever larger as a component of any settlement, as also does 3. Of course, if each side could forget about 1 and 2 [and 3, which potentially falls within (1) or (2) anyway and necessarily if the matter is to be settled], then I reckon Bluescope could grit its teeth and give MacKinnon an apology tomorrow. That this is obviously not the case was why I found (6) so risible, even if MacKinnon could well have spoken the words attributed to him. The sentiment they express is entirely understandable.

  3. Legal Eagle Says:

    That was a terrible case. As I’ve said before on the topic, I really do hate “team building” exercises. Probably part of what MacKinnon wanted in the first place was an apology, but it’s all gone wa-a-a-ay beyond that now…

  4. Mike Boyd Says:

    Well its about time something like this showed up on the web

    I attended the same course in 1995, and I can verify its was unconventional to say the least. Many people could not talk after the course, there were reports of one individual removing his clothes in tullamarine airport and running around nude, reports of some individuals leaving their partners on return from the course.
    I consider it was in breach of the duty of care of an employer.
    I also had the displeasure of attending the second course 2 weeks residential, there was a lot of pressure to attend, promotion was at risk.

    I left the course 2 days early, they tried to stop me, but fortunately I had brought my mobile phone with me (which was prohibited) to ring a cab, the course was at the BHP then owned facility at Aitken Hill http://www.aitkenhill.com.au. Which is those days was some distance from transport.

    On my return from the last course I had decided that I would take the voluntary retirement at age 38. I did not want to work for a company that would put me through that ordeal for no apparent reason.

    I filled in thee course feedback, in which I wrote that I thought the course was in breach of the OHS act, the course organisers rang me to try to get me to change my feedback, I refused.

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