A Supreme Court judge has found a senior Warrnambool lawyer made misleading comments about St Patrick’s Day fires legal action.
Justice John Dixon found that Maddens Lawyers' Brendan Pendergast, one of Australia’s leading bushfire lawyers, had clearly sought to persuade insured group members to deal with his firm and not deal with their insurers.
Lawyers for insurance companies had referred Mr Pendergast’s comments, which warned fire victims about dealing directly with insurance companies, published by The Standard on September 25, to the court.
Mr Pendergast said solicitors were acting for insurance companies on both sides of the disputed claims, that Maddens would stand against any “insidious incursion” on victims’ rights and insurers actions did not pass the “sniff test”.
Maddens Lawyers had proposed to the court that an opt-out notice be circulated to potential claimants in the class action. The insurers expressed concern that Mr Pendergast’s statements in The Standard were misleading, and argued the opt-out notice should be amended to clarify those statements.
During arguments in the Supreme Court, Mr Pendergast rejected the suggestion his comments were misleading, but did not dispute the content of The Standard’s story.
Justice Dixon said the use of colourful language directed to group members via the media ought to have been avoided.
He said it brought Mr Pendergast’s motive into question.
"It is clear that Mr Pendergast was seeking to persuade insured group members to deal with his firm through the proceeding and not deal with their insurers," he said.
Justice Dixon found Mr Pendergast may have honestly held a belief that insurers were acting on both sides of disputed claims, but there was no reasonable basis for that belief.
"The baseless assertion of the appearance of a conflict of interest has a capacity to be misleading," he said.
Justice Dixon found that Mr Pendergast comments were seeking to maximise the number of group members seeking representation by his firm and, in doing so, was employing misleading statements.
He said the true extent of interference with the integrity of the opt-out process from the class action was unlikely to emerge until it was completed.
"It is preferable to now adopt a conservative and preventative approach rather than later reach a conclusion that the process was compromised," he said.
"The use of intemperate and inflammatory language has a greater prospect of inducing an inappropriate or unfair decision on the part of a group member lacking the protection of legal advice.
“The use of such language attributed to a person described as ‘one of Australia's leading bushfire lawyers’ could reinforce the impression that the misleading statements were either factually correct or statements for which there was a reasonable basis."
Justice Dixon said he would require a clarifying statement to be incorporated into the opt-out notice.
Those inclusions include: "Any steps taken by you or your insurer on your behalf may impact on your legal rights and obligations. You may benefit from seeking independent legal advice in respect of this issue."
And: "A number of statements made by Mr Brendan Pendergast, of Maddens Lawyers, published in The Standard on September 25, in relation to the St Patrick's Day fires in south-west Victoria were considered by the Supreme Court of Victoria to be misleading and to require clarification. Further, the insurance companies that provide cover to group members do not insure Powercor, and neither do their solicitors provide legal advice to Powercor."
Mr Pendergast on Tuesday said the insurers had made an application to the Supreme Court, he accepted the ruling of the court and made no other comment.
"We are proceeding with energy and vigour to advance claims on behalf of our group of clients for full compensation," he said.