Banksia class action lawyers to be struck off legal roll

Justice John Dixon says the lawyers and funders had engaged in ‘egregious conduct in connection with a fraudulent scheme’ by overcharging victims of the collapsed financial group.

A former high-flying Victorian barrister and his fellow lawyer accused of overcharging victims of the collapsed financial group Banksia Securities in a class action scandal will be struck off the roll of legal practitioners.

The Victorian Supreme Court found top silk Norman O’Bryan SC, fellow barrister Michael Symons and class action lawyer and funder Mark Elliott, who died in February last year, overcharged victims of Banksia Securities by inflating their fees and commissions in a class action in a way that was “adverse” to members’ interests.

The judgment has also been referred to the Director of Public Prosecutions for further investigation and other action deemed appropriate.

The $64m class action settlement was challenged by a Banksia investor, leading to the Court of Appeal directing a trial judge to investigate the $12.8m (plus GST) commission the litigation funder took and the $4.7m (plus GST) in legal fees charged by the lawyers. The class action, funded by Mr Elliott’s Australian Funding Partners Limited, was filed in 2012 on behalf of investors after the $660m collapse of rural ­lender Banksia Securities.

On Monday afternoon, judge John Dixon handed down his judgment in the civil case, noting that the lawyers and funders had engaged in “egregious conduct in connection with a fraudulent scheme” by attempting to claim more than $19m in purported legal costs and commission, had “shattered” public confidence in the legal profession and had “corrupted the proper administration of justice”.

He said they had also waged a “campaign of intimidation” against the class action member who raised concerns about the commission and legal fees.

Justice Dixon ordered Mr O’Bryan and Mr Symons to pay damages of $11.7m to approximately 16,000 group members.

The Morrison government has led a crackdown on Australia’s rising number of class actions and the lucrative litigation funding industry. Last month, the government unveiled a draft bill to rein in commissions collected by litigation funders and the fees charged by the lawyers in a sector estimated to be worth about $1bn a year.

Under the changes, the profits of class action funders and lawyers would be capped at 30 per cent of the settlement.