Law firms fight over Qantas class action, judge urges no expensive or wasteful tussling

A federal court judge has urged two law firms to avoid a wasteful fight over who gets to run a class action against Qantas over cancelled flight refunds.

Former Qantas boss Alan Joyce. Picture: Brendon Thorne/Getty Images

Two law firms are competing to hold class actions against Qantas in what would amount to significant publicity for the ultimate winner.

Echo Law, a firm based in Melbourne, lodged its case to claw back more than $1bn in refunds from cancelled flights during the pandemic with the Federal Court in August this year.

But on Thursday, during a case management hearing, it emerged Piper Alderman has also spent the past six months investigating a case against the airline and anticipated it would file in weeks.

Barrister Thomas Bagley, for Piper Alderman, said it was likely both proceedings will attract the same group members.

“I can’t be sure that the group definition will be identical, but I expect it will substantially overlap with the group definition in the Echo Law proceeding,” he said.

“The proposal at this stage is to file a competing action in this court.”

Federal Court Judge Bernard Murphy ordered Piper Alderman to file its case within two weeks if they intend to go ahead.

Echo Law’s case alleged Qantas breached its contracts with customers by failing to provide cash refunds for cancelled flights, or failing to do so in a timely manner.

Instead, they provided travel credits.

The court heard Qantas had allegedly held $1.2bn for a number of “months and years” and had enjoyed substantial profits from it before returning $700m to customers, meaning they still owe $500m.

For Echo Law, barrister Oren Bigos KC told the court Piper Alderman’s case was “hypothetical” and should not stop the existing case from going ahead.

“On Monday evening, Piper Alderman sent an email saying there's a proposed competing class action,” Dr Bigos said.

“The respondent (Qantas) seized on that as an opportunity to not take steps towards the orderly progress of the proceeding,” he said.

Piper Alderman does not yet have a lead applicant, and will likely strike up a formal funding arrangement with litigation financier Omni Bridgeway, Mr Bagley said.

Justice Murphy said he hoped he would not be forced to decide which action could continue in a “carriage motion”, because it is wasteful and expensive.

“Almost always the reason why cases are not consolidated isn’t the group members’ interests,” he said.

“It is the funders’ interests or the lawyers’ interests. But I won’t force two parties together who don’t want to be together because you would have to work cooperatively.”

Representing Qantas, barrister Ruth Higgins told the court her client recognised they will face action, whether it be from the lead applicant in Echo Law’s case – Marianne Haverkort – or another person.

“(The case) will fundamentally be making allegations concerning Qantas’ flight credits and its conduct in relation to them,” she said.

Ms Higgins told the court after Qantas announced that from August 31 this year anyone who had a flight cancelled during Covid-19 was eligible to claim a full refund and the pool of eligible members was likely to have “diminished”.

Echo Law partner Andrew Paull told The Australian on Thursday the case was not just about securing refunds for customers, it is about securing compensation.

“The fact they are willing to give the money back now is inadequate,” he said.

“Qantas unlawfully held onto the money for three-and-half years and earned a significant benefit from doing so, which should be passed on as compensation to customers.

“Qantas is not entitled to treat this money as a $1.2bn interest free loan.”

On Wednesday, chairman Richard Goyder caved in to pressure from investors amid rolling controversies at the airline — including illegally sacking ground handlers and allegedly selling tickets to 8000 ghost flights — and revealed he will step down at the end of next year.

It came after former chief executive Alan Joyce abruptly quit two months earlier than planned in September.