In an earlier post (‘South Australian settlement over 2005 bushfires, approved‘) I reported on the settlement of litigation arising out of South Australia’s Eyre Peninsula fires. In that post I said “The judge’s comments when making the approval are not yet available but I will make a further post commenting on the outcome when the judgement is published.”
Those comments have still not appeared on AustLII so I contacted the South Australian Supreme Court. I’m told that His Honour did not deliver written reasons so the comments attributed to him by the media must have been made from the bench in open court, rather than in writing. Further, as is usually the case, the actual terms of the settlement are restricted (the advantage of settling a case is that you can do that; if it goes to final judgement what the judge says and who has to pay what to whom is all on the public record). It follows that the media report is all that we will see on the subject and what follows is mere speculation.

We are told that this was a $60 million claim that settled for $8 million with most of it going to the plaintiffs’ lawyers rather than the plaintiffs. This sounds like the settlement that the ACT reached over the 2003 Canberra fires – see ‘Canberra bushfire litigation settles against the ACT‘). There the ACT paid out but again most of the money went to pay the plaintiffs lawyers. What is unusual in the ACT case is that the government paid out even though the settlement was a ‘verdict for the defendant’. Why would they do that? In part because litigation is a gamble and paying out may have cost more than running the case and winning, but it certainly cost less than running the case and losing and that is always a risk. Further, a government knows that even though, traditionally, a winning party gets an order for their costs, that order will never cover 100% and for government parties, it may be even less. Again, if we look at the Canberra fires of 2003, that litigation continued against NSW and even though NSW won, the losing parties were only ordered to pay ½ of the State’s costs (see ‘Final chapter of the Supreme Court proceedings from the 2003 fires’). This sort of order reflects both that the State didn’t win on every point and that parties suing the state over serve a public interest by allowing issues of both law and fact to be tested.

To return to the South Australian case the defendants may well have thought that $8 million was getting out of the matter will. We would normally expect that, if the defendant is going to pay anything there would be a verdict for the plaintiff but as we’ve seen in the ACT matter that is not always the case. Whether the formal order is a verdict for the defendant or the plaintiff doesn’t really matter when the case as settled; a settlement is no precedent for any legal principle and can’t be relied on subsequent litigation.

So the defendants (or more accurately) their insurer pays out $8million, the plaintiff’s get not very much but aren’t exposed to massive legal bills and the plaintiffs lawyers get paid (which you may think is unfair but they did do the work and allowed the plaintiffs to test whether or not they had been wrongly injured). As with most litigation it would seem, at least for the parties, like a typical lose-lose situation!

What we can’t know and what would be interesting for readers of this blog is how the damages were split between the parties. How much did the insurer for the person who caused the fire pay compared to the insurer for the state and the CFS? Unfortunately that information is not publicly available.

Michael Eburn
7 January 2014