Teenager's Award Helped Pay Costs

Sydney Morning Herald

Friday June 13, 2008

Jennifer Cooke

KEDDIES Lawyers deducted a large chunk of the small damages settlement granted to an injured Chinese teenager to help fund legal expenses, including an expensive trip to Singapore.

The firm took more than $10,000 from $25,860 that remained from the money to be paid to the 17-year-old Liu Yang when she turned 18 nine months after her settlement.

At 15, during a school trip to Australia, she spent several weeks in hospital after she was hit by a car at Lakemba on the night of January 30, 2004. She underwent surgery for multiple facial fractures, leaving her with a depressed eye socket and other injuries.

In March 2006 she was brought by her parents to give evidence on commission before Justice Reg Blanch at a special sitting of the NSW District Court in Singapore. But Allianz Insurance Australia Limited offered a commercial settlement to her Keddies legal team and agreement was reached to pay her $35,000 plus costs - with $9140 of that sum to be paid after receipts were produced for claimed out-of-pocket expenses.

But until the Herald contacted Ms Liu, now a university student studying meteorology, she was unaware her claim for personal injury damages had been settled for that much. Nor did she know she was entitled to $25,860 of that sum - plus interest - when she turned 18. It is understood that receipts were not produced for the $9140 worth of expenses.

Ms Liu's father, Liu Hai Xing, was also unaware of the total settlement amount, he told the Herald in a statement. Mr Liu had acted as his daughter's "next friend" in her legal claim for damages because while still aged under 18 she was regarded as an "infant" under Australian law.

Costs in an "infant" settlement must be negotiated separately, according to a Supreme Court practice note dating back to 1967. This is to protect the interests of the infant against the competing interests of lawyers.

Deducting anything - without notifying the court - is contrary to the spirit of the Infants and Damaged Persons Act and the protective role of the court. When approving compromise settlements for anyone under 18 a judge must be satisfied that the settlement amount is adequate compensation in all the circumstances, including losing the case and receiving nothing.

The sworn affidavit of Ms Liu's solicitor, David Marocchi, which Justice Blanch took into account, mentions "for the purposes of this affidavit" the sum of $9140 outstanding in out-of-pocket expenses. Without receipts for that money Ms Liu, now 19, was entitled to the remaining $25,860 plus interest earned in a BNZA account.

Mr Liu told the Herald that "my solicitor told me, my wife and my daughter that [he] will give my daughter $10,000 as compensation plus $2000 for our travel expenses."

They were "very surprised - and suspicious", therefore, when Ms Liu received $15,000 plus interest of $169.82 in her Bank of China account after she turned 18 - because that amount was more than expected.

Mr Marocchi denied his firm had dipped into a infant's settlement funds protected by a court order. A Keddies partner, Tony Barakat, denied there was anything unethical or wrong in taking $10,000 in solicitor/client costs in addition to the $50,000 in party/party costs paid by Allianz.

Nowhere in Mr Marocchi's affidavit was a further deduction for solicitor/client costs mentioned.

This meant it was only "half true", according to a senior barrister consulted by the Herald.

Nor was there included in court documents on file at the District Court an undated document headed "authority" that was signed by Mr Liu and his daughter that allowed "Keddies to deduct the cost of travel and accommodation for my solicitors and barristers ... from my settlement money". Witnessed by the firm's founding partner, Russell Keddie, it was among papers in Ms Liu's insurance file which the Herald was authorised to view.

In a bill the firm says it sent to Ms Liu and her father, but which they claim never to have received, the total legal costs in her case amounted to $60,860.

© 2008 Sydney Morning Herald

Back to News Index | Back to Home