Hmmn, here’s a conundrum.
Legal regulators in Victoria, Australia, have woken up to the dangers posed to ‘vulnerable clients’ by the imploding law firm Slater and Gordon.
The law firm is due to be booted out of the ASX200 index (the equivalent of our FTSE100) on March 18th – 7 days time. The implications for a firm which has lost 95% of its value are severe. Institutional investors, the ‘big’ fund managers, are forced to have a proportion of their money invested in the so called ‘blue chip’ ASX200 funds. After March 18th, they will no longer have to prop up Slater & Gordon, and will be free to sell their shares – for whatever handful of coppers they can get.
Slater & Gordon has been given until April 30th to come up with a plan that will convince the banks that they can trade their way out of their current troubles – if they don’t succeed, they will have to repay the full $890 million they borrowed to ‘expand’ their business in 12 months time. Slater & Gordon’s ‘trading income’ is inextricably tied to the settlement of the claims made by their thousands of clients worldwide for a range of alleged incidents – from rape by a travelling Womble during the commercial break – to hearing loss from working in a noisy environment.
Now legal experts in their home state of Victoria have belatedly realised the danger this poses to thousands of vulnerable clients. The quickest way to get money in through the door to satisfy the banks could be to settle claims for less than they were previously prepared to. This could be to the detriment of their clients. Particularly those where the firm is on a fixed tariff of fees. Under the Sales judgment for instance, the firm collect a fixed fee for each case, regardless of whether their client receives 100,000 pounds or 100,000 pence.
“It is a matter of public interest because there are thousands of clients with claims on track who will be wondering if they can continue to have confidence in their lawyers.”
The suggestion from leading legal academics is that the Victorian Legal Services Board appoint ‘guardians’ to protect ‘vulnerable clients’ from their own lawyers – Slater & Gordon!
Sheesh! We didn’t see that one coming!
One major problem is – who to appoint? Slater & Gordon’s rapacious travel through the personal injury boondocks has left few serious leading personal injury specialists available to protect these clients from their own lawyers…
It had been thought that some of the leading lights in the Slater & Gordon galaxy would desert the firm and set up their own small practices, taking their clients with them – now it emerges that they have a ‘gardening clause’ in their contracts, preventing them from doing any other work for three to six months, should they jump ship. It is thought that some of them will actually prefer to take such gardening leave – and keep their fitness to practice certificates intact, rather than face future censure for forcing clients to settle for peanuts in order to keep Slater’s afloat.
Will those leading lawyers care enough about their clients to go to court and try to force Slater’s to release them so that they can protect their clients?
Watch this space.
Me? I’m just staring out of my window at the river, watching all the ducks having their heads forced under water – it’s that time of year when they get royally stuffed….