That sinking feeling

Voyager victims ... Overcharging lawyer's fee agreement upheld ... Legal struggle with receiver and Legal Practice Board chews up $1.5 million in fees ... Receivership extended ... Appeals pending 

In the Supreme Court of Victoria Justice Karen Emerton has upheld the validity of a 2001 costs agreement between Frankston solicitor David Forster and his client, Voyager disaster survivor Russell Norrish 

It's one of a series of small wins for Forster in proceedings brought by the Legal Services Board to recover money it says belongs to Forster's clients.

Forster handled 89 of the 214 personal injury claims brought by former navy personnel against the Australian government, following the collision of the HMAS Voyager and the HMAS Melbourne off Jervis Bay, which killed 82 sailors in 1964.

Many of these clients say they have been overcharged by Forster.

Forster's firm, Hollows Lawyers, negotiated a $412,000 settlement for disaster survivor Russell Norrish, but so far the client has seen only $72,000.

While the wrangling over where the rest of the money is and who it belongs to is far from over, Emerton dismissed an application made by Hall & Wilcox, the receivers of Hollows Lawyers, that the costs agreement with Norrish fell foul of the Legal Practice Act 1996 [sections 97(4)(a); 98; 102(1)]. 

The receivers say Hollows holds $364,785.16 in trust for Norrish and that the validity of the costs agreement is a material point in working out how much of that money belongs to the client. 

If the costs agreement were to be found void, then Hollows wouldn't be entitled to the no win, no fee, premium.

Emerton rejected Forster's contention that the receivers had "no specific powers" under the Legal Profession Act 2004 to review costs agreements and that the whole thing was "officious meddling." 

The judge said: 

"It is appropriate for the court to give the receivers a ruling on [the costs agreement] because the matter of Norrish is a current matter requiring the distribution of funds." 

She found that "the Norrish costs agreement is a poorly drafted document ... replete with typographical errors, poor grammar and poor sentence construction,"  but concluded that it did not breach the Act.

The estimated cost of costing the Norrish matter is more than $120,000 and $1.5 million in legal fees has already been racked-up in a battle that Forster is fighting like a scalded cat. 

Now that the fee agreement has been held to be valid, the costs are still to be assessed by the receivers. 

Forster is seeking leave to appeal aspects of Emerton's decisions and that has been set down for September 2. 

The receivership of Hollows Lawyers has had to be extended to February 29 next year. 

Meanwhile, Forster is in VCAT fighting to retain his ticket, which the LSB has declined to renew. 

See Justinian's earlier report: Sinking of the Voyager survivors. 

Reporter: Tom Westbrook