Warrnambool lawyers who launched a bushfire class action described by a Supreme Court judge as "fanciful" may have to pay legal costs for Powercor, expected to be as much as $250,000.
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Maddens Lawyers launched four class actions after the St Patrick's Day bushfires devastated parts of south-west Victoria in March last year.
But Justice John Dixon dismissed the Gazette fire class action in the Supreme Court earlier this month, describing it as "fanciful" and ordering that Powercor could recover its legal costs of defending the action.
The class action lead plaintiffs, Nick and Georgina Block, of Minhamite, are legally required to pay these costs.
But The Standard has reported Maddens Lawyers principal Brendan Pendergast said no costs amount had been sought by Powercor from the lead plaintiffs at this stage and "at no point will group members be liable for any legal costs".
Asked whether Powercor would request Maddens pay the cost, a spokeswoman for Powercor said in a statement: "We acknowledge the court’s decision to dismiss the Gazette class action, and Powercor’s lawyers are in contact with Maddens regarding associated costs."
However, legal and industry sources say as a result of an unsuccessful class action, the promoter of a class action - in this case Maddens Lawyers - will often indemnify or compensate the lead plaintiffs for those costs, particularly if a class action has been launched, which had little or no chance of success, such as the Gazette fire.
Industry sources say that in some class actions, the promoter of a class action such as Maddens may be required to pay millions of dollars up-front in security for costs, or prove they have the capital to absorb adverse costs orders.
It is understood that Powercor’s position in relation to the Gazette action is that Maddens should pay.
Powercor was forced to legally defend the “fanciful” class action and is likely to want the cost of mounting its expensive legal defence paid, particularly given the Supreme Court order on costs recovery from earlier this month.
Industry sources say those costs are expected to be about $250,000 but the lead plaintiff and Powercor now have an opportunity to reach an agreement as to costs. In the event that no agreement is reached, the costs will be set by the Supreme Court.
Mr Block told The Standard on Tuesday he couldn't comment on being legally responsible for the class action costs.
"I'm not a lawyer," he said.
"There's a bit of mucking around with it all. I've not been told a hell of a lot.
"There's a bit of cat and mouse going on. I'm really not in a position to comment. I'm pretty much over it all."
The Standard has contacted Mr Pendergast for comment about whether Maddens will indemnify the Blocks’ costs but had received no response last night.
A second St Patrick’s Day fire class action has also been settled, the Gnotuk/Camperdown action.
The Supreme Court was told last Friday the confidential in-principle agreement to discontinue the proceeding had been reached with the unanimous support of the small group of property owners following a meeting in Camperdown recently.
It is understood that participants have received little or no financial benefit from that class action, but no costs have been ordered.
The Terang Fire class action, involving about 180 fire victims is proceeding towards a court-ordered mediation. The action has been fixed for a trial to be heard in the Supreme Court sitting in Warrnambool in October.
The trial for the Garvoc fire class action, which involves about 40 victims, is set to be heard in Warrnambool during the Supreme Court circuit beginning October, 21.
Powercor has also requested that its line inspection contractor, Electrix, be added as a second defendant to the class action. Electrix was engaged by Powercor to undertake inspections of the pole in the years prior to its failure.
