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Group members from the Hino class action will take home more from an $87 million settlement after Maurice Blackburn failed to overturn a decision to cut its legal fees by several million dollars.
The Victorian Supreme Court’s Chief Justice Richard Niall, Justice David Beach, and Justice Robert Craig have upheld an earlier decision to reduce the amount Maurice Blackburn could recover from the $87 million settlement it secured in the Hino class action in early 2025.
The plaintiff firm was originally set to receive 24.66 per cent of the settlement sum under a tiered group costs order (GCO) made by Justice Michael Osborne in December 2023. It would have meant Maurice Blackburn’s share would have sat around $21,454,000.
Noting the proceedings settled earlier than expected, and Maurice Blackburn’s internal rate of return (IRR) would have been above the 75 percentile of historical IRRs across its class action portfolio, Justice Jim Delany reduced the percentage from 24.66 to 17.932.
At that time of his settlement decision, Justice Delany said to permit Maurice Blackburn to retain the “very high rate of return” – and one that was “well outside the range to which the modelling evidence was directed – would be contrary to the interests of justice.
The GCO rate returned to Justice Delany when Maurice Blackburn discovered the modelling – used for the purpose of determining whether to vary the original GCO – contained a material error.
On this updated evidence, Justice Delany lowered the GCO percentage again to 13.523 per cent. The lowering from 24.66 per cent represented a drop of approximately $10 million.
On appeal, Maurice Blackburn argued Justice Delany made a mistake of fact and miscarried with the second variation decision.
As part of its argument, Maurice Blackburn argued that the “heart” of the error lay in Justice Delany’s first variation decision, in which he said that to leave the GCO undisturbed “would be to provide for a return which was substantially outside the contemplation of the court and outside the contemplation of Maurice Blackburn itself”.
The firm said this mistake was adopted in the second variation.
To establish Justice Delany fell into error, it had to establish he acted on a wrong principle under section 33ZDA(3) of the Supreme Court Act 1986 (Vic), which provides that a court may make an order to amend legal costs or group costs order in the interests of justice.
Chief Justice Niall, Justice Beach, and Justice Craig were not satisfied Justice Delany made a mistake of fact in finding the first variation GCO would result in an IRR that was “materially in excess of the IRRs that were modelled and within the contemplation of Maurice Blackburn and the court at the time of the original GCO application”.
They found Maurice Blackburn’s own evidence and modelling indicated the higher rate of return it ultimately achieved was outside the range realistically contemplated when the GCO was first made.
Given it could not rely on the high rate from an earlier-than-anticipated settlement sum, Justice Delany approached the figures as a balancing exercise to find an appropriate sum.
Citation: Maurice Blackburn Pty Ltd v McCoy [2026] VSCA 236.
