FIRMS ARE in disagreement over how best to proceed on behalf of clients affected by the equine influenza outbreak that has devastated the horseracing industry.
Hunt & Hunt partner Charles Bavin says talk of a class action against the Federal Government is premature, despite other firms saying they are preparing to run such a case on the basis that the outbreak appears to have originated in the quarantine facilities at Eastern Creek in New South Wales.
“For the benefit of all concerned we are trying to divert people away from just launching a class action. Really we are directing people to at least be aware of the alternatives available rather than just launch into legal proceedings against the government. Especially when the government is acknowledging there is a problem and putting their hand in their pocket and wanting to assist and cooperate with everyone. And then all these people want to sue them — it’s the wrong approach in our view,” Bavin said.
Hunt & Hunt has a number of clients affected by the equine influenza outbreak including breeders, and horse transport businesses.
However, Jeffrey Garrett of Queensland law firm Attwood Marshall Lawyers said the sheer size of the financial loss meant that a class action had to be considered. Garrett said he was confident his firm will have 100 people registered to take part in any class action within a week.
“I just think that the losses are going to be so staggering that why wouldn’t they look at being compensated? You know, it remains to be seen who was at fault and whether they have an action, but I think it’s almost approaching strict liability when you have something like this. We haven’t gone into the full legalities of it yet, but there’s too much loss there to ignore it.”
Sydney firm Clinch Neville Long Letherbarrow said it is also looking into a class action.
But Bavin warned that any attempt to sue the government might prevent compensation payments.
“Everyone knows what it’s like trying to sue a government. Everyone isn’t going to roll over and say ‘oh yeah, negligence. How much do you want?’ So while they are cooperating with those who have suffered loss you want to stay on side with them, not sue them and perhaps cut off any more compensation payments. They’re unlikely to pay compensation to people who are suing them. I assume the government will get legal advice saying if you pay them interim compensation they will use it to pay legal costs to sue you — what’s that going to achieve? I litigate for a living too but only in appropriate circumstances,” he said.
It is still too early to calculate the financial cost of the outbreak, but Garrett said that the $114 million offered by the government so far is nowhere near adequate which is why his clients are looking at suing.
“If the shutdown continues and the breed mares can’t go to the stallions in the Hunter Valley alone the estimates are over $1 billion [lost]. If it continues and there’s a complete shutdown on the breeding in the Hunter Valley and shutdown in Sydney and Brisbane continues, then who knows.
“It’s the ongoing, the hidden damages that are going to only really come out in the next couple of years. For instance, what’s going to happen with the Magic Millions sales on the Gold Coast in January? That’s 1,600 yearlings all vying for top dollar from international buyers. I think the Magic Millions sales grossed $120 million last January, not to mention the racing carnival with $17 million in prize money on the one day, not to mention two weeks of racing season on the Gold Coast,” he said.
However, Bavin maintained that a united approach, working in conjunction with the government was still the most appropriate course of action at this stage.
“I fear that these other firms, like a lot of lawyers, may be motivated by dollar signs at the end of the day. If it’s a court route or a compensation route you will get paid for either but I just don’t know why they are launching into this. It’s before the inquiry by Ian Callinan. There is certainly not enough information available at the moment to determine whether someone has been negligent or there’s been a breach of some duty, statutory or otherwise. I just find it quite bizarre to tell you the truth,” he said.
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