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    Thursday
    Jan112007

    Spinning Clutz' internal memos

    Parts of the embarrassing Clayton Utz documents on the Rolah McCabe tobacco case are now posted ... The question is, why haven't Richard Travers and Glenn Eggleton been invited back to their old law shop as heroes? ... From our archive, January 11, 2007 


    ON Christmas eve The Sunday Age newspaper thoughtfully posted on its website the documents that formed the basis of its October scoop about an internal Clayton Utz’s investigation that found the conduct of two of its senior tobacco partners in the Rolah McCabe case amounted to serious professional misconduct. 

    The documents were censored in accordance with a settlement agreement between Fairfax newspapers and British American Tobacco’s Australian offshoots.

    The original memo to the board of Clutz from David Fagan, the senior executive partner, ran to 108 pages in the case of Richard Travers and the memo about Glenn Eggleton went to 267 pages.

    Nonetheless, the bowdlerised versions still reveal much of the findings against Eggleton and Travers, which led Fagan to recommend that they be turfed out of the partnership.

    Here are the documents.

    Since the story blew up in the final leg of 2006 Fagan has made two public statements. The first was on October 29 just after The Sunday Age published Justice denied: how lawyers set out to defeat a dying woman. (See also accompanying stories Cheated by the law and Answers given, questions asked.)

    His second statement came out on December 20 and was in response to the Victorian Attorney General Rob (Fuckin’) Hulls’ announcement that the Clutz documents were to be sent to the DPP, “so he may investigate the allegation of criminal conduct”.

    In both statements Fagan sought to characterise the internal findings of professional misconduct against Travers and Eggleton as being “preliminary” and now very much superseded by the findings of the Victorian Court of Appeal, which “exonerated” Clayton Utz partners, both current and former.

    Further, his memoranda to the board should be seen as nothing more than “preliminary opinions based on the first instance judgment that was subsequently overturned on appeal”. 

    But do the Court of Appeal findings handed down on December 6, 2002 actually overturn the internal findings of professional misconduct? If Fagan is right, then Travers and Eggleton should be invited to rejoin the firm. 

    Maybe the explanation is that the trial judge in the McCabe case, Justice Geoffrey Eames, was not as wrong as the Court of Appeal thought.

    Eames struck out the BAT defence because he found that the defendant had subverted justice by destroying documents that should have been discovered. He also found that Clayton Utz had devised a strategy by which documents were destroyed under cover of an innocent housekeeping policy.

    The appeal judges (Phillips, Batt and Buchanan JJA) laboured mightily to arrive at a dewy-eyed view that everything BAT and Clayton Utz did to deprive the plaintiff of documents had a perfectly innocent explanation, whereas Eames concluded that what they did could be attributed to a sinister explanation.

    Since then much has emerged to strengthen the sinister interpretation and make the innocent one more implausible. Trying to deny plaintiffs proper access to evidence is a chronic and global characteristic of cigarette manufacturers.

    We’ve had Judge Gladys Kessler in the Washington DC District Court accepting the evidence of Australian whistleblower Fred Gulson (ex-lawyer for WD & HO Wills) who said the industry’s legal advisers had devised a policy whose purpose “was to keep evidence out of the courts”.

    The judge went on to find that lawyers were involved in all aspects of an illegal enterprise, namely the determination to counter scientific evidence about the harmfulness of smoking, and to scuttle personal injury law suits against the industry.

    “At every stage, lawyers played an absolutely central role in the creation and perpetuation of the enterprise and the implementation of its fraudulent schemes. What a sad and disquieting chapter in the history of an honourable and otherwise courageous profession.”

    In May last year Judge Jim Curtis of the NSW Dust Diseases Tribunal ruled on discovery in the Mowbray case, saying that British American Tobacco Australia Services drafted or adopted the document retention policy for “the purposes of a fraud within the meaning of s.125 of the Evidence Act”.

    There have also been numerous applications by the BAT companies to suppress evidence and material unhelpful to its success in product liability litigation. This includes the Nicholas Cannar proceedings and the action against Slater & Gordon. 

    See Justinian’s previous reports on BATAS v Slater & Gordon.

    Slater & Gordon, which acted for Rolah McCabe, says the Clutz documents reveal an “iniquity” and the case should be reopened. S & G has told the court that the intervention of Clutz elder statesman Brian Wilson in the Victorian Court of Appeal denied their client a fair hearing.

    Ron Merkel, for Slater & Gordon, said that the Court of Appeal based its reasons on “facts which are not correct”. He went on:

    “The heart and soul of tobacco litigation in this country and the US revolves around the extent to which there was destruction of incriminating documents.”

    The Court of Appeal decision in McCabe is looking frayed. For Clutz’s Fagan to cling to it as a means of spinning away the revelation of the findings about his firm’s conduct is unconvincing.

    Contrary to Fagan’s claim, the internal Clayton Utz investigation was not purely based on Eames’ first instance findings that were subsequently overturned. There were other findings.

    The behaviour of Eggleton and Travers was examined by a Clutz committee that included Doug Jones, Nancy Milne and Chris Dale. If you look at Fagan’s board memos on Travers and Eggleton there were a number of critical issues that were not the subject of analysis or correction by the Court of Appeal.

    For instance, Fagan complained that Travers had the intention to “misuse the litigation process to take advantage” of the fact that Rolah McCabe only had months to live.

    “Travers engaged in correspondence with Slater & Gordon which no doubt was designed to frustrate the discovery proces ... It failed to address appropriate and reasonable concerns raised by Slater & Gordon as to the conduct of the litigation.”

    Fagan also cited one of the reasons for kicking Eggleton out of the law shop was that he has misled the court and his evidence was “potentially perjurious”. He downplayed his role in the McCabe litigation, did not candidly disclose his knowledge of document “retention” issues and denied that Clutz had an extensive database on smoking and health product liability issues.

    “His conduct shows a disregard for the court’s processes, and the obligations imposed on a solicitor.”

    The problem is, you can’t polish a turd. Whichever way you come at it, it doesn’t make a lot of sense to claim the Court of Appeal entirely “superseded” the findings in Fagan’s memo.

    There should be no other course than to welcome back Travers and Eggleton as richly compensated members of the Clutz partnership.

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