VWA tells workers to SOD-off

County Court of Victoria and the serious injury business ... WorkSafe bonuses to law firms ... $5m to Lander & Rogers ... VWA loses around 80 percent of the cases it contests ... Barry Lane remembers the Salvatore Verga litigation ... Chick Lander and his SOD-off policy 

FOR holiday reading few works eclipsed the latest annual report of Chief Judge Rozenes of the County Court of Victoria. 

In relation to proceedings by the Victorian Workcover Authority in his court he said this:

"The civil jurisdiction has reported a rise in serious injury applications and there has been a significant increase in the number of finalisations due, in large part, to the concerted effort by the court to manage the ongoing pressure in the Damages and Compensation list. This is an area of the court's work which has been a cause for concern for a number of years." 

Rozenes spelled it out in detail. Over the period covered by the report: 

• 431 judgments were delivered in the court's civil jurisdiction.
• 302 of these judgments (70 percent) were in Serious Injury applications, although these initiations constitute only 26 percent (1,739 out of 6,682) of the total number of proceedings initiated in the civil jurisdiction. 
• The Victorian WorkCover Authority was a respondent to 228 serious injury applications in which judgments were delivered.
• Only 40 (or 18 percent) of these applications were dismissed.
• Plaintiffs were successful in the remaining 188 (or 82 percent) of the applications.
• For Transport Accident Commission contested applications, 77 percent of the applications were successful and 23 percent of the applications were dismissed.

The chief judge reminded us that Serious Injury adjudications must be obtained before a common law claim for damages can be instituted by litigants who have suffered personal injury in a workplace or as a transport accident.

Judges no longer need to give "detailed reasons which are as extensive and complete as the court would give on a trial of an action".

However, the continuing large number of contested Serious Injury applications has required that 15 judges be primarily allocated to this jurisdiction.

"These figures, particularly in the case of the VWA, reflect the position that has existed for many years – the VWA is a litigant which consistently loses at least 80 percent of the applications it contests. I continue to hope that in the future greater consideration is given, and a more realistic assessment of the prospects of success conducted, before litigation that is both costly and time consuming is proceeded with." 

Rozenes has allocated 15 judges to handle serious injury cases

Against that background, you can imagine my surprise when I read the piece in The Age the other day by gun investigative reporters Nick McKenzie and Richard Baker entitled WorkSafe pays  law firms bonuses to minimise victims' payouts.  

The report detailed payments of millions of dollars in bonuses to legal firms and in particular, $5 million paid to the firm Lander & Rogers over the last five years.  

Those bonuses presumably helped the firm's workcover division to pull in bigger profit margins, up to 35 percent, compared with any other department in the firm.

That's some achievement when one considers the range of "big end" of town work that the firm now does.

Leaked files from the firm also disclosed the payment of entertainment expenses of VWA executives were included in the payments.

Other questionable behaviour included becoming "relationship partners [with] targeted plaintiff firm strategies".

Commenting on the allegations, a WorkSafe spokesman said that the bonus payments were made because the defence firms get paid "significantly less than standard commercial rates". 

If that's true, one would wonder what was the benefit to the authority of negotiating reduced fees in the first place.  

The spokesman also said that the "performance incentives are designed to preserve and protect the interests of the scheme" and were only awarded to firms who "meet a range of performance criteria, which includes achieving a timely outcome for injured workers' claims for compensation and reducing the use of the courts." 

On its website, Lander & Rogers lists one of its recent achievements under the heading "WorkCover claims":

"We recently developed and launched a sophisticated online file management system for a key client. 

The system gives our client electronic access to all our files, documents and correspondence, as well as allowing them to provide instructions electronically. It also captures data according to a set of agreed KPIs, and this information is available to our client in real time via the system's reporting function. 

We are currently this client's only panel firm to offer such a service. The benefits of this system to our client include:

Access to all files and KPI reporting information at any time;

Ability to track instantly the progress of any given matter;

Complete transparency of legal work undertaken by us;

Retaining supervisory control over their files;

Ability to monitor our management of the KPIs at the click of a button;

Audit their own files, without the need to physically attend our office." 

If what Chief Judge Rozenes says is correct, there seems to be a disconnect between goals and outcomes. 

Perhaps the VWA's bonus scheme going forward requires some serious evidence-based, outcome-focussed, transparent and accountable performance evaluation.  

Given that the authority is a "model litigant", one would expect at the very least that they should be winning 80 percent of the cases they contest rather than losing them.  

*   *   *

When one drills a little deeper into the history of Lander & Rogers, it's obvious that the forensic DNA of the founding partner, Hartwell George (Chick) Lander, still courses through the veins of the firm.  

Chick was a legend in the insurance defence branch of the profession.

He had a PhD in getting claimants to "sod-off" (stonewall, obfuscate and deny), which he not only applied with great proficiency in insurance litigation but in other areas where he had an opportunity.

One of those areas was the Motor Car Traders Committee of which he was appointed chairman in 1973 when the new Motor Car Traders Act 1973 was enacted. 

He remained chairman until the mid 1980s.

Motor Car Traders Committee - slow to protect the dudded

The committee was responsible for licensing and discipline motor car traders and payment of claims from a guarantee fund established to compensate consumers who got dudded.

One claimant against the fund was a persistent chap by the name of Salvatore Verga.  He got dudded by an unlicensed trader who took $7,800.00 from him for the purchase of a used Mercedes Benz 600 to which he had no title.

He lacked title because he'd given a bad cheque to the wholesaler from whom he acquired the vehicle.  The wholesaler resorted to self-help by repoing the car from a mechanic that Verga had sent it to for repairs. 

To recover the Benz from the wholesaler Verga was required to cough up another $7,500.00.

Salvatore's first attempt to obtain compensation was refused principally on the ground that the relevant provision of the Act didn't, according to the committee, entitle a person to claim if the trader wasn't licensed.  

He obtained relief from the Supreme Court on the basis that the committee had no statutory warrant for refusing to pay on that ground - R v Motor Car Traders Committee ex parte Verga, Salvatore [1979] VicSC 83 (March 7, 1979). 

 Verga again pressed his claim with the committee, but again it was unsympathetic.  

This time around he was refused on the basis that he had not pursued his general legal rights against the rogue who sold him the car and the wholesaler who repoed it.

Verga returned to the Supreme Court and was again successful, the court finding no statutory warrant for the committee's refusal - Verga, Salvatore v Motor Car Traders Committee; R V Lander, HG; Caithness, CW & Curtis, HF (members of the Motor Car Traders Committee); ex parte Salvatore Verga [1981] VicSC 69 (February 23, 1981). 

I haven't been able to find any further reports of litigation between Verga and the committee so I assume that they rolled over and paid after their second drubbing in the Supreme Court.

One wonders how many times the committee was successful in refusing claims with these completely bogus "defences" before Mr Verga came along.

Salvatore got his costs in both cases, which would probably have been well in excess of his claim on the fund. Ditto for the committee's costs.

My editor would blow a gasket if I went into any more detail on Mr Verga's claim but may I suggest you read the judgements to get the flavour of Chick's attitude to claims and claimants particularly at pages 18 to 21 of the 1981 judgement.

It's akin to Sir Humphry's attitude to hospitals and patients - the former could be run a hell of a lot more efficiently without the latter. 

Chick has the final word after the Consumer Credit Legal Service released a report on the committee in 1985. Of criticism of the committee, Chick is reported in The Age of May 21, 1985 to have told Margaret Simons:

"Mr Lander said that the committee had been effective in regulating the industry. 'I don't know what these people are on about,' he said yesterday. 'I would have thought the fact that we don't have to revoke many licences and don't have to make big payouts from the fund was proof that we had cleaned up the industry'.

Revoking licences was a drastic step and the committee preferred to use reprimands when possible.

'We don't want to put people out of business, unless it really is called for' he said." 

Can't say fairer than that, can you? Do nothing, do nothing wrong.   

A philosophical question to consider: how does paying lawyers performance bonuses fit with the model litigant guidelines and the ordinary duty of a solicitor to give objective advice to the client? 

Finally, if the authority is of the view that the bonus scheme has been a success with its lawyers, why not extend it to its medicos as well, or would that be a bridge too far?