Court criticises 'excessive fees' in stolen wages class action

A law firm was criticised for the extensive fees it racked up in a class action that alleged Aboriginal and Torres Strait Islander workers in the Northern Territory were underpaid, or not at all, over four decades in the early to mid-1900s.

The Federal Court approved a $180 million settlement between the Commonwealth and a class action that alleged Aboriginal and Torres Strait Islander people working in the Northern Territory between June 1933 and November 1971 were not paid appropriately, or at all.

At the end of the registration process, due to end on 31 August this year, each living group member would have received a settlement sum of at least $10,000. The spouses of deceased group members will receive this share, or it could be split between descendants.

About $30 million of the settlement will be paid to the funder, LLS Fund Services, for commission and insurance costs. The Commonwealth also agreed to pay a further $15 million for Shine Lawyers’ legal costs, and another $7 million to cover the expenses for the administrator and the report by a costs assessor.

However, Chief Justice Debra Mortimer said not every part of the amounts claimed by the lawyers was “fair and reasonable”.

This included a request by Shine for an additional $8 million for an outreach program and registration process that Chief Justice Mortimer said should instead be completed by local Aboriginal and Torres Strait Islander organisations to keep costs down.

Chief Justice Mortimer also found the rates charged by Shine for work completed by law clerks was “excessive”, particularly because group member communications, opt-outs, and registration tasks could have been completed by non-legal staff.

“The higher fees charged for these tasks illustrate the failures and flaws in the method and approach adopted by Shine in the past,” Chief Justice Mortimer said in her written reasons.

The court acknowledged Shine seemed to have made a concession that the sum was high when it said it would charge the law clerks the lower rate of $200 per hour for future work on outreach and registration.

“That is, I find, a proper but belated recognition that it had overcharged for some of the work the law clerks had done, and in any event had been charging at rates that were very much at the upper limit of what might be justifiable,” Chief Justice Mortimer said.

The court said not only would this lower rate be applied to future legal costs, but it should also be applied to the administrative tasks already completed by clerks. This would see the firm receive a deduction from the settlement fund based on the $200 per hour rate.

In addition to the large volume of staff members working on this matter, Chief Justice Mortimer also pointed out that it was run out of its Brisbane offices, meaning the firm would rack up “considerable travel costs and time costs for the staff involved”.

“Overall, I consider Shine has not attempted to ensure that the method it adopted through the staff it employed on the matter, and how it conducted the proceedings, was prudent and cost-effective,” she said.

Chief Justice Mortimer said the court was not alone in its criticisms of Shine’s business model, referring to responses from the Northern Land Council (NLC) on whether local organisations would be better placed to conduct parts of the registration processes.

When asked if they would participate in this process, the NLC and the Central Land Council (CLC) said they were concerned with “reputational risks in working with Shine on this proceeding”, given the criticism that has been levelled against the firm.

“When the evidence adduced after the last-minute inquiries is taken into account, the overall approach of Shine to deploying very large numbers of people, using law clerks liberally for matters that could have been done by staff who were not legally trained, and accumulating high amounts of legal costs is not one which is easily described as fair and reasonable in relation to the interests of group members,” Chief Justice Mortimer said.

Chief Justice Mortimer said the pursuit of Shine’s business model had overshadowed the “good intentions” of the proceedings.

She added it was likely a number of Aboriginal and Torres Strait Islander people in Northern Territory communities would look at the sums paid to the lawyers, funders, and administrators and be frustrated and “likely mystified” about how city-based and non-Indigenous participants “come out with so much money”.

“That may well be compounded because of the way the outreach program has been conducted, with groups of city-based lawyers visiting towns and communities, trying to engage with people, perhaps on the first time they have ever met them, on very distressing matters, and leaving again,” the CJ said.

Shine Lawyers and the funder submitted they and the administrators should be paid before the registered group members because the court will “know how much is available to pay group members”.

Chief Justice Mortimer did not agree.

While some of the money should be paid upfront, the solicitors and funder should wait until after the registration process ends, when the court will know “how many people have registered”.

The court has directed Shine to “come back” after the outreach program has concluded in late August 2025, when the registration process has finished. Once it does, the court will assess “how much it is reasonable for it to receive as extra legal costs”.

“The court has asked the lawyers to make sure, as far as they can, that they are using local resources and organisations already working in the community because the court has found this is likely to cost less money and will also be better for group members as they will be able to talk with people and organisations they are used to.

“If the legal costs are less, there will be more money to distribute to eligible registered group members,” Chief Justice Mortimer said.

Moving forward, the court said it would examine “how faithfully and fully” Shine has adhered to the undertaking it has given to use more logistically and culturally appropriate and cost-effective methods for the outreach program.

Given they did not have this information until the second settlement hearing, Chief Justice Mortimer said she was not prepared to find against the firm that it “deliberately ignored this option so as to increase their own profits by way of legal costs”.

It was also to the firm’s credit that it adduced much of the evidence on culturally appropriate and cost-effective methods themselves.

The case is McDonald v Commonwealth of Australia [2025] FCA 380 (17 April 2025).