Quake advocates face conflict case
Lawyer Grant Shand and earthquake claims champion Bryan Staples should have told vulnerable clients they were in a joint venture and their experts were not independent, a court has heard.
The allegations were aired in the High Court at Christchurch yesterday in a case against Claims Resolution Service Ltd (CRS), previously headed by Staples, and the firm Grant Shand Barristers and Solicitors.
Plaintiff Karlie Smith was applying for leave to proceed against the defendants as a representative of a class action.
CRS acted for homeowners in their earthquake claims against insurance companies on a no-win, no-fee basis.
Most of CRS’s legal work was handled by Shand.
Smith’s lawyer Andrew Butler told Justice David Gendall CRS used a number of associated companies to provide expert reports to advise clients of their entitlements.
Inflated estimates were used to to launch high value claims, he said.
Vulnerable clients thought they were getting independent, arms-length advice and were not told of the links to Staples.
Nor were they told of the payment arrangements between Staples and Shand.
Their ‘‘joint venture’’ led to ‘‘unconscionable bargains’’ with their clients, he said. A class action would improve access to justice for the potential group and avoid unnecessary duplication. The same legal questions arose for the whole class, he said.
‘‘You may be able to find some differences but standing back they are not so material or great to tell against the making of a representative order,’’ Butler said. Andrew Barker QC, for CRS, said Smith’s case showed the fundamental problem with the class action bid. Her claim failed to explain how the alleged wrong caused her any loss. Even if the claims were inflated, that did not mean she received less than she was entitled and she was not alleging the settlement was insufficient to carry out her repairs. Barker said Smith’s complaint was essentially a professional negligence claim that was not suited to a class action.
The potential group did not have enough in common to justify a class action. The claimed losses differed significantly and the claims turned on individual circumstances, he said.
Butler said CRS’s clients were vulnerable because they had had a difficult time and could not afford lawyers. The links between CRS and Shand could have influenced litigation strategy to earn more fees and damaged the credibility of the evidence used to support claims. Several Christchurch judges had made negative comments about the quality of the evidence brought by CRS.
The hearing continues today.