Some taxi and hire car industry members are furious with the proposed settlement of one of Australia’s biggest class actions. Zacharias Szumer reports.
Uber’s agreement to pay over $270 million to Australian taxi and hire car industry members was hailed as ‘historic’ and a ‘world-first’ when announced in March.
At the time, lawyers from the law firm that took on their case praised the outcome, saying “thousands of everyday Australians [had] joined together to stare down a global giant”.
But some of the 8,700 taxi owners, licensees and drivers who took part in Australia’s fifth largest class action believe their cut is “woefully unfair”.
After subtracting Maurice Blackburn’s legal costs and the litigation funder’s commission, the plaintiffs get just a fraction of what they lost when Uber illegally entered Australia over a decade ago and proceeded to decimate the taxi industry.
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Although the precise settlement details are still confidential, one plaintiff told the Victorian Supreme Court in September that most would be left with something “pretty close” to $15,000-$21,000.
Queensland Taxi Licence Owner’s Association boss Paul Scaini told the Supreme Court that such compensation was “woefully inadequate” given that Uber had directly caused his family damages of roughly $1 million.
“My family had to sell their home … I find it amazing that the legal team now considers it somehow equitable that class members be the big losers.”
Possibly cutting further into the plaintiffs’ cut, several thousand taxi and hire car industry members, who had not registered for the class action, have sought to sign on since the settlement was announced.
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Scaini told MWM in October that Maurice Blackburn, which chalked up over $38.6 million in legal fees, promised the plaintiffs justice, not “a token settlement”.
In court, he claimed the decision to settle “boiled down to the litigation funder’s desire to get their hands on $81,541,000 right now rather than have to wait for class members getting any fair and equitable results”.
Like most Australian class actions, this one was funded by an investor: Harbour, which is the largest privately owned litigation funder in the world.
The return on investment for firms like Harbour can be quite high – which is often justified by the level of financial risk.
If the case went to trial and the taxi drivers lost, Harbour wouldn’t only lose the money they’d put up; they’d also be on the hook for any costs above the amount they had insured.
This case came with “unique risks and unique scale”, Harbour’s barrister told the court in September while arguing in favour of the settlement and the investor’s 30% cut.
Harbour did not respond to MWM’s requests for comment.
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Several plaintiffs said Maurice Blackburn had previously expressed confidence in taking the case to trial and the settlement announcement took them by surprise.
Brisbane taxi owner Stephen Lacaze said the case’s principal lawyer first came “riding into town on Bradman-like batting averages and the reputation of Maurice Blackburn”.
She “made it very clear that this would be a slow, grinding process, but assured all that Maurice Blackburn had the runs on the board, expertise, and will to see it through”, Lacaze told the court in September.
Scaini said that, given Uber’s track record as a tenacious legal foe, “Everyone should have understood from the outset that this matter may drag on for 10 years or more and with relevant and related costs.”
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Rod Barton – who was boss of the Victorian Taxi and Hire Car Association when the suit was filed in 2019 – told MWM that this could have been a fool’s errand.
“We could highly likely have won the case in the court, but I 100% guarantee that Uber would’ve then appealed … because they’ve got the money”.
“We would’ve ended up in court for another five years for what? To get a similar amount of money?” he said, citing the additional costs of the case dragging out.
The case against Uber was lodged in 2019, and an additional case was added in 2020.
“A lot of the taxi people don’t really understand the complexities of all this”.
Scaini told MWM that Barton’s assessment was correct.
“Most licence owners are far too professionally unsophisticated to properly express what has happened to them”.
He also claimed that none of the lead plaintiffs were present at the negotiations that led to the settlement decision. MWM was unable to confirm this.
However, the lead plaintiffs agreed to the settlement before it was presented to the court, and some have publicly praised the outcome.
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Scaini acknowledged that “without Maurice Blackburn and Harbour, we would likely not have had the capacity to hold Uber to account”.
“Not unless somebody else perhaps took a shine to us”.
Barton told MWM that this was unlikely.
He said he “brought the case to Maurice Blackburn after spending nearly 12 months shopping it around trying to get a class action moving”.
“The reality was that nobody wanted to take it on”.
In response to the deregulation of the taxi and hire car industry, Barton established the Transport Matters Party in 2017. He served as a member of the Victorian upper house from 2018 to 2022.
He said that the funding agreement with Harbour was the best deal they could find.
“There’s no secret to this. These mobs go around, and they fund class actions what they reckon they can win”.
“They’re like professional punters, really.”
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“Everybody who joined the class action knew from the very beginning” that Harbour would take a 30% cut of any settlement, Barton said.
“I know people are very upset, but the people responsible for the loss of the licence values are the state governments, not Uber.”
Previous cases brought against state governments in Victoria, Queensland and Western Australia have all failed.
“We all wanted to win millions, but no one was ever, ever going to do it,” said Barton, adding that he lost his home when Uber wiped out his hire car business.
“I sympathise with (those objecting to the settlement) because I’m in exactly the same position.”
“I want my home back again, but I ain’t going to get it.”
“No other country, as far as I’m aware, has been able to hold Uber accountable for their illegal activity”.
Noisy minority or ‘beaten’ majority?
Scaini and Glazebrook were two of 10 objectors who attended the September hearing to protest the settlement.
“When push comes to shove, when people needed to come and mount their case, it was less than a dozen people out of eight and a half thousand,” Barton told MWM.
In response, Scaini told MWM: “There were a hell of a lot more objections. It was only that ten people chose to talk to those objections in the court.”
According to the court-appointed contradictors, 85 objections were made about the settlement itself.
Scaini said relatively few plaintiffs lodged formal objections because they were “beaten and let down” by promise of adequate compensation being snatched away.
Maurice Blackburn told MWM it was “proud to have secured a $271.8 million settlement” and that it “consider[s] the settlement to be fair and reasonable”.
DISCLOSURE: The writer’s sister is a senior associate at Maurice Blackburn. She was not involved in the Uber class action.
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Zacharias Szumer is a freelance writer from Melbourne. In addition to Michael West Media, he has written for The Monthly, Overland, Jacobin, The Quietus, The South China Morning Post and other outlets.
He was also responsible for our War Power Reforms series.