Johnson Tiles Pty Ltd v Esso Australia Ltd

In Johnson Tiles Pty Ltd v Esso Australia Ltd, the respondents, represented by Esso, sought orders to prevent the applicants’ solicitors, Maurice Blackburn Cashman and Slater & Gordon, from enforcing 'No Win No Fee' agreements with group members. The applicants’ solicitors had been granted leave to represent all group members in a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976. Esso argued that the applicants’ solicitors were entering into fee agreements with group members that entitled them to charge an additional premium fee of 25%, referred to as an uplift fee. Esso contended that group members should be informed of this potential liability in the opt-out notice.

The court considered whether it should exercise its supervisory jurisdiction over the fee arrangements. The applicants’ solicitors had assured the court that group members would not incur a liability for costs other than taxed costs as between solicitor and client and only in accordance with orders or directions of the court. However, the court was concerned that the fee arrangements might not comply with the Act. The court found that it was appropriate to make orders enjoining the applicants’ solicitors from enforcing the 'No Win No Fee' agreements or receiving any payments pursuant to such agreements unless in accordance with an order or direction of the court. The applicants’ solicitors offered undertakings to the court to comply with the proposed injunctions, which the court accepted.

The court dismissed the respondents' Notice of Motion but ordered that the applicants’ solicitors pay the respondents' taxed costs of and incidental to the Notice of Motion. The court also directed that no part of those costs be charged directly or indirectly to the representative parties or to any group members.