Law firm can’t put ‘parasitic’ rival on hook for GetSwift costs
Class Actions June 15, 2018 8:56 pm By Miklos Bolza | Sydney

Squire Patton Boggs, one of the losing law firms in the GetSwift class action beauty contest, has lost again, this time in its fight to have winning firm Phi Finney McDonald pay its legal costs.

The law firm had argued that PFM was “obviously parasitic” in snatching away its initial lead plaintiff, GetSwift investor Raffaele Webb, and that it “opportunistically” lay in wait to take advantage of the investigative work Squire Patton Boggs had done in preparing for the case.

Squire Patton Boggs and Corrs Chambers Westgarth had their class actions stayed in favor of last-to-file PFM when Federal Court Justice Michael Lee ruled on May 23 that the late-comer had the best funding agreement of the three competing firms.

In dismissing the application for costs in an order Friday, Judge Lee said there was no evidence that PFM did not properly investigate the claims made against GetSwift on behalf of Webb.

“If a submission was to be put successfully that Mr Phi’s conduct was opportunistic and parasitic and that he had done no preparatory work and hence obtained some sort of unfair, substantial ‘springboard’ this should, as a matter of fairness, have been put to him,” Judge Lee wrote, referring to PFM managing director Ben Phi, a former Slater & Gordon partner.

Judge Lee added that it was “somewhat odd” that the successful firm should be on the hook for the costs of the stayed proceedings.

Responsibility for the expenses arising from the legal work ahead of Judge Lee’s ruling to stay two of the three cases fell on all three parties, he said.

Both Squire Patton Boggs and Corrs Chambers are appealing Judge Lee’s decision. A Full Court hearing is expected in August.

The company at the heart of the legal dispute, GetSwift, and its managing director, Joel Macdonald, are alleged to have breached their continuous disclosure obligations and misled shareholders with overhyped announcements about business contracts.

GetSwift is instructed by Quinn Emanuel Urquhart & Sullivan.

The PFM class action is Raffaelle Webb v GetSwift Ltd ACN 604 611 556 & Anor; the Squire Patton Boggs class action is Dwayne Cavan Shanahan Perera v GetSwift Ltd & Anor; and the Corrs Chambers Westgarth class action is Shaun McTaggart & Anor v GetSwift Ltd & Ors.

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Miklos Bolza

Miklos Bolza has been a journalist for three years. He has written for a variety of publications, including NZ Lawyer, HRD Australia, and Australian Broker. He is currently the Sydney court reporter for Lawyerly.