Stanford v DePuy International Pty Ltd

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WIGNEY J: 1 On 29 June 2016, the Court approved the settlement of this representative proceeding. The procedural history and terms of that settlement are set out in earlier judgments: see in particular Stanford v DePuy International Ltd (No 6) [2016] FCA 1452 (Stanford No 6). The proceeding concerned allegedly defective medical devices, known generally as ASR implants, which were used in hip replacement or resurfacing surgery. The proceeding was settled for a sum of $250 million (plus interest) on 31 March 2016. The settlement sum was to be paid and applied pursuant to a settlement scheme managed by two joint administrators, Maurice Blackburn Pty Ltd and Shine Lawyers Pty Ltd (collectively the administrators). Maurice Blackburn and Shine are law firms and had acted for the applicants in the substantive proceeding. 2 The nature of the proceeding and the terms of the settlement and settlement scheme were such that it was necessary for the settlement scheme to be administered over several years. It continues to be administered. The parties were granted liberty to apply to the Court for the purpose of seeking orders consequential to the settlement scheme. The settlement scheme itself also provided that the administrators could approach the Court for directions. Since 2016, the administrators have had the matter relisted on several occasions for the purposes of applying for consequential orders, reporting to the Court in respect of the administration of the scheme and seeking the Court's approval in respect of the payment of administration costs, including legal costs and disbursements incurred by them. Those applications have, for the most part, been relatively uncontentious and unopposed. 3 By amended interlocutory application dated 12 May 2023, Maurice Blackburn, in its capacity as one of the administrators, applied for various orders relating to the administration. Those orders included an order which effected the removal of Shine as joint administrator, an order amending the settlement scheme in a number of respects and an order which approved the payment of specified amounts in respect of administration costs to, inter alia, Maurice Blackburn and Shine. The administration costs which are the subject of the latter orders are referrable to the period from approximately May 2020 to October 2021. 4 The orders removing Shine as joint administrator and amending the settlement scheme were unopposed, uncontentious, and supported by the evidence adduced by the administrators. The same could not be said of the order in respect of the payment of administration costs. The respondents to the substantive proceeding, DePuy International Ltd and Johnson & Johnson Medical Pty Ltd, appeared at the initial hearing of the interlocutory application and sought to make submissions concerning the proposed approval and payment of administrative costs. That course was initially opposed by the administrators, who contended that the respondents did not have standing to be heard in respect of the application. 5 The orders removing Shine as joint administrator and amending the settlement scheme were eventually made by consent on 6 June 2023. Maurice Blackburn is accordingly now the sole administrator. The remaining issues for determination are whether the respondents have standing to oppose, or make submissions concerning, the orders relating to the payment of administrative costs and whether the costs claimed by the administrators should be approved.

RELEVANT BACKGROUND AND CONTEXT 6 To understand the administrator's application for the payment of administrative costs and the respondents' objection to it, it is necessary to briefly refer to the nature of the substantive proceeding, the terms of settlement, the terms of the settlement scheme, the current state of the administration of the settlement scheme and previous approvals of administrative costs.

Nature of the proceeding and settlement 7 As has already been noted, the substantive proceeding concerned allegedly defective medical devices, known as ASR implants, which were used in hip replacement or resurfacing surgery. The applicants commenced the representative proceeding both in their own right and on behalf of other persons in Australia who, like them, had had ASR implants surgically implanted. They claimed that the respondents had contravened the Trade Practices Act 1974 (Cth) because the ASR implants were not reasonably fit for the purpose for which they were required, were not of merchantable quality, and were not safe, such as persons generally were entitled to expect. They also alleged that DePuy and Johnson & Johnson Medical were negligent in designing, manufacturing, and supplying the ASR implants. They sought compensation for loss and damage caused by the manufacture and supply of the ASR implants. 8 While the matter proceeded to trial, it was eventually settled pursuant to a settlement deed and settlement scheme. In broad terms, the settlement involved the respondents paying a settlement sum of $250 million plus interest. The settlement funds were to be paid and distributed pursuant to a settlement scheme managed by Maurice Blackburn and Shine as joint administrators. The settlement was approved by the Court on 29 June 2016, with detailed reasons published on 1 December 2016: Stanford No 6.

The settlement scheme in summary 9 The settlement scheme was detailed and complex. That was inevitable given the nature of the proceeding and the settlement. It was certainly not as simple as dividing up and paying each group member a share of the settlement sum. Indeed, it was clear that the settlement scheme would need to operate over a relatively lengthy period and would require significant and substantial work to be performed by or on behalf of the administrators. 10 The settlement scheme is described in some detail in Stanford No 6 at [48]-[65]. For present purposes it suffices to note the following features of the scheme. 11 First, to participate in the settlement, group members were required to register their compensation claims with the administrators within certain specified timeframes. 12 Second, and more importantly, once a group member registered his or her claim, it was necessary for the administrators to assess the group member's eligibility for compensation. That was necessary because not all group members were eligible for compensation. To be eligible to claim compensation, a registered group member had to satisfy the following criteria: first, they had been implanted with an ASR implant in Australia; second, they had undergone either an actual ASR revision or a deemed ASR revision (as defined) within 13 years of their primary surgery; third, the ASR revision was not an ineligible revision (as defined); and fourth, the group member had not opted out of the proceeding. A revision effectively involved removal of the ASR implant. A deemed revision occurred in circumstances where a revision was necessary but was considered to be inadvisable for medical reasons. An ineligible revision was one which was not caused by or attributable to the implant itself. 13 Two important points about the process of determining eligibility should be emphasised. 14 First, determining eligibility undoubtedly involved considerable work by or on behalf of the administrators. Among other things, it required the preparation of eligibility books which contained all relevant information concerning a group member's eligibility for compensation. 15 Second, the terms of the eligibility criteria meant that the scheme was required to remain in operation for several years. That was because some group members may not have been eligible at the time of settlement because, while they may have had an ASR implant, they may not yet have had a revision. They would, however, potentially become eligible so long as they had a revision within the 13-year cut-off period based on the date of their implant. At the time the settlement was approved, it was not known how many eligible group members there may be. The current figure for eligible group members is 1,658. The current expectation is that the scheme can be effectively wound up in or shortly after March 2024 because there will be no more group members who may become eligible. 16 Third, eligible group members were able to elect between accepting a "fast track resolution" of their claim, or having the quantum of their compensation claim assessed on an individual basis. If a member chose to accept the fast track settlement, they were entitled to a lump sum payment of $55,000, or $110,000 if they had two implants and two revisions. If a member chose the assessment method, they were required to provide information which would enable their compensable loss or damage to be assessed, such as contemporaneous medical records, tax returns, and invoices for related expenses. That information was to be compiled into a claim book which would then be provided to an assessor who was chosen from a panel of senior lawyers. The assessor would then assess the quantum of the claim according to the Competition and Consumer Act 2010 (Cth). The scheme provided for a review process in respect of assessed claims. 17 Five points should be emphasised concerning the alternative claims resolution processes. 18 First, the process involved considerable work on the part of the administrators. That work included determining which track each eligible group member proposed to take, a task which sometimes required engagement with family members or guardians. 19 Second the process of compiling claim books and engaging assessors also required considerable work. 20 Third, and more importantly for present purposes, there was initially a considerable degree of uncertainty as to how many members would elect to have their claims assessed and considerable uncertainty as to the size and extent of those claims. Given that uncertainty, the applicants initially retained an actuary to advise in respect of cash flows, including administration costs. The applicants relied on the actuary's evidence in support of their application for approval of the settlement. More will be said later concerning the actuary's estimation or assumption concerning administration costs. 21 Fourth, the settlement scheme also required attention to be given to liens held by Medicare and private health insurers in respect of certain medical expenses incurred by eligible group members. The work involved in negotiating and resolving liens was divided between the respondents and the administrators. 22 Fifth, given the uncertainty as to how many eligible group members there may be, what proportion of those eligible group members would elect for a fast track payment or otherwise have their claims assessed, and how large those assessed claims may be, the scheme had to provide for the management of the settlement sum by the administrators, including the order and manner in which the settlement sum was to be applied. It should be noted in that context that it was far from clear at the outset that the fund created by the payment of the settlement sum would be sufficient to pay in full all assessed claims and fast track claims. Indeed, many group members opposed the settlement on the basis that the settlement sum was, in their view, unlikely to be sufficient to meet all group members' claims in full. The management of the fund in those circumstances required the administrators to hold the fund on trust, invest it where appropriate, make interim payments and adjustments, and generally manage the fund in such a way as to ensure that the compensation and fast track payments were made fairly and equitably. 23 As for the order in which the settlement sum was to be paid out, the settlement scheme provided the following order of payments: first, the payment of the approved legal costs of the substantive proceeding; second, reimbursement payments to the representative applicants, though those were not significant sums; third, the payment of the costs of administering the scheme; and fourth, payments, comprising fast track and assessed compensation payments, to eligible group members. 24 Returning to the key clauses of the settlement scheme, and importantly for present purposes, the settlement scheme provided for the payment of costs associated with management of the scheme. Clauses 13.2, 13.3 and 13.4 separately provided for the calculation and payment of the costs of preparing eligibility and claim books and the fees charged by claims and review assessors. It is unnecessary for present purposes to consider those clauses. That is because there is essentially no issue and no dispute concerning the administrators' claims in respect of the costs incurred in relation to the preparation of eligibility and claims books. It is, however, important to note that those costs were essentially fixed by reference to specified tasks. They were not at large and were not the subject of hourly rates or otherwise time costed. That perhaps explains why the quantification of those costs has not been contentious. 25 The same cannot be said concerning administration costs as provided by clause 13.1. 26 The term "Administration Costs" is defined in the scheme dictionary in the following broad terms: The legal costs and disbursements incurred by the Applicants, Maurice Blackburn and/or Shine (or their delegates or agents) in drafting, preparing, negotiating, implementing, facilitating, giving effect to, or applying for the Approval Order, this Deed, the Settlement Scheme or the Settlement generally, and calculated on a "solicitor and own client" basis. 27 Clause 13.1 of the settlement scheme provides as follows in respect of the payment of administration costs: 13.1 Payment of Administration Costs Subject to the other provisions of this clause 13, Administration Costs are to be paid: (a) to the Administrators (and their delegates, DBH and LAM), on a "solicitor and own client" basis; (b) in the first instance, from interest earned on the Settlement Sum after it is paid by the Respondents pursuant to clause 3.1 of the Deed, and to the extent that the interest earned during the current financial year is insufficient to pay Administration Costs, from the remainder of the Settlement Sum; (c) in such amounts as are approved by the Court from time to time during the implementation of this Settlement Scheme; and (d) at the following rates or at such other rates as are approved by the Court from time to time: Role Hourly rate (excluding GST) Principal or Partner $790 Special Counsel $720 Senior Associate $610 Associate $540 Lawyer $440 Graduate Lawyer / Trainee Lawyer / Articled Clerk $350 Paralegal / Legal Clerk / Law Clerk $320 Litigation Technology Consultant $240

28 The administration costs claimed pursuant to clause 13.1 of the settlement scheme will be referred to in these reasons as general administration costs so as to avoid confusion with the costs claimed pursuant to clauses 13.2, 13.3 and 13.4. 29 It should also be emphasised in this context, though it is to an extent stating the obvious, that the amount of the general administration costs paid to the administrators is a matter of some sensitivity and importance. That is because the more money that is paid to the administrators for administration costs, the less that is available to be paid to each of the eligible group members to compensate them for the loss and injury they suffered as a result of their ASR implants and their removal. 30 Finally, it is important to note that clause 14.1 of the settlement scheme relevantly provides that where the administrators consider that "it is appropriate for the Court to give directions regarding an issue concerning the implementation or administration of this Settlement Scheme … the Administrators may approach the Court for directions and in doing so the Administrators are not obligated to notify any of the Group Members".

The current state of the settlement scheme 31 Since settlement, the administrators have approached the Court periodically to provide an update or report on the management of the settlement scheme. The administrators have also periodically sought the Court's approval in respect of the payment of administration costs, including general administration costs. It is unnecessary for present purposes to detail the reports that have been provided to the Court save as to briefly note the following points in respect of the state of the settlement scheme as of March 2023. The position in respect of administration costs will be dealt with separately. 32 First, as previously noted, the scheme is nearing its conclusion. The effective cut-off date for new claims was 30 June 2023. Only a very small number of new registrations were expected. 33 Second, the administrators have paid a total of $178.41 million to eligible group members out of the available settlement funds. The administrators have also paid $8.38 million to third party holders of liens. The credit balance of the administrator's bank accounts was $15.45 million. 34 Third, 1,633 eligible group members had received compensation payments. As of February 2023, there were only 14 group members whose claims were ongoing and who had not yet received any payment. 35 Fourth, contrary to the concerns and fears that existed at the time the settlement was approved, the settlement sum will clearly be sufficient to meet all fast track and assessed claims by eligible group members. Indeed, in June 2021, the administrators sought and obtained actuarial advice which enabled them to make "top up" payments to eligible group members. Eligible group members have received 117.5 cents for every dollar of compensation they have been assessed as eligible to receive under the terms of the settlement scheme. Fast track group members have received $9,625 per revision over and above the $55,000 fast track payment. It is anticipated that a further top up payment will be able to be made in the near future. 36 Fifth, the main reason that the settlement sum has turned out to be more than sufficient to meet the claims of eligible group members is because a far higher than expected number of group members have elected to take the fast track option.

Original estimate of the overall costs of administering the scheme 37 As discussed earlier, the applicants relied on evidence from an actuary, Mr Geoff Atkins, in support of their application for approval of the settlement. Mr Atkins' evidence primarily concerned his opinion as to whether the settlement sum would suffice to pay the claims of all eligible group members based primarily on his actuarial assessment of the likely number of eligible group members and the likely quantum of their combined claims, both fast track and assessed. Mr Atkins' actuarial assessment, expressed in simple terms, was that eligible claimants would ultimately receive almost 70 percent of the compensation assessed as payable to them under the scheme. 38 In assessing whether the settlement sum was likely to be enough to pay all group members claims, Mr Atkins also prepared a financial model of the distribution of the settlement fund that provided a forecast of future cash flows into and out of the fund. As would be expected, that model included estimates or assumptions of cash outflows which included, relevantly, administration costs. Mr Atkins' initial estimate in respect of the settlement scheme's general administration costs over the life of the scheme was $5.85 million. Mr Atkins' model also contained projections in respect of the general administration costs likely to be incurred during each year of the administration of the scheme. In a subsequent letter, however, Mr Atkins acknowledged that his estimate in respect of general administration costs was "broad-brush and … not based on any business plans or budgets provided by Maurice Blackburn". He also stated that the "actual fund administration expenses cannot be known with certainty due to the uncertain nature of the scheme both in terms of the number of applications to the scheme and the uncertain nature of the costs that will be incurred". 39 At the time Mr Atkins was retained and the parties approached the Court to approve the settlement, Maurice Blackburn and Shine acted for the applicants. The proposed settlement scheme provided, however, that Maurice Blackburn and Shine would be the joint administrators. It was therefore clearly envisaged that a proportion of the administration costs would be paid to Maurice Blackburn and Shine. It is regrettable, in those circumstances, that Mr Atkins' estimate of general administration costs was "broad-brush" and based on inadequate or incomplete information. Plainly more attention should have been given to the providing an accurate and reliable estimate of the likely costs of administering the scheme. Among other things, Maurice Blackburn and Shine should have provided business plans and budgets to Mr Atkins, as they plainly could have, so that he was able to give a more reliable estimate of the likely costs, particularly as his estimate was factored into his cashflow model and actuarial assessment. It is no answer to that criticism to simply say that the general administration expenses could not be known with certainty at the time, though it may be accepted that the criticism does involve an element of hindsight analysis. 40 It should also perhaps be noted that Mr Atkins' cash flow model also factored into the equation an estimate of $19,776,000 for expenses associated with the assessment of group members' individual claims. That estimate was based in part on an estimate that only about 20 percent of the group members would elect to take the "fast track" option, which did not involve any assessment of the group member's specific claims. The estimated total cost of administering the scheme (general administrative costs and administrative costs pursuant to clauses 13.2, 13.3 and 13.4) was therefore approximately $26 million. 41 As will be seen, one of the key points raised by the respondents in their submissions concerning the current application for approval of the payment of general administration costs concerns what the respondents contend is a significant departure from Mr Atkins' estimates in respect of administration costs. That was also an issue that the Court raised in the context of the first application concerning administration costs in 2017. It is appropriate, in those circumstances, to briefly consider what has occurred in the context of the previous applications for the approval of administration costs.

Previous applications for approval of administration costs 42 As previously noted, the administrators approached the Court each year between 2016 to 2020 to seek approval for the payment of specified administration costs. On each occasion, the application was supported by a report prepared by an independent expert costs assessor, Mr Ross Nicholas, and affidavit evidence from solicitors who were responsible for the administration of the scheme at their respective law firms; Mr Julian Schimmel from Maurice Blackburn and Ms Janice Saddler from Shine. On each occasion the respondents were served with the application and supporting evidence. The current application is the only application in respect of which the respondents have made any substantive submissions.

The 2017 approval application - general administrative costs of $3,451,166 43 Mr Atkins' cash flow model estimated that the general administration costs incurred as of June 2017 would be $2.25 million. That estimate included the costs of the settlement approval application. 44 In June 2017, the administrators applied to be joined as applicants in the proceeding for the purpose of seeking certain orders. Those orders included an order that the Court approve the payment to them of general administrative costs for the period from approximately June 2016 to March 2017 totalling $3,451,166.66, comprising professional or legal fees of $2,834,004.53 and disbursements of $617,162.63. 45 The respondents appeared at the hearing of that application but did not oppose the application or make any substantive submissions concerning the quantum of the general administration costs. The application was supported by affidavit evidence of Mr Schimmel and Ms Saddler and an expert report of Mr Nicholas. 46 When the application first came on for hearing, I expressed considerable disquiet concerning the very large amount of administrative costs and disbursements being claimed by the administrators and the adequacy of the evidence that the administrators relied on in support of those amounts. I directed the administrators to file further evidence, including a supplementary report from Mr Nicholas, which addressed those queries and concerns. That further evidence was in due course provided. 47 I ultimately approved the payment of the administrative costs sought by the administrators: Stanford v DePuy International Ltd (No 7) [2017] FCA 748 (Stanford No 7). The following points should be noted concerning the evidence relied on by the administrators and the reasons given for approving the quantum of the administrative costs on that occasion. 48 First, the principles that should be applied in determining whether the administrative costs sought by the administrators were summarised in the following terms (Stanford No 7 at [11]-[13]): In directing the filing of further evidence concerning the administration costs, I was mindful of two relevant considerations. First, in assessing the reasonableness of costs and disbursements incurred in administering a settlement scheme, the court should generally apply the same principles that are applied in approving legal costs and disbursements in the context of a settlement approval. That approach appears to have been adopted in the Supreme Court of Victoria: see Rowe v Ausnet Electricity Services Pty Limited (Ruling No 7) [2016] VSC 424. In short terms, in assessing the fairness and reasonableness of the legal costs component of a proposed settlement, the Court should take a pragmatic approach, seeking some independent verification of the reasonableness of the costs claimed, but not imposing an onerous or exhaustive task upon an applicant: Courtney v Medtel Pty Limited (No 5) [2004] FCA 1406; (2004) 212 ALR 311. The Court's task is not to itself perform a taxation or assessment of the fees. Rather, the Court should consider whether the fees and disbursements are unreasonable in any respect, having regard to, amongst other things, the nature of the work performed, the time taken to perform the work, the seniority of the persons undertaking the work and the appropriateness of the charge-out rates of those persons: Modtech Engineering Pty Ltd v GPT Management Holdings Limited [2013] FCA 626 at [32]. The Court should not approve an amount that is disproportionate, but such an assessment cannot be made on the simplistic basis that the costs claimed are high in absolute terms or high as a percentage of the total recovery: Foley v Gay [2016] FCA 273 at [23]-[24]. Disproportionate in the present context may be taken to mean disproportionate to the size and complexity of the scheme being administered. Second, and flowing from the first consideration, there is a need for an appropriate balance in relation to the level of information required by the Court in relation to the approval of the administrators' legal costs and the costs associated with the provision of that information: see Re Medforce Healthcare Services Limited in liq [2001] 3 NZLR 145. The Court is in a sense placed in a "Catch-22" situation. The Court is, of course, concerned to ensure that the administrators' costs are reasonably to be kept to a minimum. Yet if further information is sought by the Court to substantiate an application for the approval of the costs incurred, the effect may simply be to increase the costs. 49 Second, it was readily apparent that the general administrative costs sought well exceeded Mr Atkins' "broad-brush" estimate of the administrative costs likely to have been incurred as at June 2017. I accepted, however, that one of the reasons why the administration costs as of June 2017 exceeded Mr Atkins' estimate was that Mr Atkins had underestimated the costs of the approval application, which turned out to be far more difficult and complex than Mr Atkins had envisaged: Stanford No 7 at [15]. 50 Third, I otherwise largely accepted the explanation given by Mr Schimmel and Ms Saddler as to why the administration costs in the first year were unexpectedly high. That explanation was, in summary, that considerable "upfront" costs had been incurred in setting up systems, processes and information technology to deal with the administration of the fund going forward, and that there had been an unexpectedly large number of inquiries from group members in relation to the settlement approval and the claims registration process: Stanford No 7 at [17]. Both Mr Schimmel and Ms Saddler said that they expected that many of the upfront expenses would not be replicated in future years, that the number of inquiries would reduce, and that the costs and expenses of administering the scheme would therefore taper off. 51 Fourth, I also accepted the evidence which indicated that, even though the general administrative costs were likely to exceed Mr Atkins' estimate of $5.85 million, it was equally likely that the expenses associated with assessing group member claims were likely to be significantly lower than the $19 million estimated by Mr Atkins: Stanford No 7 at [18]. That was because the evidence concerning the operation of the scheme during its first year revealed that a much higher proportion of group members were electing to take the fast track option. It followed that the overall expenses of administering the scheme were unlikely to exceed Mr Atkins' estimate of $26 million: Stanford No 7 at [19]. 52 Fifth, while noting that the evidence that had initially been relied on to support the approval application was deficient, I accepted that the supplementary evidence adduced by the administrators had remedied those deficiencies: Stanford No 7 at [24]-[27]. While I expressed concern at the size of the fees and costs that had been incurred, and the possibility that the settlement fund may turn out to be insufficient to fully compensate all group members, I nevertheless accepted that the evidence established that the fees and disbursements incurred by the administrators were fair and reasonable. I concluded as follows (Stanford No 7 at [28]): Despite those ongoing concerns, however, I am satisfied from all the material that has been put before the Court that none of the fees or disbursements in respect of which approval is sought were unnecessarily incurred. Both Mr Schimmel and Ms Saddler have provided candid and fulsome evidence concerning the work performed by their respective firms to date. Perhaps more importantly, Mr Nicholas' expert reports support the reasonableness of the costs and disbursements. Whilst his initial report may not have provided sufficient detail about certain aspects of the costs and disbursements, and certain aspects of his methodology, such deficiencies as existed have been remedied in his supplementary report. It is now readily apparent that the methodology adopted by Mr Nicholas was commercial and reasonable. The material sought and analysed by him was sufficient. His reasoning and analysis is clear and transparent. He has manifestly brought his considerable experience to bear in expressing his expert opinions in relation to the fees and disbursements. There is no reason to reject his opinions.

The 2018 approval application - general administrative costs of $5,040,630 53 Mr Atkins' model estimated that the additional general administrative costs for the second full year of administration of the scheme as of June 2018 would be $1,000,000. 54 In June 2018, the administrators applied for an order that the Court approve the payment to them of general administrative costs for the period from approximately February 2017 to April 2018 totalling $5,040,630, comprising legal fees of $4,602,549 and disbursements of $438,081. The respondents appeared at the hearing of that application but did not oppose it or make any substantive submissions. The application was supported by affidavit evidence of Mr Schimmel and Ms Saddler and an expert report of Mr Nicholas. 55 The general administrative costs claimed by the administrators for this period again considerably exceeded Mr Atkins' estimate in respect of the roughly comparable period. 56 Mr Schimmel's affidavit gave a detailed explanation of the administrative work which had been done during the relevant period. That work included: working with an actuary to determine what "first tranche" amounts could be paid to group members who had had their claims assessed; undertaking eligibility assessments; developing the scheme's online portal; processing payments to group members; and attending to inquiries and providing updates to group members. Mr Schimmel also gave an explanation as to why the administration costs had been greater than he had anticipated. That explanation included that: fees associated with processing individual assessments during the period had been higher than expected because of a "concerted and intensive effort" to finalise the first 100 assessments; fees associated with ongoing eligibility determinations had been higher than anticipated because many of those determinations were "relatively complex and therefore time consuming"; and fees associated with processing payments to group members were higher than anticipated. 57 In his expert report, Mr Nicholas expressed the opinion that the administration fees ultimately claimed by the administrators were fair and reasonable. In preparing his report, Mr Nicholas adopted the methodology which had been implicitly, if not explicitly, approved in Stanford No 7. Mr Nicholas' opinion was not challenged and there was no reason to doubt or discount it. 58 The application for payment of administrative costs was granted.

The 2019 approval application - general administrative costs of $4,106,471 59 Mr Atkins' model estimated that the additional general administrative costs for the third full year of administration of the scheme as of June 2019 would be $800,000. 60 In June 2019, the administrators applied for an order that the Court approve the payment to them of general administrative costs for the period from approximately April 2018 to March 2019 totalling $4,106,471.88, comprising legal fees of $2,826,674.06 and disbursements of $1,279,797.82. The application was again supported by affidavit evidence of Mr Schimmel and Ms Saddler and an expert report of Mr Nicholas. The respondents appeared at the hearing of that application but did not oppose it or make any substantive submissions. 61 Mr Schimmel's affidavit again included a relatively detailed account of the key areas of general administrative work which had been carried out in the relevant period. That work included: continuing eligibility assessments; processing of individual assessments; management of reviews of individual assessments requested by group members; managing claims of persons under a legal incapacity; processing payments and providing updates to group members. Mr Schimmel expressed the view that the administration costs had "largely tracked as the Administrators had anticipated as at the time of the June 2018 update", that the administration costs under clause 13.1 had "declined significantly in comparison to the previous 12 months for which approval was sought in June 2018", and that he expected those costs to "stabilise at a modest level" each month beyond June 2020. 62 Mr Schimmel estimated that the future administration costs up to the time the scheme was wound up in March 2024 would be between $2.6 and $2.9 million. Considered together with the administration costs already approved and paid, the total general administration costs for the scheme would therefore be $13,173,228 (assuming the higher estimate for future costs). Mr Schimmel also estimated that the total costs of administering the scheme - the sum of the clause 13.1 general administration costs and the clause 13.2, 13.3 and 13.4 costs or expenses - at the conclusion of the administration would be between $22.8 million and $23.3 million. 63 Mr Nicholas's expert report, which was in a similar format to his earlier reports and adopted the same methodology, again supported the conclusions that the administration costs claimed by the administrators were fair and reasonable. There was again no challenge to Mr Nicholas's opinion and no apparent basis upon which to doubt it. 64 The application for payment of administrative costs for this period was granted.

The 2020 approval application - general administrative costs of $1,992,317 65 Mr Atkins' model estimated that the additional general administrative costs for the fourth full year of administration of the scheme as at June 2020 would be $600,000. 66 In June 2020, the administrators applied for an order that the Court approve the payment to them of general administrative costs for the period from approximately March 2019 to May 2020 totalling $1,992,317, comprising legal fees of $1,467,323 and disbursements of $524,994. The application was again supported by affidavit evidence of Mr Schimmel and Ms Saddler and an expert report of Mr Nicholas. The respondents appeared at the hearing of that application but did not oppose it or make any substantive submissions. 67 In his affidavit, Mr Schimmel summarised the general administrative work which had been carried out in the relevant period as including: continuing eligibility assessments; processing claims assessments; managing reviews; managing claims by persons under a legal incapacity; auditing data to facilitate actuarial advice about further payments; processing payments; and providing updates to group members. Mr Schimmel noted that there had been a significant reduction in monthly administration costs during the year. 68 Mr Nicholas's expert report again supported the conclusions that the general administration costs claimed by the administrators were fair and reasonable. There was again no basis to doubt Mr Nicholas's report, which had adopted a similar methodology to his previous reports. 69 The application for payment of administrative costs for this period was granted.

THE CURRENT APPLICATION FOR APPROVAL OF ADMINSTRATIVE COSTS 70 The current application for the approval of general administrative costs concerns administrative costs for the period May 2020 to October 2021. 71 Mr Atkins' model estimated that the additional general administrative costs for the fifth full year of administration of the scheme would be $400,000. The total general administrative costs as of June 2021 in Mr Atkins' model was $5,050,000. 72 The order sought by the administrator is to the effect that it pay general administrative costs under clause 13.1 of the settlement scheme for the relevant period totalling $1,558,369.64 comprising professional or legal fees of $1,292,237.20, and disbursements of $266,132.44. If the payment of those general administrative costs is approved, the total general administrative costs paid to the administrators for the period to October 2021 would be $15,882,822.74.

Jurisdiction and standing 73 The issue concerning the Court's jurisdiction to make the orders sought by the administrator and the respondents' standing to appear and oppose the making of those orders may be dealt with shortly. That is because the parties agreed that the Court had jurisdiction to make orders sought pursuant to s 33V(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and the administrator ultimately did not press its initial objection concerning the respondents' standing. 74 As for jurisdiction, in my view the Court has jurisdiction to entertain and determine the application pursuant to s 33V(2) of the FCA Act. That subsection provides that, if the Court approves a settlement of a representative proceeding, it may "make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court". When the Court approved the settlement in this matter, it ordered that the settlement was approved on the terms set out in, in alia, the settlement scheme. While the Court ordered that the proceeding be dismissed, it also ordered that the dismissal of the proceeding was without prejudice to the parties' ability to relist the matter for the purpose of seeking orders consequential to the settlement scheme. Clause 14.1 of the settlement scheme also provided that "where it is appropriate for the Court to give directions regarding an issue concerning the implementation or administration of the settlement scheme", the administrators may approach the Court for directions without being obliged to notify group members. As mentioned earlier in these reasons, the administrators were also joined as applicants to the proceeding in June 2017 for the limited purpose of relisting the matter for the purpose of seeking orders consequential to the settlement scheme as amended from time to time. The order sought by the administrator concerning administration costs is plainly an order consequential to the settlement scheme and concerns the distribution of money paid under the settlement. It therefore falls within s 33V(2) of the FCA Act. 75 As for standing, in my view the respondents have standing to appear and oppose or make submissions concerning the administrators' application. The respondents remain parties to the proceeding. The orders made upon settlement of the matter granted liberty to all parties, not just the administrators, to relist the matter for the purpose of seeking orders consequential to the settlement scheme. The respondents continue to have a role, albeit a fairly limited one, in respect of the administration of the scheme and have a legitimate interest in ensuring that the settlement funds are paid out in accordance with the settlement scheme. The administrators appear to have acknowledged that the respondents have an interest in the subject matter of the application. That is presumably why, as with all past applications regarding costs, the administrators served the respondents with the interlocutory application and supporting evidence. The administrators did not object to the respondents' appearance at the hearing of any of the previous interlocutory applications. 76 In any event, even if the respondents did not, strictly speaking, have standing to appear and oppose the application, I would in any event have granted leave to the respondents to make submissions. That is because there would otherwise have been no contradictor. It was also clear that the Court would be assisted by the respondents' input in respect of the applications. As events transpired, the Court was assisted by the respondents' submissions.

Supporting evidence 77 In support of its application in respect of the payment of general and administration costs, the administrator relied on two affidavits sworn by Mr Schimmel and an expert report authored by Mr Nicholas. Some reliance was also placed on the administrators' report prepared by Mr Schimmel in respect of the relevant period. 78 It is unnecessary to deal at length with Mr Schimmel's evidence concerning the administrative costs. Much of it was responsive to actual or perceived criticisms levelled at him, or the administrators generally, by the respondents in their evidence and submissions. Those criticisms included that: the administration costs had exceeded Mr Atkins' estimate; that the administrators had not provided an updated estimate of administration costs once it became apparent that the costs exceeded Mr Atkins' estimate; and that the administrators had failed to provide full and frank information to the Court in support of its administration costs applications. Those criticisms are addressed in more detail later when addressing the question whether the administration costs claimed by the administrator should be paid. 79 In short summary, Mr Schimmel's evidence was that at the time of the settlement approval application it was not possible to reliably predict the cost of administering the scheme. He considered that the estimate concerning administration costs in Mr Atkin's cash flow model was no more than, and was never intended to be anything more than, a "crude estimate" of the administration costs. He advised the Court as much in his affidavit which was filed in support of the June 2019 administration costs application. It was for this reason that he did not consider that it was necessary for him to, or that it would assist the Court for him to, "benchmark" the administration costs in fact incurred against Mr Atkins' estimate. With the benefit of hindsight, and without in any way being critical of Mr Atkins, Mr Schimmel also contended that Mr Atkins' estimate concerning administration costs was inaccurate and that Mr Atkins should have, but did not, take into account a range of matters that impacted the real cost of administering the scheme. 80 Mr Schimmel took issue with the suggestion that the administrators had not provided sufficient information to the Court in respect of its administration costs applications and referred to the detailed information in the affidavits he had previously sworn in support of the administrators' applications. He also pointed out that in his affidavit filed in support of the June 2019 costs application, he had estimated that general administration costs for the period April 2019 to March 2024 would be between $2.6 million and $2.9 million. Mr Schimmel's current estimate is that the total general administration costs as of March 2024 are likely to exceed his June 2019 estimate by $826,500. His evidence was that those additional costs were mostly due to the costs associated with the "top up" payment process, which he had not anticipated in June 2019, as well as the costs of consolidating the administrators' role. 81 The format of Mr Nicholas' expert report concerning the reasonableness of the administration costs claimed by the administrators was similar to his earlier expert reports. His methodology in approaching the question of the reasonableness of the administration costs was also similar to the methodology he had adopted in previous reports. That is perhaps understandable given that Mr Nicholas' previous reports had been found by the Court to be sufficient to support the previous claims for administrative costs. The investigations conducted by Mr Nicholas included: the examination of tax invoices issued by Maurice Blackburn, Shine and two other law firms that had carried out some of the administration work; consideration of the time spent by lawyers and non-lawyers in respect of the relevant administrative work; a review of the hourly rates charged by the lawyers and non-lawyers; the sampling of costs recorded in the tax invoices for professional fees; the sampling of disbursements; the consideration of the work performed under each of the task coded areas of work; and the consideration of whether there had been appropriate delegation of work. 82 Mr Nicholas did not approve all the costs claimed by the administrators. Specifically, he recommended against the approval of $25,840 in costs claimed by Shine on the basis that some of the "attendances" in respect of which costs were claimed were not reasonably charged. Save for that amount, Mr Nicholas expressed the opinion that the administration costs charged by the relevant law firms, including Maurice Blackburn and Shine, were incurred and charged in accordance with the settlement scheme and were reasonable. 83 The 2023 administrators report recorded that the tasks which resulted in the largest proportion of the administration costs were: registrations (7%), processing individual assessments (6.2%), group member inquiries (13.7%), bulk updates to members (5.3%), managing group member data (6.1%), preparing for the court application (9.7%), payments (15.3%) and "general" (7%). The comments in respect of the "general" task code indicate that the tasks conducted under that code in the relevant period were largely attributable to the consolidation of the role of administrator.

The respondents' submissions 84 The central thrust of the respondents' submissions was that the general administrative costs that had been claimed by the administrators well exceeded Mr Atkins' estimate. As has already been noted, Mr Atkins estimated that the general administrative costs over the life of the settlement scheme would be $5.85 million. If the current application in respect of administrative costs is approved, the total general administrative costs as of October 2021 will be $15,882,822.74. That is an overrun of over $10 million. 85 The respondents contended that, while the administrators have given the Court information concerning the general administration work that they have done during the life of the settlement scheme, they have not adequately explained that significant costs overrun. They submitted that at no point have the administrators satisfactorily explained why there has been such a significant departure from Mr Atkins' estimate and that the administrators have made no real attempt to "benchmark" their general administrative costs against Mr Atkins' "budget". In the respondents' submission, Mr Nicholas' expert reports did not relieve the administrators of the need to explain why their costs had exceeded Mr Atkins' estimate. 86 The respondents submitted that if, as the administrators claimed, Mr Atkins' estimate was no longer valid, it was incumbent on the administrators to prepare and provide the Court with an updated estimate. In the respondents' submission, the administrators had not done so and had instead effectively proceeded without any "budget" in respect of general administration costs. The respondents submitted that the administrators were effectively in the position of a trustee and were obliged to deal with payments out of the settlement fund fairly and efficiently, including payments in respect of general administration costs; all the more so given that they had no client as such and were performing and charging for the administrative work themselves. 87 The respondents also contended that the administration costs claimed by the administrators were disproportionate. They pointed out that if the total number of eligible group members is, as currently estimated, 1,658, and the total administration costs (general administration costs plus claim preparation and review costs under clauses 13.2, 13.3 and 13.4) is $26 million, the administration costs per eligible group member will be $15,681. In the respondents' submission, that figure is not proportionate, particularly given that, due to the high uptake of fast track settlements, the scheme for most group members involved a "basic eligibility assessment and the payment of a fixed amount" rather than an individualised assessment. 88 Ultimately the respondents submitted that, given that the general administrative costs have turned out to be significantly higher than the amount budgeted for at the time the settlement was approved, the Court should consider applying a discount to the general administrative costs which are the subject of the current application.

Should the court approve the claimed administrative costs? 89 There could be little doubt that the general administrative costs that have been incurred by and paid to the administrators over the life of the settlement scheme to date have been very large indeed. As has already been emphasised, if the current application in respect of general administration costs is approved, the costs incurred by and paid to the administrators, essentially in the form of legal fees, will exceed $13 million. That figure does not include disbursements incurred and paid to third parties retained by the administrators to perform certain tasks, such as fees paid to the actuary Mr Atkins. It also does not include the fixed costs incurred and paid pursuant to clauses 13.2, 13.3 and 13.4 in respect of the preparation of eligibility and claim books and the fees charged by claims and review assessors. 90 The size of the general administrative costs incurred by and paid to the administrators over the life of the settlement scheme is even more troubling given that the information provided to the Court at the time of the settlement approval suggested that the general administrative costs incurred over the life of the scheme were likely to be significantly less than $13 million. The actuarial advice provided by Mr Atkins to the administrators and ultimately to the Court was an important consideration in respect of the approval of the settlement. One of the critical questions for the Court was whether the settlement sum was likely to be sufficient to ensure that the eligible group members were fairly and properly compensated. It was obvious that the higher the costs of administering the settlement scheme, the less money would be available to be paid by way of compensation to the eligible group members. The actuarial advice proceeded on the basis that the general administrative costs likely to be incurred over the life of the scheme would be in the order of $5.85 million. The figure of $5.85 million, was, it seems, little more than a "broad-brush" estimate and was not based on any reliable data or detailed actuarial analysis. It does not follow that the discrepancy between estimate provided to the Court at the time of the settlement approval and the amount of general administrative costs in fact incurred can be ignored. Moreover, as pointed out earlier, albeit with the benefit of hindsight, it was unsatisfactory that Mr Atkins proceeded on the basis of a "broad-brush" estimate and unsatisfactory that he was not provided with budgets and business plans which would have enabled him to provide a more reliable estimate. 91 The significant discrepancy between the estimate of general administrative costs given to the Court at the time of the settlement approval and the size of the general administrative costs incurred by and paid to the administrators would have been a major issue were it not for one development. That development is that a much greater number of eligible group members chose to take the fast track option under the settlement scheme. That has had two results. 92 The first result is that the costs associated with the preparation of claim books and the fees charged by claims and review assessors (which are separately provided for in clauses 13.2, 13.3 and 13.4 of the settlement scheme) have been considerably less than the amount that had been estimated. It follows that the overall costs of administering the settlement scheme - the sum of general administration costs and the costs under clauses 13.2, 13.3 and 13.4 - are unlikely to exceed, or significantly exceed, the amount estimated by Mr Atkins, which was $25,626,000 (general administrative costs of $5.85 million and individual claims expenses of $19,776,000). 93 The second result is that, as events have transpired, the settlement sum has been more than adequate to make all the fast track payments and pay all individually assessed claims by eligible group members. It should be emphasised, however, that that satisfactory outcome is not the result of any frugality or efficiency on the part of the administrators in administering the settlement scheme. It is, rather, simply a product of the unexpectedly large uptake of the fast track option. 94 The respondents' submissions in opposition to the current application in respect of administrative costs rely heavily on the significant discrepancy between Mr Atkins' original estimate in respect of general administrative costs and the amount in fact incurred by and paid to the administrators. The respondents also contended that the total amount of general administrative costs claimed by the administrators were disproportionate, particularly given the large uptake of the fast track option. 95 It is, however, important to focus on the nature of the current application. As has already been noted, the current application is for approval of the payment of administrative costs under clause 13.1 of the settlement scheme totalling $1,558,369.64 (comprising professional or legal fees of $1,292,237.20, and disbursements of $266,132.44) for the period May 2020 to October 2021. The two central questions which must be considered in addressing that application are: first, whether the general administrative work which is the subject of the administrators' claim was properly undertaken; and second, whether the fees charged in respect of that work are fair and reasonable. If those questions are answered in the affirmative, the question which then arises is whether there is some other sound reason for either disallowing or discounting the administrators' claim.

Was the general administrative work under clause 13.1 properly undertaken? 96 The settlement scheme contains a very broad definition of administrative costs and, broadly speaking, permits the administrators to claim and be paid professional fees for a wide range of work relating to the administration of the scheme. That work includes "drafting, preparing, negotiating, implementing, facilitating, giving effect to … the Settlement Scheme or the Settlement Generally". The first question is whether the work carried out by the administrators which is the subject of the administrators' claim for administration costs was work which falls within the broad definition of "administrative costs" in the settlement scheme and was properly undertaken. If the work did not fall within that broad definition, or was extraneous, or unnecessary, or unreasonable, or not carried out at all, the administrators would not be entitled to claim any fees in respect of that work. 97 There is adequate evidence before the Court to establish that the work carried out by the administrators during the period which is the subject of their claim fell within the definition of administrative costs in the settlement deed and was reasonably carried out. There is no reason to suspect, let alone conclude, that the work the subject of the claim was extraneous, or unnecessary, or was not in fact carried out. The 2023 administrators' report contains a detailed breakdown of the amounts claimed for general administrative costs by way of task code. The expert evidence of Mr Nicholas was that he examined the 2022 administrators' report, which no doubt contained a similar breakdown, as well as certain tax invoices of the administrators during the relevant period. The tax invoices also included a detailed breakdown of the costs. Mr Nicholas also examined whether the work detailed in the tax invoices had been carried out and was reasonable. He did so by way of a sampling methodology which, in all the circumstances, was reasonable and cost effective. 98 The respondents did not seek to go behind Mr Nicholas' report or criticise his evidence in any material respect. Nor did they submit that there was any basis upon which to conclude that any of the work the subject of the administrative costs claim was unnecessary, or extraneous, or not carried out. The respondents did initially suggest that Mr Nicholas had not, since 2018, conducted any check to determine that the costs for claims preparation work, which is subject to the fixed fee regime in clause 13.2 of the settlement deed, had been accounted for and claimed as general administrative costs under clause 13.1. That claim was not pursued in the respondents' oral submissions. In any event, it has little merit. There is nothing to suggest that any claims preparation work was accounted for as general administrative work and I am satisfied that Mr Nicholas' methodology was adequate and would have detected any such anomaly if it had occurred. 99 In all the circumstances, I am satisfied that the administrators properly and reasonably carried out the work in respect of which general administrative costs are claimed and that that work fell within clause 13.1 of the settlement scheme.

Are the fees claimed in respect of that work fair and reasonable? 100 I am also satisfied that the fees charged for the general administrative work carried out by the administrators during the relevant period were fair and reasonable. That was the substance and effect of Mr Nicholas' evidence, save that he disallowed some of the fees charged by Shine. No claim was made in respect of those disallowed fees. There is in my view no reason to doubt Mr Nicholas' opinion concerning the reasonableness of the fees charged. As has already been noted, the respondents did not seek to go behind Mr Nicholas' report or criticise his evidence in any material respect. In any event, having read Mr Nicholas' report, as well as his previous reports, I am satisfied that his methodology was satisfactory and that he conducted appropriate checks and made appropriate inquiries concerning the fees charged by the respondents.

Is there any reason to disallow or discount the costs which are sought? 101 Having concluded that the general administrative work which is the subject of the administrators' claim was properly undertaken and was claimable under clause 13.1 of the settlement scheme, and that the fees charged in respect of that work were fair and reasonable, the remaining issue is whether there is some other sound reason to disallow or discount the costs claimed by the administrator. In my view, while it was reasonable and appropriate for the respondents to raise the concerns that they have about the general administration costs claimed by the administrators, I am ultimately not satisfied that there is any proper basis for disallowing or discounting the fees. 102 As I have already made clear, it is a matter of considerable concern that the general administrative costs incurred and claimed by the administrators in respect of the first five years of administering the settlement scheme are as high as they are. It is also a matter of some concern that the general administrative costs incurred and claimed to date have well exceeded the estimate that the actuary, Mr Atkins, factored into the cash flow model which was put before the Court in support of the settlement approval application. I am nevertheless not persuaded that, as high as they may be, any of the general administrative costs have been unnecessarily or unreasonably incurred. Nor am I persuaded that, in the particular circumstances of this case, the fact that the general administration costs have exceeded Mr Atkins' initial estimate justifies any discounting of the costs claimed by the administrators. I am satisfied that the administrators have adequately explained why the general administrative costs are as high as they are and why they have exceeded Mr Atkins' estimate. 103 The issues raised by the respondents in the context of this application have, however, with the considerable benefit of hindsight, exposed or highlighted two difficulties that may be sourced back to the settlement approval and the terms of the settlement scheme. 104 The first difficulty is that insufficient attention was given to the likely costs of the administration of the settlement scheme at the settlement approval stage. It may be accepted that the estimate of the general administrative costs that Mr Atkins factored into his cash flow model was "broad-brush" and that he was not provided with any business plans or budgets prepared by Maurice Blackburn. The point is, however, that Mr Atkins should have been provided with business plans and budgets and further detailed attention should have been given to the potential or likely costs of administering the scheme. It was not sufficient for him to use a "broad-brush" estimate, particularly given the concerns, expressed at the time of the settlement approval, that the settlement sum may not be sufficient to adequately compensate all eligible group members. While it may have been a difficult exercise to formulate an accurate or reliable assessment of the likely costs of the administration of the settlement scheme, that exercise should nevertheless have been undertaken. 105 It is also readily apparent that the "broad-brush" nature of Mr Atkins' estimate of general administration costs was not sufficiently brought to the Court's attention at the time of the settlement approval application. It should have been. The unreliability of Mr Atkins' estimate was first brought to the Court's attention during the administrators' application for general administrative costs in June 2017 - but only after the Court required the administrators to provide further information and evidence in support of their application. 106 I do not accept the respondents' submission that the reliability of Mr Atkins' estimate and the fact that the general administrative costs in fact incurred in the first full year of the administration of the settlement scheme significantly exceeded that estimate was only "obliquely" brought to the Court's attention. Nor do I accept the respondents' contention that it was necessarily incumbent on the administrators at that point to obtain an updated estimate from Mr Atkins, or otherwise provide a further "budget" against which future administration costs could be benchmarked. I doubt whether the significant costs which would have been incurred in retaining Mr Atkins to provide an updated estimate of general administrative expenses would have been warranted. As for the provision of a further "budget", I accept Mr Schimmel's evidence that there was little point in continuing to use Mr Atkins' estimate as a benchmark in respect of general administration costs and that he did not consider that he was able to provide a reliable estimate of future general administration costs until at least June 2019. It appears that the estimate that was given in June 2019 was a fairly accurate estimate. 107 The second difficulty that has been exposed is a difficulty with or defect in the terms of the settlement scheme. It seems to me, again with the considerable benefit of hindsight, that given the potential uncertainties and sensitivities in respect of the general administrative costs of administering the settlement scheme, the terms of the settlement scheme should have dealt with the means by which those costs were calculated with considerably more precision. The definition of "administrative costs" in the settlement scheme was extremely broad and clause 13.1 did little more than set out the time costing rates that could be charged in respect of the broad array of work that fell within that definition. That was in stark contrast to clauses 13.2, 13.3 and 13.4 which effectively provided for fixed charges in respect of certain tasks. 108 I seriously doubt that time costing is likely to produce the most efficient provision of legal services, even in the context of a solicitor-client relationship. It is even more doubtful that time costing is likely to provide an efficient or appropriate basis for charging for services provided in respect of the administration of a settlement scheme. Where a law firm provides legal and other services in respect of the administration of a settlement scheme, in circumstances where there is in effect no client and therefore limited oversight, I seriously doubt that it is appropriate to use time costing for all of the administrative tasks that might be performed. That is unlikely to foster or produce the most cost-effective provision of the administrative services. 109 With the benefit of hindsight, at the time of the application for approval of the settlement, further attention should have been given to the precise means by which the administrators could be remunerated or recompensed for their services in respect of the administration of the settlement fees. It may have been appropriate for some tasks to be subject to time costing - for example legal services provided in respect of applications to the Court. It seems to me, however, that some more general administrative tasks should have been subject to fixed charges. For example, the administrators could have been required to specify a fixed charge, perhaps a monthly or yearly charge, for general administrative tasks, such as responding to group member inquiries, providing updates to group members and processing payments. The time costing of such administrative tasks is not justified by the mere fact that the administrators just happen to be law firms. 110 The fact that those difficulties have been exposed at this late stage of the administration of the settlement scheme does not, however, justify the discounting of the general administrative costs claimed by the administrators. It is not appropriate to approach the current application with twenty-twenty hindsight. For the reasons already given, the administrators are entitled to recover the general administrative costs which are the subject of the current application. The administrators carried out the specified general administrative work within the terms of the settlement scheme and the fees that they have charged for that work were fair and reasonable.

Conclusion and disposition 111 I am satisfied that it is appropriate in all the circumstances to order that the administrator pays the amounts identified in prayer four of the amended interlocutory application dated 12 May 2023, being amounts payable as administrative costs pursuant to clauses 13.1 and 13.2 of the settlement scheme. An order will be made to that effect. 112 I do not propose to make any order in relation to the costs of this application. It was, in all the circumstances, reasonable and appropriate for the respondents to appear and make submissions in respect of the administrator's application concerning the approval and payment of administrative costs. While the Court has ultimately accepted that it is appropriate to make the order sought by the administrators, the Court was assisted by the respondents' submissions, particularly in circumstances where, but for their input, there would have been no contradictor. As for the administrator's costs, it is likely that the administrator will file another, perhaps final, interlocutory application which includes a claim for administration costs. The question whether the costs in respect of this application are claimable as general administration costs pursuant to clause 13.1 of the settlement scheme may well need to be addressed in the context of that application. I certify that the preceding one hundred and twelve (112) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wigney.