Members of the taxi and hire car industry are expressing their outrage over the proposed settlement of one of Australia’s most significant class actions. Zacharias Szumer reports.
In March, Uber’s commitment to pay more than $270 million to members of the Australian taxi and hire car sector was celebrated as a ‘historic and ‘world-first’ achievement.
Lawyers representing the plaintiffs described the outcome as a testament to unity, noting that “thousands of everyday Australians [had] joined together to stare down a global giant” in their quest for justice.
However, discontent is brewing among some of the 8,700 taxi owners, licensees, and drivers involved in Australia’s fifth largest class action lawsuit, as they feel their compensation is “woefully unfair” when compared to their losses.
After accounting for Maurice Blackburn’s substantial legal fees and the litigation funder’s share, the plaintiffs will receive only a small portion of their actual losses incurred when Uber entered the Australian market unlawfully over a decade ago and disrupted the taxi industry.
‘Big losers’ in the class action market?
While the exact settlement amounts remain confidential, one plaintiff disclosed to the Victorian Supreme Court that the majority can expect compensation close to $15,000-$21,000, which many deem inadequate.
Paul Scaini, leader of the Queensland Taxi Licence Owner’s Association, expressed his frustration in court, stating that the compensation package was “woefully inadequate” given that Uber’s actions directly inflicted damages of approximately $1 million on his family, forcing them to sell their home in the process.
“I find it astounding that the legal team now considers it somehow equitable for class members to be the big losers in this situation,” Scaini lamented.
The potential for further reductions in the overall compensation for plaintiffs arises from the fact that several thousand members of the taxi and hire car industry, who had not previously registered for the class action, are now seeking to join in hopes of receiving a share after the settlement announcement.
In an October interview with MWM, Scaini criticized the legal representation from Maurice Blackburn, which accumulated over $38.6 million in fees, arguing they promised to deliver justice, not merely “a token settlement.”
In court, Scaini claimed that the decision to settle ultimately came down to the litigation funder’s urgency to access $81,541,000 immediately, as opposed to waiting for a fair outcome for the class members.
This case falls under the category of class actions funded by investors, with Harbour being identified as the largest privately owned litigation funder worldwide.
The financial returns for firms such as Harbour can be substantial, which is often justified due to the significant risks involved in funding class actions.
Should the dispute have proceeded to trial and resulted in a loss for the taxi drivers, Harbour would not only forfeit their financial outlay, but also be liable for any additional costs exceeding their insurance coverage.
During a hearing in September, Harbour’s barrister characterized the case as facing “unique risks and unique scale”, advocating for the settlement and highlighting the investor’s 30% cut.
Regrettably, Harbour did not respond to MWM’s inquiries for a statement regarding the case.
Led on by leading law firm?
Brisbane taxi owner Stephen Lacaze recounted how the principal lawyer representing the case entered the scene with a reputation akin to “Bradman-like batting averages,” instilling confidence in the capacity of Maurice Blackburn to secure a favorable outcome.
She clarified that the legal process would likely be protracted, yet offered reassurance that Maurice Blackburn possessed the necessary expertise and commitment to see the case through to its conclusion, according to Lacaze’s testimony in September.
Rod Barton, former leader of the Victorian Taxi and Hire Car Association when the lawsuit commenced in 2019, characterized this endeavor as potentially a fool’s errand.
He opined that, while they might have achieved victory in court, the inevitability of an appeal from Uber, given their financial resources, seemed nearly certain.
Barton explained that extending the court battle could lead to further delays and expenses without a guarantee of significantly better financial restitution.
Scaini corroborated Barton’s assessment, asserting that many owners of taxi licenses lack the professional sophistication to adequately convey the implications of their losses.
Importantly, he mentioned that none of the lead plaintiffs were present during the negotiations that ultimately produced the settlement. However, it should be noted that these lead plaintiffs did approve the settlement prior to its court presentation, with some openly commending the outcome.
Justice vs pragmatism
Despite the criticisms, Scaini conceded that “without Maurice Blackburn and Harbour, we would likely not have had the capacity to hold Uber to account,” acknowledging the constraints faced by the taxi industry.
Barton further elaborated that finding legal representation willing to tackle such a complex case proved challenging, disclosing efforts that involved nearly a year of negotiations before ultimately reaching out to Maurice Blackburn.
He expressed that they secured the best funding agreement available at the time, highlighting the competitive nature of litigation funding where firms assess the likelihood of winning before offering financial backing.
Barton then retorted that all stakeholders in the class action were made aware from the outset of Harbour’s 30% cut from any settlement, noting that while feelings of discontent were prevalent, responsibility for the devaluation of license values ultimately lay with state governments rather than Uber itself.
Notably, Barton recalled that previous litigation attempts against state governments in Victoria, Queensland, and Western Australia were unsuccessful.
“We all wanted to win millions, but no one was ever, ever going to do it,” concluded Barton, who personally experienced the loss of his home as an indirect result of Uber’s actions.
He added, “I sympathize with those objecting to the settlement because I’m in the exact same position.”
His remarks underscored a stark reality: “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 emerged as two of the ten objectors attending the September hearing to voice their discontent with the settlement terms.
Barton remarked that when it came down to mobilizing support, only a small number of plaintiffs participated in the court proceedings out of the 8,500 involved.
Scaini contested this assertion, insisting, “There were a hell of a lot more objections. It was only that ten people chose to talk to those objections in court.”
According to reports from court-appointed contradictors, there were actually 85 formal objections raised regarding the settlement.
Scaini elaborated that the limited number of formal objections reflected the sentiment among plaintiffs who felt “beaten and let down” by the promise of adequate compensation being undermined.
Maurice Blackburn responded by expressing pride in having secured a notable $271.8 million settlement, while maintaining that “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.
Zacharias Szumer is a freelance writer from Melbourne, contributing to various notable publications, including The Monthly, Overland, Jacobin, and the South China Morning Post, among others.
He is also credited with responsible storytelling in the War Power Reforms series.
**Interview with Paul Scaini, Leader of the Queensland Taxi Licence Owner’s Association**
**Interviewer:** Paul, thank you for joining us today. You’ve been vocal regarding your dissatisfaction with the proposed settlement from Uber’s class action. Could you elaborate on why you feel the compensation is inadequate for those affected?
**Paul Scaini:** Thank you for having me. The proposed settlement amounts are simply not sufficient. Most members of our sector are expected to receive around $15,000 to $21,000, but the damages inflicted by Uber’s unlawful entry into the market far exceed that. For my family alone, we’ve estimated losses around $1 million, which forced us to sell our home. It’s astounding that the legal team could consider such a settlement equitable.
**Interviewer:** You mentioned legal fees and cuts from the litigation funder, Harbour. Can you explain how these factors impact the overall compensation?
**Paul Scaini:** Yes, it’s crucial to understand. Maurice Blackburn, the legal representatives, accumulated over $38 million in fees, and Harbour takes a substantial cut—30%. After those deductions, the compensation left for plaintiffs is disappointing. Many of us feel like we’re being treated as the “big losers” in this situation.
**Interviewer:** Some plaintiffs have also expressed concerns about the urgency behind reaching this settlement. Can you share your thoughts?
**Paul Scaini:** Absolutely. In court, I argued that it seemed the litigation funder prioritized access to their share of $81 million over achieving a fair outcome for the class members. This urgency has left many questioning if justice was truly served in this process.
**Interviewer:** In light of these challenges, do you see a path forward for taxi and hire car operators looking for more equitable compensation?
**Paul Scaini:** It’s difficult to say. Many operators are now seeking to join the class action to potentially receive a share after hearing about the settlement, which could complicate things further. My concern is that any attempts to push for higher compensation could lead to more delays without any guaranteed results.
**Interviewer:** You’ve spoken to the complexities of this case and the representation by Maurice Blackburn. How do you feel about their role in this class action?
**Paul Scaini:** They did provide a path to hold Uber accountable, which I acknowledge. However, we were led to believe that we would see a significant return for our losses, not just a token settlement. There’s a growing frustration among taxi operators, especially since not all lead plaintiffs were involved in settlement negotiations.
**Interviewer:** Lastly, in light of everything that’s happened, what message would you like to convey to your fellow taxi and hire car operators?
**Paul Scaini:** I want to assure them that they’re not alone in their feelings of frustration and betrayal. We united to fight for our industry, and while the outcome may not be what we hoped for, we must continue advocating for our rights and seek justice in any way possible.
**Interviewer:** Thank you for sharing your insights, Paul. It’s clear the taxi and hire car industry is navigating a difficult situation, and we appreciate you taking the time to discuss it with us.
