Allegations against Keddies

The Sydney Morning Herald today publishes serious allegations against Keddies, the big NSW personal injury law-firm. Obviously these allegations are untested - and they are denied by Keddies - but if true they are very disturbing.

Extracts below

THE state's largest specialised personal injury law firm is battling allegations of professional misconduct, including gross overcharging and falsifying documents as well as defamation, during an ongoing and bitter dispute with some former staff.

Former clients have claimed Keddies Lawyers has retained hundreds of thousands of dollars of settlement money from compensation cases without their knowledge.

Crippled and injured car accident clients of the firm maintain they were never sent bills, which in one case would have revealed a businessman had more than 80 per cent of his payout taken in legal fees and expenses.

Another woman, catastrophically injured in an outback vehicle accident six years ago, discovered well after her claim was settled without any court hearing that she had paid about $800,000 in legal fees from her $3.5 million payout.

And the father of a girl killed in a Sydney car accident was compensated $300,000 for psychological injury but received only $85,000 net initially after almost $215,000 in legal fees and expenses were charged.

Keddies says all the complaints against the firm are "totally without substance" and were orchestrated primarily by three "former disgruntled staff members" who were sacked in late 2006 and now "control" the unhappy clients.

The Herald has learnt that Keddies has refunded more than $500,000 to a group of at least seven former clients who complained to the Office of the Legal Services Commissioner about overcharging.

One of them was Mr Gu, who was repaid $100,000. His reimbursement cheques, dated two months apart and for separate amounts of $40,000 and $60,000, were made out to his daughter, who has never been a Keddies client.

Some of the clients received refunds, signed confidentiality agreements and agreed to withdraw complaints.

The managing partner, Russell Keddie, said the refunds - even one as large as Mr Gu's - were not in any way an admission of overcharging.

"Paying them this money, it was more to say, 'We're sorry they were so unhappy'," he said.

Most of the official complaints about Keddies that followed were from Chinese citizens injured in Australia during holidays or while on work visas, and who later returned to China.

Mr Keddie said that without arranging for the cases to be heard overseas, the plaintiffs would have been unlikely to have been compensated for their injuries because visa or medical reasons prevented their return to Australia.

Mr Keddie said there would not have been any complaints except "the horrible renegade employees got into their ears" and encouraged Chinese clients to make them. "How would someone in Beijing or Shanghai, like Mr Gu, for example, understand about the Office of the Legal Services Commissioner?"

"We do have happy clients," Mr Keddie said, as a pile of testimonials and pictures of smiling, well-compensated claimants in their journal to clients attests.

The partners also denied the firm had a reputation for overcharging.

"Keddies is a conservative firm," Mr Keddie said. "We are not as aggressive as some of our rivals."

A time ledger of the Keddies solicitor David Marocchi's work for one client, seen by the Herald, shows that on one day in November 2005, he recorded 22 hours of his time and charged $2175 "to review" a file transferred from a colleague, a further $2610 "to peruse" it, $1740 "to consider" it, $1087.50 for "drafting" and another $1087.50 for further "considering". That day's work appeared to total $9500. Mr Marocchi has denied inflating fees or recording excessive hours.