Clayton Utz’s Past Conduct - Part 1: Destroyed Documents and the Promised Ethics Review

I have already written about what my family and I experienced when Clayton Utz became involved in our complaints to my university. In that post, I listed reports about other matters involving the firm. I want to look more closely at those reports now, beginning with the case of Rolah McCabe.

Mrs McCabe was dying of lung cancer when she sued British American Tobacco Australia. Her case raised a question that reaches far beyond tobacco litigation: what chance does a person have of receiving a fair hearing if documents that may matter to their case have been destroyed? 

Clayton Utz acted for British American Tobacco. On 22 March 2002, Justice Geoffrey Eames of the Supreme Court of Victoria ruled on Mrs McCabe’s application to strike out the company’s defence. His judgement examined the destruction of documents, the company’s document retention policy, and the role of its lawyers. He concluded that Mrs McCabe had been denied a fair trial and ordered that the defence be struck out. A jury subsequently assessed damages at $700,000.

The findings concerning Clayton Utz were serious. They were reported widely, and the firm disputed allegations that it had overseen document destruction or conspired to withhold evidence. One lawyer named in the judgement said he hadn’t been given an opportunity to answer adverse findings about him.

(NOTE: My family and I had no say in our complaints to ACU. Clayton Utz and their lawyers’ unethical interference played a role in that. What a double standard.)

On 6 December 2002, the Victorian Court of Appeal overturned the order striking out British American Tobacco’s defence and set aside the damages judgement. It directed that the case be sent back for a new trial. Mrs McCabe had died before that appeal judgement was delivered.

I don’t want to repeat the original findings as though they remained the final court ruling. Equally, I don’t want the appeal to erase the public questions that arose about document handling, legal advice and access to justice. Both stages belong in an honest account of this case.

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What happened to the promised ethics review?

On 24 April 2002, The Australian Financial Review reported that Clayton Utz’s board had begun a broad internal review following Justice Eames’ judgement. The firm’s chief executive partner, David Fagan, said it would examine the judgement and the conduct of the case against the firm’s standards. He indicated that adverse findings could lead to internal action.

That was a consequential public assurance. When an organisation announces an ethics review in response to a judgement of this gravity, it’s reasonable to ask what the review examined, what it concluded and what action followed.

On 18 July 2002, Clayton Utz announced that it would close its tobacco claims litigation practice. Its own statement described this as a business strategy decision. It also said the internal review was continuing and that it would be inappropriate to finalise it before the appeal and the NSW Legal Services Commissioner’s investigation. Closing a practice and completing an ethics review are different things. What became of the review? 

The matter returned to public attention in December 2006. The ABC and The Australian Financial Review reported on leaked material said to come from a Clayton Utz internal inquiry. They reported allegations of serious professional misconduct concerning two former partners and an allegation that evidence given by one was potentially perjurious. The Victorian Attorney-General referred the material to the Director of Public Prosecutions to consider whether criminal charges were warranted, and to legal services regulators to consider possible professional misconduct.

A referral isn’t a criminal finding. A leaked account of an internal inquiry isn’t a published disciplinary decision. Clayton Utz said the leaked material concerned a preliminary review that had been superseded, and maintained that the appeal and legal regulator reviews had exonerated the firm and its lawyers. The reports I’ve compiled don’t establish the final outcome of the later DPP referral. (See also: https://www.tobaccoinaustralia.org.au/chapter-16-litigation/appendix-16-1-mccabe).

But the questions don’t disappear. If an ethics review was announced publicly, what findings, if any, were ultimately reached? How could the public understand the relationship between that announced review, the later leaked material, and the firm’s statement that it had been exonerated?

In a 4 August 2002 interview with Margaret Simons for the Sunday Age, Clayton Utz chief executive David Fagan set out how he saw the firm’s ethical responsibilities. He said lawyers must act within their professional duties, particularly their duty to the court, but that “we don’t take a moral stance” on behalf of a client. He described the decision to leave tobacco claims litigation as a business decision. At the same time, he said the firm’s core values were “honesty and integrity” and that it had carefully reviewed the McCabe judgement, although it wouldn’t finalise or discuss the review’s results while the appeal and regulatory investigation continued. The article also reported that Clayton Utz had established a professional excellence committee. I’m left asking: what did the promised review ultimately conclude, and what changed in the firm’s practice as a result?

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Why I’m revisiting this

Rolah McCabe’s case isn’t my case, and the reports about it don’t prove what happened to my family or me. I’m revisiting it because I have experienced the imbalance that arises when an individual seeking answers faces an institution and its lawyers.

My own account is already on this blog. My family and I have described the communications we received and the effect they had on us. Here, I’m asking readers to look at a documented public case, its appeal, and the questions raised by a promised internal ethics review.

Mrs McCabe’s case deserves to be described with care. She was a person trying to have her claim heard while gravely ill. The trial judgement, the successful appeal, the firm’s responses and the later reports must all be part of the story.

For me, the question left by this first part is simple: 

when a powerful firm publicly promises to examine its own conduct, how can the people affected know what was learned and what changed?

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Sources

• McCabe v British American Tobacco Australia Services Ltd [2002] VSC 73, trial judgement⁠, 22 March 2002. https://assets.tobaccocontrollaws.org/uploads/litigation/Australia/AU_McCabe-v.-British-American-Tob.pdf 

• British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197, appeal judgement⁠, 6 December 2002. https://d3vqfzrrx1ccvd.cloudfront.net/uploads/litigation/Australia/AU_British-American-Tobacco-Austr.pdf

• Pheasant, B., “Clayton Utz to run ethics audit,” The Australian Financial Review, 24 April 2002.

• Clayton Utz, “Clayton Utz to close tobacco claims litigation practice⁠,” 18 July 2002.

• Simons, M., “Lawyers not moral judges – Clayton Utz chief,” Sunday Age, 4 August 2002. 

• Alberici, E., “Law firm Clayton Utz faces criminal investigation,” ABC, 21 December 2006.

• Drummond, M. and Moran, S., “Clayton Utz faces criminal probe,” The Australian Financial Review, 21 December 2006.