THE personal injury firm Keddies Lawyers did not comply with a District Court order that approved the investment of $25,860 in car accident compensation to be paid to an injured teenager when she turned 18.
And the $15,000 that was invested was not deposited in an interest-bearing account with the Bank of New Zealand Australia until six months after the claim was settled in March 2006 with Allianz Australia Insurance, the Herald has learnt.
Justice Reg Blanch approved terms of settlement in the case of Liu Yang, an "infant" plaintiff who was aged 17 when her case settled, at a special sitting of the NSW District Court in Singapore.
Legal experts have described the breach of the resultant order as misleading the court and unethical.
A former District Court judge who has studied the documents in the case told the Herald that the firm also appears to have "unlawfully withheld" $10,860 from her since the settlement 30 months ago, and continued to do so.
Allianz paid Keddies $50,000 to cover its professional costs in settling the compensation claim of Miss Liu, who had her father, Hai Xing Liu act as her legal "next friend" following an accident on Canterbury Road, Belmore, in January 2004 in which she was hit by a car and thrown onto the windscreen, suffering injuries including a fractured eye socket.
These solicitor/client costs were negotiated separately, as legally required for the past 30 years, from the $25,860 that Justice Blanch ordered be invested by Keddies on her behalf until she turned 18 nine months later.
The Herald revealed in June, that among numerous allegations by other former Keddies clients of overcharging, not receiving bills and not being informed of total settlement amounts, $10,860 had been deducted by Keddies for more of its costs from Ms Liu's small commercial settlement payout.
One of the three Keddies partners, Tony Barakat, maintained that the firm was "perfectly and legally entitled to charge solicitor/client costs in addition to the [$50,000] party/party costs recovered from [Allianz]" and that any allegation that there was anything illegal or unethical about the matter was "strenuously denied".
David Marocchi, Miss Liu's Keddies solicitor, also denied the $10,860 deduction was "dipping in" to funds protected by a court order.
The way in which the matter finalised "was in accordance with accepted legal practice and in accordance with the rules governing infant settlements," he told the Herald in May.
Legal experts contacted by the Herald disagree. They say that by not investing $25,860 until Miss Liu turned 18 in December 2006, the court had been misled and the lawyers responsible had behaved unethically.
In July Mr Barakat wrote to Mr Liu to inform him that "due to the oversight of our accountant who is no longer employed in our office" only $15,000 of the $26,860 had been invested as required by the court order.
A notice of motion has been filed with the District Court seeking orders that the case be reconstituted and that Miss Liu be paid outstanding monies.