Freehills saves NAB from £20bn disaster

Freehills has successfully defended the National Australia Bank (NAB) in a claim for A$56bn (£20.2bn) which has gripped the nation. Freehills is believed to have pocketed an estimated A$40m (£14.4m) in legal fees for the defence.
NAB was sued by inventor and small businessman John Maconochie, who designed an online trading and financial system which he later sold to the bank for A$7m (£2.5m). He claimed that NAB failed to commercialise the trading system, thereby depriving him of profits, and asked the courts to award him A$56bn, more than NAB itself is worth.
Pleadings were filed on the case in September 1998, but did not reach court until July 2000. Since then it has been in court for 222 days. Freehills, which is rated as Australia's best litigation practice, fielded a team of four partners, which was led by Geoff Healy. The team also incorporated lawyers from the firm's intellectual property, corporate and banking and finance groups.
Freehills is on NAB's legal panel, although Mallesons Stephen Jaques is the bank's main adviser.
Last week the court dismissed Maconochie's case on the grounds that he had failed to provide security for a costs order and there was no reasonable prospect of him doing so before the final hearing. Little of the substance of the case had yet been heard.
The case has been reported in David and Goliath terms, with Maconochie taking on the might of corporate Australia. There have been claims that NAB pushed up its own legal costs deliberately to a level where Maconochie could not afford to give security. The claims are denied by Healy, who said that NAB could not be criticised for vigorously defending the case.
Total legal costs on the trial are pushing A$80m (£28.8m) according to some estimates, and NAB has released a statement to its shareholders assuring them that Maconochie and his backer are liable for the bank's costs. Maconochie must secure new funding in the next few weeks in order to restart the court case.