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Major hit to businesses in Sydney light rail stoush

Duncan MurrayAAP
A commission for funding litigation over light rail disruption will come from the damages awarded. (Mick Tsikas/AAP PHOTOS)
Camera IconA commission for funding litigation over light rail disruption will come from the damages awarded. (Mick Tsikas/AAP PHOTOS) Credit: AAP

Businesses that successfully sued the NSW government over the construction of Sydney's light rail will lose a large chunk of the payout, following an unusual Supreme Court bid.

A court ruled last year that two businesses affected by the construction of the light rail are entitled to damages from Transport NSW, after disruptions along George Street extended well beyond expectations.

Following that judgment, the businesses took the unusual step of applying for the 40 per cent commission owed to the litigation's financial backer to be paid as additional damages.

The businesses argued that losses resulting from the light rail's construction included the funder's commission and they are therefore entitled to compensation.

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In a judgment handed down on Thursday, Justice Richard Cavanagh found no basis to substantiate the commission being paid as additional damages, noting no court had ever made such a ruling in the past.

As lead plaintiff on the claim, Sophie Hunt who operates Hunt Leather in the Rocks, signed a funding agreement with International Litigation Partners (ILP), knowing the costs of running the proceedings would likely run into the several million dollars.

ILP is part of the group of companies that acquire capital from participants around the world to invest in the funding of litigation for reward.

Paul Lindholm, who represents ILP, said the light rail suit had been identified as having a "high degree of risk relative to other class actions".

He said it is general practice for ILP to offer funding for cases that other funders do not wish to fund.

The CBD light rail was initially forecast to cost $1.6 billion, only to jump to $2.1 billion by 2015 and $3.1 billion in 2020.

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