When Professional Confidence Is Not Enough

Lessons in Structural Oversight from Bolitho v Banksia Securities Ltd [2021] VSC 666

Published: 11 July 2024 | Reviewed: 15 February 2026
(2-minute read)

A governance lesson, not a scandal story

In Bolitho v Banksia Securities Ltd [2021] VSC 666, the Supreme Court of Victoria examined serious misconduct that arose within a court-supervised class action.

The judgment is often remembered as a story of individual wrongdoing.
It is also a case study in structural risk.

When financial roles overlap without clear separation, incentives can drift out of sight.
When incentives drift, oversight weakens.
That is when clients become exposed, even in matters that appear well managed on the surface.

For businesspeople, the lesson is not to distrust professionals.
It is to practise governance.

What the Court examined

The proceeding concerned a proposed settlement following the collapse of Banksia Securities, which affected thousands of investors.

In reviewing the settlement process, the Court identified serious issues relating to undisclosed financial interests, fee claims, and failures of transparency to the Court. Consequences followed, including significant financial orders and disciplinary outcomes.

This is not a case about ordinary litigation risk.
It is a case about what can happen when money, control, and decision-making sit too close together.

Why role concentration increases risk

A key theme in the judgment is the danger of concentrated roles and overlapping interests.

Where the same person (or closely connected people) can influence strategy, timing, and financial outcomes, independent scrutiny becomes difficult.

Role concentration does not automatically produce misconduct. However, it increases the likelihood of four recurring problems:

• Costs become harder to challenge early because the people benefiting from fees are also the people framing what is “necessary”.

• Timing decisions can quietly favour fee growth because delay creates more chargeable activity.

• Conflicts become harder to detect because relationships and incentives are not visible to the client.

• Oversight becomes formal rather than functional because no independent party is positioned to question decisions as they are made.

The Banksia proceedings show that confidence and reputation are not substitutes for structural safeguards.

Governance questions every businessperson should ask

In any substantial dispute, you should be able to answer the following clearly, in writing, and in plain language.

1. Role separation

• Who is responsible for settlement strategy and negotiation?

• Who is responsible for trial preparation and advocacy?

• Are those roles financially independent?

2. Financial transparency

• Who is paid, how much, and for what work?

• Are any financial interests, referral arrangements, or commercial ties disclosed?

3. Timing authority

• Who controls when stages begin and when costs are incurred?

• What stops premature work from starting “just in case”?

4. Independent oversight

• Is there a mechanism for reviewing scope and fee expansion before costs are committed?

• If a disagreement arises, what prevents pressure, delay, or loss of file access?

These are not hostile questions. They are basic governance disciplines.

Structural safeguards that respond to these risks

The issues examined in Banksia highlight broader systemic questions about role clarity, financial transparency, and independent oversight.

Clean Law’s structure is designed to address those risks in litigation matters by using safeguards that operate independently of personal assurances:

• Two independent lanes: settlement and cost-safety work is kept separate from trial preparation and advocacy.

• Clean boundaries: Clean Law does not act as trial advocate in contested hearings.

• Client-controlled escrow: funds are released stage by stage, only with the client’s written approval.

• Aligned incentives: a results-based bonus applies only when early resolution avoids trial costs.

• No conflicted ties: no referral fees, commissions, shared profits, or partnerships with courtroom firms.

• Audit and public governance disciplines: trust-account requirements and governance reporting obligations keep boundaries visible and accountable.

These are structural safeguards. They are designed to function even when pressure rises.

Bottom line

Professional confidence matters. Structural governance matters more.

If you cannot clearly see who benefits, when costs expand, and who has authority over timing and money, risk is already present.

The point is not suspicion. The point is control.

Next steps

Read: Two-Lawyer Collaboration & Escrow Oversight Statement (PDF)
A plain explanation of how Clean Law and your separately retained courtroom lawyer operate independently, with client authority protected.

Request a confidential discussion
If you are exploring options, we can explain how these safeguards would apply to your situation.

By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)

Prepared in accordance with public-interest governance, annual Law Society trust-account audits, and ACNC-reported standards.

Disclaimer: General information only. Not legal advice.