Queen's $20,000-a-day Man

Sun Herald

Sunday August 14, 2005

By CATHARINE MUNRO

SEVEN Network owner Kerry Stokes has flown in the lawyer dubbed the "cleverest man in England" to sue Australia's sporting and television power-brokers for $1 billion in damages.

Mr Stokes has amassed seven barristers to do battle in the Federal Court against 22 opponents, including the major football leagues, in a high-stakes game that has raised the eyebrows of the finance world.

The team will be led by Jonathan Sumption, who is not only a Queen's counsel by title but also the Queen's man of choice in court. His fees are believed to be stratospheric by Australian standards at least twice the top local rate of $10,000 a day.

Styling himself as the David of the media industry, Mr Stokes is taking on several Goliaths including Telstra, Kerry Packer and Rupert Murdoch.

The orphan who has a reputation for extraordinary doggedness in business alleges that the media moguls conspired against him to keep him out of pay television and to stop him from winning rights to broadcast rugby league and the AFL.

Australian viewers are left with no choice but to subscribe to Foxtel, which holds a "gorilla" sized monopoly on pay television and viewing sports, Mr Stokes's argument goes. Foxtel denies it has a monopoly, saying it competes with DVDs and free to air for viewers' attention.

"We are defending ourselves against what we believe are the unfounded allegations of a serial litigant," said Foxtel spokesman Mark Furness.

If Mr Stokes loses, he may be forced to pay the costs of all the parties he is suing at least $100 million wiping out nearly twice Seven's annual profit last year of $60 million.

"It's a make or break thing for Seven," said Shaw Stockbroking's Greg Fraser. "This is adding up to be a very, very significant cost." But one investor said that, if Mr Stokes won, the gains could deliver shareholders $4.50 for every share they own.

Not since the battles to control rugby league in the 1990s have the courts seen litigation of this size, says former consumer watchdog chief Allan Fels.

Mr Stokes is asking the court to order a payment of between $750 million and $1.1 billion in damages that resulted from the failure of Seven's pay TV venture C7 in 2002. "This is the biggest trade practices case ever," said Professor Fels.

The trickier aspect of the trial, said Professor Fels, is his submission that Foxtel's ownership by Telstra, Mr Murdoch's News Ltd and Mr Packer's Publishing and Broadcasting should be dismantled so that Mr Stokes can enter the market.

Seven will be relying on the fine mind of their British silk, who has a name at home for winning unwinnable commercial cases and regularly works for the Government.

When British Prime Minister Tony Blair got into hot water over leaks to the press over weapons of mass destruction, Mr Sumption was his man at the Hutton inquiry which cleared Mr Blair's name.

Despite an income that would pay for a glamorous lifestyle, he prefers to hide away in a chateau in France to write books on medieval history.

Mr Sumption, 56, has the coiffure of a mad professor and dresses like a man with his mind on other things.

Australian barristers, many of whom may be miffed for being overlooked for a foreigner, are eagerly awaiting his appearance before Justice Ron Sackville in the Federal Court on September 12.

"The view of the bar is that it will be interesting to see how the clash of two healthy intellects and egos plays out," said one.