Federal Court orders will writers guild to compensate franchisee $137,697

The Federal Court today ordered that Will Writers Guild Pty Ltd and its director, Mr Sidney James Murray, pay compensation of $137,697 to Will Power International Pty Ltd for losses sustained in purchasing a will writing franchise.

The decision is the culmination of a series of criminal and civil proceedings taken by the Australian Competition and Consumer Commission against Will Writers Guild and Mr Murray over their marketing of a franchise that would have been illegal to operate unless the franchisee was a lawyer.

In February 2003, the Federal Court fined Will Writers Guild and Mr Murray a total of $105,000 for falsely representing that the business promoted by Mr Murray could be carried on in the relevant State or Territory of Australia by someone who was not a qualified legal practitioner. It also ordered Will Writers Guild and Mr Murray to pay $229,770 compensation to five of the six franchise operators.

In May 2003, by consent of the parties the Federal Court declared that Will Writers Guild and Mr Murray sold will writing franchises covering all States and Territories (except Queensland) to small business operators without first disclosing important information required by the Franchising Code of Conduct.  It imposed permanent injunctions restraining Will Writers Guild and Mr Murray from offering for sale, selling or supplying any business which involves a franchise agreement under the Franchising Code of Conduct, without providing a disclosure document which complies with the Code to a franchisee or prospective franchisee.

In proceedings brought by the ACCC on behalf of the final franchisee (Will Power International), Justice Weinberg today ordered that Will Writers Guild and Mr Murray pay compensation to Will Power International of $137,697. The compensation order brings the total compensation to franchisees to $367,467 in addition to a total fine of $105,000.

"The Will Writers Guild failed to inform its small business franchisees that operating the franchise would likely to be illegal in view of State and Territory legislation restricting will writing businesses to qualified lawyers", ACCC Chairman, Mr Graeme Samuel, said. "Further, Will Writers Guild failed to adhere to the rules of the Franchising Code of Conduct by failing to provide prospective franchisees with key information about the franchise.

"The code is designed to protect franchisees in their dealings with franchisors, and all franchisors must adhere to it. The code mandates the disclosure of information such as the business experience of the promoter, the litigation history of the franchise, its dealings with related parties, and its handling of marketing payments".