As the dust settles on the AMP buyer of last resort (BOLR) case, Money Management understands several participants are still hopeful of making an appeal.
On 6 September, Justice Shaun McElwaine approved the $100 million settlement sum put forward by AMP for class action members in the BOLR case.
While the sum was ruled as being “fair and reasonable”, Justice McElwaine said objections had been made by 92 participants – representing 20 per cent of group members – in a two-day hearing prior to the judgment.
Some 81 of these related to the sum being insufficient, and 58 said it was difficult for them to determine how much they would receive individually.
“In the absence of critical information such as the total BOLR payments outstanding to all class-action participants, I am unable to verify the amount of settlement that I am likely to receive. However, I am very aware the proposed settlement amount of $100 million falls significantly short of this total – possibly by a factor of at least four or five times,” a participant shared in their objection.
The lack of information was sufficient enough for some objectors to state they would rather risk receiving nothing in favour of pursuing further legal action. Others feared if the settlement was approved that they would lose their opportunity to make individual claims of unconscionable conduct or misleading and deceptive conduct against AMP.
Justice McElwaine said he understood the concerns of the objectors and accepted them as valid and truthful. Nevertheless, he said, the settlement is fair and reasonable.
“The principal reason why I have not acceded to their individual and collective position is that I have objectively assessed all the material which I am satisfied provides a proper basis to exercise the statutory discretion to approve,” he wrote in the judgment.
Now that the sum has been approved by the court and agreed to by the funder, it will be up to administrator KordaMentha to distribute the money to advisers. Funder commission is $26 million, apportioned on a pro-rata basis between group members, while legal costs, disbursements and expenses will reduce the $100 million sum further. As a result, it could take until the first half of 2025 before participants start to see any money.
However, participants have until 4 October to file for an appeal if they remain dissatisfied by the amount. They are also able to request that their individual circumstances be reviewed if they feel they deserve a larger proportion of the settlement, although this comes with a $10,000 fee (which is refunded if their review is successful).
But given the sum has been approved by both parties, it could be difficult for advisers to fund any further legal action against a large entity such as AMP.
Asked as to the sentiment of class action participants after the verdict was given, chief executive of The Advisers Association, Neil Macdonald, said: “There was a whole spectrum of views afterwards; some felt closure, some already felt vindicated after the verdict last July, some are happy to be moving on but a reasonably large proportion feel as if they won’t receive enough. There was a wide range of perspectives on how much the settlement sum should be.”
