A judge has ruled a timeline for mediation between AMP Financial Planning and Equity Financial Planners to begin.
AMP announced on 27 September that it intends to appeal the judgment made by Justice Mark Moshinsky on 5 July over the buyer of last resort (BOLR) class action proceedings and would be proceeding with mediation.
Justice Moshinsky had ruled in favour of the class action group, finding that the changes made by AMP with immediate effect were not authorised under the legislative, economic or product (LEP) provisions and “were ineffective”.
In a Federal Court order on 3 October, Justice Moshinsky said: “The parties intend to participate in a mediation prior to 27 November 2023, before a mediator to be agreed, and therefore agree to defer the issue of the costs of the initial trial to a date after the mediation, if necessary.”
On 29 August, AMP was ordered to pay Equity Financial Planners, the lead applicant in the Corrs Chambers Westgarth-led class action, $814,944.76 and over $151,000 in interest.
Sample group member, Wealthstone, will receive $151,533.51 and just over $17,000 in interest.
Other members of the class action will have to wait longer for information on any potential compensation, and this will require another judgment for the remaining group members.
AMP had been ordered to file and serve written submission and affidavit material by 4:00pm on 10 October, and for Equity to file and serve any written submission in reply by 24 October. These orders have since been vacated in light of the mediation.
Industry response
The decision by AMP to appeal has not been welcomed by members of the financial services community who have already been waiting years for an outcome.
Former AMP planner and member of the class action, David Haseldine, said: “It is nothing more than a further unconscionable act by a corporate machine to pay less than it should do to a great many it has harmed in no small way.
“AMP’s tactic is to agree to what is being offered in mediation to look like the good guys whilst playing cents on the dollar or tie up the situation in the legal system for God knows how long.
“For AMP to do the right thing, it would not have been that hard. Pay the financial planners it has thrown under the bus, and do it sooner rather than later with no more games. This would stop the pain AMP is inflicting on the remaining and ex-AMP planners affected, and permit the rebuilding of the brand and its reputation.”
Neil Macdonald, chief executive of The Advisers Association, welcomed AMP’s decision to enter mediation but said he was “extremely disappointed” by the decision to appeal.
“We are extremely disappointed that AMP has chosen to appeal what was a conclusive judgment by Justice Moshinsky. We genuinely believe his honour already took all the matters raised by AMP into consideration.
“It has already been a lengthy, expensive and stressful process for all our impacted members.”
In return for mediation, and on top of what the courts already awarded (1.5x plus interest), AMP needs to pick up ALL legal costs for both sides AND pay damages for the untold mental health toll it caused its planners!