Today's Federal Court hearing outlining the settlement in Amcor Visy class action is a very significant day for the many thousands of victims of Amcor and Visy's price fixing and market rigging conduct.
The settlement sum of $95m is plus all costs, which means that the claimants receive their money without further deduction. The costs are subject to court approval. Amcor will pay two thirds ($63.3m) of the damages and costs and Visy one third ($31.7m).
Maurice Blackburn chairman Bernard Murphy said:
"This settlement is a great outcome for over 4,500 Australian businesses who were overcharged by Amcor and Visy. The class members include, grocery and vegetable companies, industrial companies (paper, metal, appliances), businesses that pack meat and poultry, companies in the dairy industry and that pack and sell seafood, beverages and consumer goods. They range from small businesses to household names, some of whom were scheduled to give evidence in this trial.
"The settlement has come a good time for many of our clients in regional Australia who have been hard hit by floods and Cyclone Yasi.
"We are very proud of our role in bringing this enormous, very complex, hotly contested piece of litigation to a successful conclusion. It's a very good day for our clients. The settlement sends a strong message to corporate Australia - obey the law, respect corporate governance standards or you will be forced to pay compensation.
"This is the biggest payout for victims of a price-fixing cartel in Australia's history. It is more than three times the size of the 2006, $30.6 million settlement in the Vitamins class action that Maurice Blackburn also conducted. It is also nearly triple the total fine that the ACCC imposed."
"This class action was extraordinarily hard fought, right up to the steps of the court. The case faced a number of procedural challenges, including battles with the ACCC to get documents given to it by Amcor, discovery fights that went on for years and, after spending millions on expert economists and accountants from around the world it became clear that there would be no agreement on what prices would have been in the hypothetical, competitive world of the complex cardboard box industry.
"The companies continued to deny their price-fixing conduct right up to the end, and said that even if we could prove it, that it did not have a far reaching effect, was not acted on by their sales executives, and negligible, if any losses, were suffered by its customers. They also stated that any customers who had suffered loss had passed on up to 90% to their own customers and therefore had suffered no loss.
At least 4500 businesses were affected by the price fixing and market rigging conduct of these two very big companies. Amcor obtained immunity from prosecution from the ACCC, in return for giving evidence against Visy in 2004. Visy was prosecuted by the ACCC and fined $36m in November 2007. The judge imposing the fine described it as the worst cartel conduct ever prosecuted in Australia.
Maurice Blackburn was not supported by an external litigation funder in this matter and has borne all risk and costs. The cartel victims have not paid for joining this action.
Information on Maurice Blackburn's other cartel actions
The Vitamins cartel action was against multinational pharmaceutical companies Roche, BASF and Aventis for fixing prices of animal vitamins during the 1990's. The matter was settled in 2006.
Since 2007, the firm is also running the Air Cargo cartel action against 7 international airlines.