AMP competing class actions conundrum – why the cards fell Maurice Blackburn's way

From five competing plaintiff class actions down to one – this report covers the relevant factors in resolving the multiplicity of proceedings in the AMP shareholder class action including whether any preference is to be given to the proceeding filed first in time.

In this matter there were originally five competing class actions (commenced respectively by Quinn Emanuel, Phi Finney McDonald, Shine Lawyers, Slater & Gordon and Maurice Blackburn). All of the proceedings, other than the Maurice Blackburn proceeding, involved a litigation funder – the Maurice Blackburn proceeding was a 'no-win / no-fee' proceeding. Prior to the hearing of the multiplicity argument, Slater & Gordon agreed that its proceeding be consolidated with the Maurice Blackburn proceeding, and that Maurice Blackburn should thereafter have sole carriage of the consolidated proceeding. That left the Court to determine which one (or more) of the now four competing proceedings should be permitted to proceed.

In a lengthy judgment, Ward CJ in Eq determined that the consolidated Maurice Blackburn proceeding should be permitted to proceed and permanently stayed the remaining proceedings. In doing so, her Honour adopted a detailed multifactorial analysis and in summary concluded that:

  • The commencement of a competing class action, after one (or more) had already been commenced, was not an abuse of process, but was to be dealt with by reference to case management principles (at [95], [98])
  • No preference was to be given to the proceeding filed first (in this case, the Wigmans / Quinn Emanuel proceeding) (at [104]-[105])
  • The expert evidence led by Ms Wigmans, which purported to analyse the different funding models and to express an opinion as to the most appropriate funding model for achieving the best outcome for class members (being, in the opinion of the expert, the Wigmans funding model), was inadmissible and/or of no value (at [130]-[163])
  • In comparing the likely returns to class members under the different funding models, it "can only sensibly be [done] if there is some standardisation of the assumptions on which it is based (i.e. there is a need to compare apples with apples)" (at [190], [212])
  • As the funding models in all of the proceedings other than the Maurice Blackburn proceeding contemplated a common fund order being made, it was not insignificant that there remains some uncertainty as to the Court’s power to make such an order (at [205])
  • Each of the funding models had their respective upsides and downsides, and would result in similar outcomes for class members (with the exception of the Wigmans model), but that the absence of a common fund order marginally favoured the Komlotex / Maurice Blackburn model (at [208]-[216]):

Ultimately, I do not suggest that a 'no win, no fee' model will always (or necessarily) lead to the conclusion that such a funding proposal is likely to provide the best return for group members and I do not consider that this should create a precedent going forward as each case will turn on its own facts. However, in the present case the combination of: absence of a separate funding commission; the incentive created by an uplift in fees only once a specified resolution sum is achieved; the comparable return based on standardised assumptions; and the fact that no [common fund order] is being sought (which minimises uncertainty and delay associated therewith), seems to me to point in favour of the combined Komlotex/Fernbrook funding model.

  • Only the Wigmans and Komlotex parties had offered security for the defendant's costs by way of a payment into Court, instead of an ATE insurance policy, and this factor therefore favoured those two proceedings (at [233]).
  • Although there were some differences in the way the respective claims had been pleaded, those differences were not significant, particularly in circumstances where it would be open to the successful plaintiff to subsequently amend its pleading (subject to any limitations issues) – as such, this factor was neutral (at [242]-[246]).
  • Likewise, although there were minor differences in the respective class periods, and therefore the size of the respective classes, those differences were of no relevance to the analysis (at [258]).
  • Although the Wileypark / Phi Finney McDonald proceeding had the largest signed-up class, that factor should not be given any weight (at [285]-[288]).
  • There was no sensible basis for differentiation between the experience or abilities of the respective legal / funding teams (at [311]-[314]).
  • Although the Wigmans / Quinn Emanuel proceeding was slightly more advanced in its progress than the others (being the first filed), it was not to such an extent as to warrant that proceeding being chosen as the vehicle to go forward, and accordingly that factor was accorded little weight (at [324]-[325]).
  • There was nothing in the conduct of the respective legal / funding teams to date which pointed in favour of, or against, any particular party (at [331]).

Her Honour accepted that only one of the competing proceedings should be permitted to continue, and that all of the others should be stayed, and concluded (at [350]-[354]):

"After much consideration, I have formed the view that the consolidated Komlotex/Fernbrook proceeding should proceed. In reaching that conclusion I have taken into account the voluminous submissions and material put forward by the respective representative plaintiffs and have concluded in summary, that: the first mover advantage should be given no weight; there is no sensible basis to differentiate between the respective legal teams (each of which I am satisfied has the skill and capacity to conduct proceedings of this kind in the interests of class members); the bookbuilding efforts of some of the representative plaintiffs should be disregarded; the emphasis placed on the 'informed choice' made by institutional investors who have signed up to the Wileypark/IMF proposal has been overstated; and that both the perceived advantage of the 'no additional cost' expertise of IMF in statistical analysis of data or project management services (for which it ultimately would be remunerated by way of its funding commission) and the fact that the staff with the decision-making role in Augusta are qualified lawyers have been overstated; and that there is no real juridical advantage in the pleading put forward by any of the parties over that of the others.

"The factor on which I have placed most weight is that the 'no win, no fee' model proposed by Komlotex/Fernbrook involves no funding commission; that the modelling undertaken as to costs and returns (accepting the limitations of any process which involves standardising the different assumptions or [sic] which the respective costs estimates are based) indicates that, on most scenarios, the net return for group members is likely to be the highest or around the highest on the Komlotex/Fernbrook scenario; and that Maurice Blackburn is prepared to proffer security for costs to match that provided by Ms Wigmans in the Wigmans proceeding. (If there are real concerns as to its balance sheet position, or as to the sufficiency of that amount as security for its costs, no doubt AMP will make use of the liberty to apply for further security to be provided in due course.)"

Ms Wigmans has signalled her intention to seek leave to appeal from the decision.

Case details

Wigmans v AMP Ltd [2019] NSWSC 603

  • Supreme Court of New South Wales, Ward CJ in Eq, 23 May 2019
  • Wigmans Plaintiff's Solicitors / Funder: Quinn Emanuel Urquhart & Sullivan / Burford Capital
  • Wileypark Plaintiff's Solicitors / Funder: Phi Finney McDonald / IMF Bentham Ltd
  • Georgiou Plaintiff's Solicitors / Funder: Shine Lawyers / Augusta Ventures;
  • Fernbrook Plaintiff's Solicitors / Funder: Slater & Gordon / Therium
  • Komlotex Plaintiff’s Solicitors / Funder: Maurice Blackburn / N/A
  • Defendant's Solicitors: Herbert Smith Freehills

Read more on Austlii: Wigmans v AMP Ltd (No 3) [2019] NSWSC 162 and (No 4) [2019] NSWSC 257

 

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