QBE class action

Maurice Blackburn, Australia’s leading class action firm, is representing shareholders in a class action filed against the ASX-listed insurer QBE Insurance Group Limited (QBE). The class action was filed in the Federal Court in Melbourne on 9 September 2015.

Case developments

Settlement Distribution Scheme approved

On 29 May 2018, the Court made orders appointing Maurice Blackburn as the administrator of the Settlement Distribution Scheme (SDS) and approving the terms of the SDS.

On the current timetable, compensation from the proceeding will be distributed to eligible class members towards the end of 2018 or early in 2019.

Settlement approved

On 4 May 2018, the Court made orders approving the $132.5 million settlement of the QBE class action.

The Court will soon make further orders determining the process by which the settlement funds are to be distributed and setting the rate of commission payable to the funder. The distribution process will begin once those orders have been made. We will provide a further update at that time.

In-principle settlement agreement reached

On 28 December 2017, the parties agreed to an in-principle settlement of the QBE class action. Under the terms of the agreement, QBE is to pay $132.5 million (inclusive of interest and costs, and without admission of liability). The agreement is subject to several conditions, including Court approval.

On 15 February 2018, the Court made orders scheduling a settlement approval hearing for 3 May 2018 and approving a notice to class members regarding the proposed settlement.

Registration

The deadline for class members to register to participate in any pre-trial settlement of the QBE class action passed at 4pm AEDT on 27 November 2017.  If you did not register before the deadline you will not, in the absence of further order of the Court, be entitled to participate in the proposed settlement (in the event that the settlement is approved).

Common fund orders

On 26 October 2016, the Full Court of the Federal Court delivered reasons for judgment indicating that it will make “common fund” orders in the proceeding.  The orders were made on 15 November 2016.

The effect of the orders is that, in the event of a successful outcome in the action (either by way of settlement or judgment), the settlement or judgment sum recovered for all group members will be used, prior to any distribution to group members, to reimburse the funder, International Litigation Funding Partners Pte Ltd (ILFP), for the costs paid by ILFP in funding the action and to pay ILFP a commission at a percentage rate to be approved by the Court at a later stage, all in accordance with “Funding Terms” attached to the Court’s orders.

What is the QBE class action about?

On 9 December 2013, insurance giant QBE stunned the market when the company publicly announced that it was not going to meet earlier profit and financial performance guidance and that, in fact, it was expecting to incur significant write-downs and post a loss of around $250 million for FY13. When confirmed in February 2014, the reported loss of $254 million was the first for the company since 2001. The major contributor to QBE’s poor results and its shock announcement on 9 December 2013 was bad news from QBE’s North American operations.

The revelation on 9 December 2013 of the poor results understandably surprised investors. Only four months earlier, QBE’s half year report in August 2013 fed market expectations of a profit in excess of $1 billion for FY13 and a turn-around of its problematic North American operations.

The market reacted swiftly and savagely on news on 9 December 2013 of the expected loss. QBE’s share price plummeted by more than 20% on 9 December, closing down $3.45 on the prior close, the biggest single day fall for QBE shares in 12 years. The share price continued to fall the following day, shedding another $1.18. In total, QBE shares fell 30% over two days.

The class action alleges that, from 20 August 2013 until the announcement on 9 December 2013, QBE breached its continuous disclosure obligations, engaged in misleading or deceptive conduct, and made false or misleading statements, in contravention of applicable corporate and consumer legislation and the ASX Listing Rules.

If QBE was, or ought to have been, aware of issues that were adversely impacting the company’s North American operations during the period from 20 August 2013 until the announcement on 9 December 2013, and it failed to adequately disclose those matters, then investors who bought ordinary shares of QBE may have paid an inflated price.

If you would like further information about the nature of the allegations and claims in this class action, you should review the amended originating application and amended statement of claim at the links below.

Funding and representation

The class action is being funded by International Litigation Funding Partners Pte Ltd (ILFP).  ILFP is paying the costs of bringing the proceeding and, if the class action is unsuccessful, will pay any costs awarded in favour of QBE.

Maurice Blackburn’s class action record is second to none

Maurice Blackburn is renowned for running the country’s biggest and toughest shareholder class actions, having conducted the first case of this kind in Australia and having secured the six highest class action settlements in Australian legal history.

Since the inception of our class actions department in 1998, we have obtained more than $3 billion in compensation for claimants.

Maurice Blackburn is also the only firm to have secured shareholder class action settlements in excess of $100 million. We have conducted several shareholder class actions in line with our aims to provide greater access to justice and enforce Australia’s corporate governance standards.