In early November 2021 the parties to the ABL Class Action reached an agreement to settle the class action. The proposed settlement is for $28 million (inclusive of interest and costs). On 4 March 2022 the Federal Court of Australia approved the settlement amount and Maurice Blackburn was appointed as Administrator of the Settlement Distribution Scheme.
Registrations now closed
The Federal Court of Australia has ordered that only Group Members who registered with Maurice Blackburn prior to 4.00pm (AEDT) on 3 March 2022 are eligible to participate in the settlement of the ABL Class Action. As such, registrations are now closed and Maurice Blackburn is unable to accept late registrations. The ABL Class Action was in relation to purchases of shares in Slater & Gordon Ltd between 30 March 2015 and 25 November 2015.
These orders do not apply to the class action on behalf of Slater & Gordon shareholders against Slater & Gordon’s former auditors (Pitchers Class Action). You can read information about the current status of this case by clicking this link.
We are pleased to advise that, following the settlement approval hearing on 4 March 2022, Justice Beach of the Federal Court of Australia made orders approving the settlement of the proceeding. His Honour found that the settlement is fair and reasonable and in the interests of Group Members as a whole, having regard to the claims made on behalf of Group Members who will be bound by the settlement. The settlement approval orders are available under “Relevant Documents” below. You can find a copy of his Honour’s reasons at the following link.
Maurice Blackburn have been appointed as Administrator of the Settlement Distribution Scheme. We are currently in the process of gathering and assessing Group Member data which will enable us to distribute settlement funds to eligible Group Members. Payment will be made as expeditiously as possible, and our best estimate is that the first distribution to group members will occur within 6 months. Eligible group members in the ABL Class Action will be contacted in the coming weeks with further information.
A copy of the Settlement Distribution Scheme (without its confidential schedules B & C) is available under “Relevant Documents” below. Eligible participants in the settlement who wish to see a copy of the confidential schedules should contact the ABL Settlement team at ABL@mauriceblackburn.com.au.
Frequently asked questions
A class action is a legal action that is brought by a person (the Applicant) on their own behalf and on behalf of a group of persons (Group Members) against another person, company or firm/s (Respondents), where the Applicant and the Group Members all have similar claims against the Respondents.
The Applicant in a class action do not need to seek the consent of Group Members to commence a class action on their behalf, or to identify a specific Group Member or Members. However, Group Members can cease to be Group Members by ‘opting out’ of the class action before the Court-imposed deadline. The deadline for opting out has now passed.
The ABL Class Action was commenced on 17 September 2019 in the Victorian Registry of the Federal Court of Australia. It was the third of three proceedings commenced by the Applicant on behalf of group members arising out of the precipitous falls in SGH’s share price; arising from the acquisition by SGH of the UK-based Professional Services Division (PSD) from Quindell Plc for approximately A$1.25 billion, which was first announced on 30 March 2015.
The allegations in the ABL Class Action were, in summary:
- that Arnold Bloch Leibler (ABL) was the legal adviser to SGH in relation to a A$890 million capital raising (Entitlement Offer), the funds from which were to be used by SGH to partially fund the acquisition of the PSD.
- On 26 November 2015, SGH released an ASX announcement regarding a UK government reform affecting the ability of law firms acting in low-value road traffic accident (RTA) claims to receive legal costs for their services (Small Claims Track Threshold Increase). The price of SGH shares dropped precipitously on this news. PSD’s business primarily consisted of low-value personal injury claims for RTA claims.
- As well as being SGH’s legal adviser on the Entitlement Offer, the Applicant alleged that ABL also played a key role in designing and implementing the due diligence process associated with the Entitlement Offer.
- The Applicant alleged that ABL should have ensured that the strong possibility of the Small Claims Track Threshold Increase reform (which would impact the PSD business) was disclosed to the market and SGH shareholders, and, if it had, the Entitlement Offer would not have proceeded either at all or in the form that it did. The Applicant alleged that by failing to ensure that the disclosure was made, ABL was negligent and/or contravened s 1041H of the Corporations Act 2001 (Cth) and should therefore be liable for some part of the losses suffered by SGH shareholders.
The detailed allegations are set out in the Applicant’s Amended Statement of Claim filed with the Federal Court on 26 July 2021. ABL denies the allegations made against it, and ABL’s responses to the allegations are set out in its Defence to the Amended Statement of Claim filed with the Federal Court on 19 August 2021. Copies of these (and other) documents can be downloaded from this page (under the heading ‘Relevant documents’ below), or by contacting Maurice Blackburn, whose contact details are set out below.
In order to participate you must meet the criteria to be a Group Member in the ABL Class Action (see below) and have registered with Maurice Blackburn prior to 4.00pm, 3 March 2022.
You are a Group Member in the ABL Class Action if (save for some limited exceptions) you satisfy the following criteria:
- acquired an interest in fully paid ordinary shares in SGH (including entitlements to new fully paid ordinary shares in SGH to be issued as part of the Entitlement Offer) during the period between 30 March 2015 and 25 November 2015; and
- you suffered loss or damage by, or which resulted from, the conduct of ABL alleged in the ABL Class Action (and which is summarised above); and
- you did not opt out of the ABL Class Action on or before 8 September 2021.
If you are unsure as to whether or not you are eligible, you should contact Maurice Blackburn, whose contact details are set out below, or alternatively seek your own legal advice.
The initial trial of the ABL Class Action was scheduled to commence on 9 November 2021 and was intended to be heard at the same time as the Pitchers Class Action. Shortly prior to the commencement of the trial, and after the parties had served all of their lay and expert evidence, the parties to the ABL Class Action agreed to a proposed settlement of the ABL Class Action. Under this settlement, ABL will, without admission of liability, pay $28,000,000 inclusive of interest and costs (Settlement Sum) in full and final settlement of the claims of the Applicant and Group Members. The proposed settlement also resolved various cross-claims brought by ABL against SGH and certain former officers and directors of SGH.
As described above, the settlement has now been approved by the Federal Court, including the reasonableness of deductions from the Settlement Sum prior to distribution to Group Members. These are set out in the Court’s settlement approval orders which are available below. Approximate figures are provided below:
- Applicant’s legal costs and disbursements: $4.76m; of which approximately $2.44m related to Maurice Blackburn’s legal fees to date and $2.32m relates to disbursements (primarily relating to counsel and expert fees). As part of the settlement approval process, the Court had regard to the views of a costs referee appointed by the Court for the purpose of assessing the reasonableness of the Applicant’s legal costs and disbursements.
- Funder’s Commission (Common Fund Order): $7,840,000. The costs and adverse costs risks of the ABL Class Action have primarily been funded by ILP15 pursuant to various Funding Agreements between ILP15 and the Applicant and between ILP15 and some of the Group Members (Funded Group Members). ILP15 has paid 100% of all disbursements and 60% of Maurice Blackburn’s legal fees to date. ILP15 has also borne the risk of any adverse costs order against the Applicant (the amount the Applicant might be ordered to pay to the Respondent if the case were unsuccessful) and has also provided security for those costs in the amount of $2.5 million for the period up to the trial that was scheduled to commence on 9 November 2021. Under its Funding Agreements, ILP15 is entitled to a commission of 28.5-35% of the Funded Group Members’ share (before legal costs) of the Settlement Sum. To ensure that Funded Group Members are not disadvantaged in comparison to Unfunded Group Members, the Applicant asked the Court to make an order (called a Common Fund Order or CFO) that provides for equal treatment of all Group Members. The CFO payment to ILP15 approved by the Court in return for its funding of the ABL Class Action represents 28% of the Settlement Sum.
- Settlement administration costs estimate: $400,000. This payment relates to the estimated costs incurred/to be incurred by the Settlement Administrator under the Settlement Distribution Scheme.
- Applicant reimbursement payment: $16,800. This is a payment to the lead applicant relating to the time, inconvenience and expense incurred in conducting the ABL Class Action (in addition to doing so in the Pitchers Class Action) on behalf of, and for the mutual benefit of, all Group Members.
The Residual Settlement Sum following the deductions as outlined above is approximately $15m (plus any interest accrued on the Settlement Sum, less any further legal costs incurred in distributing the Settlement Sum to Group Members (with all such further costs likewise being subject to the Court’s approval)).
The amount of the Settlement Sum which is ultimately available for distribution to registered Group Members will be distributed in accordance with the, including a proposed Loss Assessment Formula (LAF) (which details how each Group Member’s entitlement to a share of the Settlement Sum will be calculated). The SDS and the LAF were also approved by the Court. A copy of the Applicants’ proposed SDS (excluding the confidential schedules) can be downloaded from this page (under the heading ‘Relevant Documents’ below). If you wish to obtain a copy of the confidential LAF, you may do so by requesting a copy from Maurice Blackburn and by signing and returning to Maurice Blackburn a confidentiality undertaking.
In addition, the settlement deed entered into by the parties to the ABL Class Action also provides for all Group Members to release and discharge ABL and its related parties (which includes ABL’s current and former directors and officers) from:
- each and every claim made by or on behalf of the Applicant or any Group Member in the ABL Class Action, including each of the claims articulated in the Applicant’s Amended Originating Application and/or Amended Statement of Claim; and
- any and all claims arising from, in connection with, in respect of or related to:
- any matter which is or ever has been the subject of the ABL Class Action, including any matter specified in the Applicant’s original Statement of Claim or Amended Statement of Claim filed in the ABL Class Action; and
- the ABL Class Action itself, including the administration of the Scheme and the costs of, and incidental to, the ABL Class Action.
Therefore, Group Members (whether they register to participate in the settlement or not) will be bound by the settlement and will not be permitted to make any subsequent claim against ABL in relation to the above matters.
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