find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Legal Counsel
Category: Corporate and Commercial Law | Location: North Sydney NSW 2060
· 18 month fixed term contract · 3-5 years PQE with TMT exposure
View details
CBA class action in the nick of time

CBA class action in the nick of time

Time is running out for firms to make the big banks pay for their role in investor losses during the GFC, with Piper Alderman launching a class action against the Commonwealth Bank of Australia (CBA) just inside the limitation period.

Pipers filed an action in the Federal Court last week (7 February) that aims to recoup a portion of $140 million in investments wiped out by the GFC, which were purchased from CBA between 2006 and 2007. The firm is alleging that CBA breached its obligations as a financial services licensee to act honestly and fairly by not fully disclosing the risks associated with the volatile financial products known as synthetic collateralised debt obligations (SCDOs).

The limitation period for damages under Section 82 of the Competition and Consumer Act 2010 is six years “after the day on which the cause of action that relates to the conduct accrued”. In the CBA case, this could be interpreted as either the date investors purchased the SCDOs or when losses were incurred, according to Amanda Banton, the Piper Alderman partner leading the class action.

This ambiguity prompted Pipers to run an open class action to preserve the claim for investors who may come forward at a later date.

“We’re running the class action conservatively as these sorts of actions are starting to get time barred,” she said. “In some cases, potential claimants may have already lost their rights.”

The lead applicants in this action are Clurname Pty Ltd and Gloucester Shire Council, which are looking to recover losses on three SCDO investments plus damages, including lost interest.

“All the people we’ve had contact with wouldn’t have bought the product if they knew that a certain number of defaults would mean their capital would be wiped out,” Banton said.

A litigation funder is providing financial backing but Pipers would not disclose the funder’s name.

In September last year, Pipers won a landmark class action against Lehman Brothers Australia, which was found to have breached its fiduciary duties by selling risky, complex financial derivatives that went sour during the GFC. The firm also successfully recouped millions in losses for 12 NSW local councils in November after the Federal Court found ratings agency Standard & Poor failed in its duty of care to investors by assigning a AAA rating to “grotesquely complicated” and risky synthetic derivatives.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

CBA class action in the nick of time
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
LCA president Fiona McLeod SC
Aug 17 2017
Where social fault lines meet the justice gap in Aus
After just returning from a tour of the Northern Territory, LCA president Fiona McLeod SC speaks wit...
Marriage equality flag
Aug 17 2017
ALHR backs High Court challenge to marriage equality postal vote
Australian Lawyers for Human Rights (ALHR) has voiced its support for a constitutional challenge to ...
Give advice
Aug 17 2017
A-G issues advice on judiciary’s public presence
Commonwealth Attorney-General George Brandis QC has offered his advice on the public presence of jud...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...