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Leanne Mezrani
Slater & Gordon has negotiated a $75 million conditional settlement for more than 2300 GPT investors, adding to the pile of no-fault deals struck since the GFC.
GPT denied liability under the terms of the agreement, as did Centro, Nufarm and NAB in their respective class action settlements last year.
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Slaters’ managing director Andrew Grech told Lawyers Weekly that the law relating to class actions is still developing in Australia; its progress slowed by few cases making it to final judgment. He stressed, however, that a settlement is generally in the financial interests of both parties.
“I don’t think anyone would disagree that it’s absolutely more desirable for parties come to a resolution to a dispute between them, rather than have a court adjudicate on them,” said Grech.
“It was a shame [in the GPT case] that we had to go to the expense of running a four-week trial.”
Slaters filed proceedings in the Federal Court in December 2011. The firm alleged that GPT had failed to meet its continuous-disclosure requirements and earnings forecasts in 2008, which, when downgraded, led to a share price drop from $3.80 in May 2008 to as low as 60c during the GFC.
The claim was brought on behalf of investors who purchased shares between 27 February and 6 July 2008.
Slaters class action lawyer Ben Phi said the settlement was great news for shareholders awaiting the judgment from Federal Court Justice Michelle Gordon following the trial’s conclusion in March.
“The settlement provides a strong return on the losses claimed,” he said.
US-based litigation funder Comprehensive Legal Funding (CLF), which has offices in Melbourne, funded the class action, paying Slaters’ costs and providing security against adverse costs. CLC also backed the Centro investor class action, which resulted in a record $200 million settlement in 2012.
Grech said class actions would be a continuing emphasis for Slaters. The firm recently raised capital to acquire three firms in the UK, where Grech revealed the firm plans to set up a class action practice. He admitted, however, that UK laws add a layer of complexity to launching a class action there.
“There isn’t a developed class actions process ... the [UK] system works quite differently,” he said.
Another challenge is convincing litigation funders to partake in UK-based class actions, added Grech. “The limitations of procedural rules mean litigation funders have to ensure there is an acceptable balance between the risk they take and the return they can achieve.”
