Slater & Gordon and the Commonwealth Bank of Australia (CBA) this week finalised an agreement to bring compensation to the victims of the Storm Financial collapse.
The agreement established compensation principles applicable to the claims of more than 2000 Slater & Gordon clients, who borrowed from the CBA to invest in equity investments on the advice of the Queensland financial advisory company, Storm Financial.
The CBA is expected to start making compensation offers within days and all offers are expected to be made by May.
The principles were negotiated between the CBA and Slater & Gordon after an extensive test case process before an independent panel of lawyers, during which legal issues such as what constitutes responsible lending, the obligations under the NSW Contracts Review Act 1980 and the duty of care that existed.
Damian Scattini, Slater & Gordon's Brisbane group practice leader, discussed the arduous process of negotiation which led to this week's outcome. Scattini said his team first sat across the table from the CBA in March last year for what was a "full-on" process, particularly in the last few months.
Although pleased with the outcome, Scattini said: "Like any settlement, there's going to be both sides that come out of it with skin off, there's no doubt about that.
But Scattini continued: "Are our clients better off than they were yesterday? Absolutely."
Facing such an enormous problem, Scattini said the team found it "almost overwhelming" when they first looked it.
"There were so many people with such desperate circumstances...you have to separate the legal entitlements from that feeling of sleeplessness at night...it's a very emotional thing."
Scattini said the agreement is a huge step but emphasised that it is just the first step of many. Apparently not far from a deal with ANZ, Scattini said: "There are plenty of other banks. That was just one bank."
- Briana Everett