A fuller exploration into the collapse of Storm Financial and the liability of Macquarie Bank and the Commonwealth Bank of Australia will now go forward.
Last week (22 November), the Federal Court's Justice Reeves allowed amendments which introduce additional claims on behalf of the Storm investors against CBA.
The amendments - which allege breaches of the Code of Banking Practice, a new breach of contract claim, misleading and deceptive conduct and unconscionable conduct - expose how far the "rot" had set in "all the way up to the highest echelons" of the bank's players, said Stewart Levitt, the lawyer acting on behalf of former Storm Financial clients.
"I think it's a huge win for optimising the prospects of possible settlement or of a fully cathartic experience in the court process, because now everything will come out in the open and whatever the outcome ... there can be a full exploration of what occurred, to some extent assisted by ASIC," said Levitt.
The CBA's counsel, Robert Hollo SC, described the new claims against CBA as "tectonic".
Levitt said that when the bank initially suffered a verdict against it, after the joint parliament committee inquiry in 2009, "heads rolled" - but, he pointed out, they were the heads of "fairly minor and quarantined players of the banks".
"Now we're able to flesh out and canvass matters such as misleading and deceptive conduct that go to ethics in the practice of banking," said Levitt.
Mediation is expected to take place by the end of February next year and the trial will run from September 2012.
"There could be negotiations on the way, there's copious discovery that has to occur," said Levitt, adding that his firm, Levitt Robinson Solicitors, had to install $300,000 worth of software in order to handle the discovery from ASIC and the banks.
"These are the costs of taking on the world," he said.