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6-year class action withdrawn, $11m settlement reached

After running for almost six years, a class action filed against Aveo has been withdrawn, with the retirement giant to pay a “full and final” settlement of $11 million.

user iconLauren Croft 28 March 2023 The Bar
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After first launching the class action six years ago, Levitt Robinson has withdrawn the legal claim — and expressed regret for any suffering caused by the action.

The class action was launched in November 2017, after which hundreds of former residents of the retirement village expressed interest in legal action against Aveo for allegedly having unfair contract terms under a new strategy.

It specifically focused on the changing of freehold titles to leasehold, in a strategic move the company called “the Aveo Way” — which Levitt Robinson previously alleged left freehold property owners at a loss.

 
 

This also followed a joint media investigation by Four Corners and Fairfax, which revealed that Aveo was churning residents through its properties, gouging fees and making misleading market promises.

At the time, Levitt Robinson, which lodged the class action in the Federal Court, estimated that the class action could amount to upwards of $30 million in compensation, as reported by the Sydney Morning Herald.

Plaintiff firm Maurice Blackburn was also investigating a potential class action in late 2017 in relation to alleged breaches of consumer law, but in 2019, it dropped its claim, as reported by the AFR.

“Due to the wide variety of contracts, contracting parties and relevant terms, we have decided not to bring a class action against Aveo. We think it will be difficult to run these cases effectively and efficiently as a class action,” Maurice Blackburn stated at the time.

“We still consider that many people may have a claim against Aveo, but we do not think it is viable to bring these claims together as a class action.”

Without an admission of liability by Aveo, the retirement group has agreed to pay $11 million in full and final settlement to bring this matter to a conclusion after six years of “needless legal action”.

In a statement made today (28 March), Aveo said that the Federal Court was unlikely to find that the Aveo Way contracts were unlawful and thanked its legal team, led by Arnold Bloch Leibler.

“The Aveo Way was introduced to provide many benefits we knew were important to residents at the stage in life they move into our communities. It has proven to be hugely popular with our residents, and we will continue to implement the Aveo Way, along with similar contracts,” the statement said.  

“Aveo has vigorously defended the class action since it was filed in 2017, and we are relieved to have this chapter behind us. Importantly, Aveo hopes that the conclusion of the class action will provide closure and certainty for our employees and the residents of our communities.”

In a statement made on Monday (27 March), Levitt Robinson confirmed the withdrawal of the class action.

“Levitt Robinson acknowledges that the introduction and implementation by Aveo and its related entities of Aveo Way contracts were lawful, in accordance with industry standards and that we are now satisfied that the Federal Court is not likely to find that its introduction has caused current or former residents of Aveo to suffer any loss,” the firm said.

“We express regret for any distress or anxiety which Aveo residents and staff have experienced as a result of or incidental to the Aveo class action litigation.”

The settlement is subject to approval by the Federal Court.