AMP given reprieve as judge slams competing class actions

Competing AMP class action firms will face a NSW Supreme Court ‘beauty parade’ before a single class action goes forward.

The Federal Court has given AMP a reprieve by transferring four competing shareholder class actions against the scandal-hit wealth manager to the NSW Supreme Court, where a fifth, but first to be filed, legal suit is already in train.

A full court comprising Chief Justice Allsop and Justices Middleton and Beach of the Federal Court yesterday ruled that four separate class actions, run by Phi Finney McDonald, Slater & Gordon, Maurice Blackburn and Shine Lawyers, would be transferred to the Supreme Court.

Quinn Emanuel Urquhart & Sullivan filed its action in the Supreme Court on May 9, making it the first of the five class actions confronting AMP over the plunge in its share price following revelations at the banking royal commission earlier this year.

The commission heard AMP repeatedly misled the corporate watchdog after deliberately charging financial advice customers for services they did not receive.

The law firms will now face off to see who will be able to take a single class action forward.

“Those actions are transferred into the Supreme Court and then there will be a carriage motion, or as people unkindly call it a beauty parade, to see who continues,” said Damian Scattini, partner at Quinn Emanuel Urquhart & Sullivan. “What we would say obviously is that the ones who filed later are an abuse and they shouldn’t continue as class actions,” Mr Scattini told The Australian.

The cases won’t be transferred for 28 days, to give the competing class action firms a chance to appeal. The ruling criticised the competing class action firms, which had “all within days or weeks of each other, (brought) proceedings on behalf of largely the same group members over largely similar causes of action”.

“Those bringing the action have their own self-interests: any funders for their percentage take, lawyers for their professional fees, and, sometimes, lead plaintiffs for any special position they can negotiate in the overall arrangement,” the judges said.

“There is the risk of procedural arbitrage based on a view by those in control of the litigation as to the likely approach of different judges in different courts not only about the law and facts, but about funding agreements and lawyers’ fees; and the risk of the possible placement of that self-interest above the interest of those whom the court is bound to protect: the group members,” they said.

There is a directions hearing tomorrow which may show how the NSW Supreme Court will take the cases forward.

“Although I am acting against AMP, I sympathise that it would be untenable and unfair for it to face multiple class actions in different courts,” Mr Scattini said.

A spokeswoman for AMP said it welcomed the Federal Court decision to transfer the cases. “Once this occurs we are hopeful that decisions can be made as to the efficient management of all five proceedings,” AMP said. “AMP will continue to vigorously defend the class actions and denies that it breached its continuous disclosure obligations as alleged.”

The five class action law firms have sparked a price war to entice aggrieved shareholders to join their cause.