Slater and Gordon raises stakes in AMP class action bidding war

Slater & Gordon has entered the AMP class actions fray, as law firms compete on commissions in bid to attract shareholders.

AMP director and acting chair Mike Wilkins at the company’s AGM in Melbourne last week. (Aaron Francis/The Australian)

A fully-fledged bidding war has erupted among law firms touting shareholder class action lawsuits against AMP over its fee-for-no-service scandal.

Slater and Gordon this morning said its funder, Therium, proposed to charge a commission rate of 10 per cent — but only on the net amount reaped by clients after legal fees are paid.

There are now five shareholder class actions announced or filed against AMP (AMP), which saw its share price shredded after its head of financial advice, Jack Regan, admitted the company had repeatedly misled the corporate regulator over a scandal in which it deliberately charged customers for services they did not receive.

Two of the five law firms circling AMP — Shine Lawyers and Phi Finney McDonald — have yet to tip their hand by announcing proposed commission rates.

The others are proposing rates between 10 per cent and 12.5 per cent, well below the 25 per cent the courts have indicated should be a ceiling for commissions in large-scale class actions.

However, the basis on which the rate is calculated varies from firm to firm.

Maurice Blackburn proposes to charge 12.5 per cent.

Quinn Emanuel Urquhart & Sullivan proposes a rate of 10 per cent, and has pledged it will not seek an uplift in its fees of up to 25 per cent, available to winning lawyers in class action cases.

Slater and Gordon head of class actions Ben Hardwick claimed the firm’s package was the best on offer.

“The choice is clear-cut,” he said.

“Slater and Gordon’s size and scale means we can offer group members the best package of funding terms and credentials in this important class action.”

He said the deal meant Therium had a big incentive to closely supervise Slater and Gordon’s fees.

“When we have compared our hourly rates against other law firms practising in this area we have always been at the lower end of the market and consistently lower than our major competitor,” he said.