AMP was hit by another class action in Australia last week as the post Royal Commission (RC) litigation war heats up.
Maurice Blackburn Lawyers filed the claim last week in the Melbourne Federal Court on behalf of AMP superannuation fund members that it says could have been overcharged fees dating back to 2013.
Brooke Dellavedova, Maurice Blackburn principal lawyer, said more than 2 million AMP super fund members could have been impacted by the “alleged misconduct” uncovered in the RC hearings last year.
“This class action asserts that AMP trustees breached statutory and general law obligations, essentially paying itself handsome fees from members’ funds. The case we are running will hold AMP to account for that,” Dellavedova said in a statement. “Importantly, the matter will proceed in a way that means no one has to dip into their own pockets to fund the litigation. AMP account holders can band together to recover compensation, in circumstances where most people would not bring a case on their own.”
The class action was backed by UK specialist Harbour Litigation Funding, which would pocket 20 per cent of any settlement of up to $125 million and 10 per cent thereafter.
AMP says the “proceeding will be vigorously defended”.
In a separate move last week, Maurice Blackburn won the right ahead of four other legal firms to lead a class action against AMP on behalf of the comany’s shareholders alleging “misleading and deceptive conduct” in regards to ‘fees for no service’ disclosure practices revealed in the RC.
The Maurice Blackburn ‘no win, no pay’ model offered the best funding approach, NSW Supreme Court Judge Julie Ward ruled.
Under the arrangement, Maurice Blackburn would have to lodge a $5 million security against AMP’s legal costs.
In a statement, AMP says it would “continue to vigorously defend the class action proceeding”.
“AMP denies the allegation that it had information that was required to be disclosed to the market regarding ‘fees for no service’ and AMP’s interactions with ASIC (including in respect of the Clayton Utz report),” the release says.
Maurice Blackburn also lodged an RC-inspired class action – again funded by Harbour – against a major bank this February, accusing Westpac of “irresponsible lending” practices on loans dating back to 2011.
However, the Melbourne-headquartered national legal firm isn’t the only one lobbing class actions in the wake of the RC, which promises to be a feast for Australian lawyers.
Last October, Slater & Gordon filed proceedings against the Commonwealth Bank of Australia and its subsidiary Colonial First State chasing over $100 million in damages relating to a cash investment superannuation option.
“We plan to launch a wave of class actions against big bank-owned super funds that we allege have rorted the system to boost their own profits instead of looking after members,” Slater & Gordon says. “We recognise superannuation can be complicated, but that’s no reason for bank-owned funds to engage in dodgy practices when they should be maintaining your funds in your best interests.
“We’re starting with holding Colonial First State and the Commonwealth Bank to account, but we won’t stop there.”
AMP is facing further court time this month as the Australian financial regulator seeks civil penalties for alleged inappropriate insurance advice offered the group’s financial planning arm.