Class actions could be unviable in Australia with proposed cap on litigation funders' returns

A proposed 30 per cent cap on gross returns to litigation funders would make a large number of class actions financially unviable, new research by PwC chief economist Jeremy Thorpe shows.

When applied to class actions from the past 20 years, the research showed returns in 36 per cent of matters would not have covered the legal costs of running the case, let alone adequate returns to the funder.

Omni Bridgeway CEO Andrew Saker backs a 50 per cent floor on returns to class action members. 

Commissioned by Australia’s largest litigation funder, Omni Bridgeway, Mr Thorpe’s report found even a 50 per cent cap would make some actions unviable and leave Australians without access to justice.

“This demonstrates the trade-off inherent in any cap on litigation funder returns,” the report said.

“It would provide higher returns to some class members, but some members would not receive returns they would have otherwise expected as fewer actions would be undertaken.”

Full story: AFR

Thousands of Aussie tradies could be sued for $642 million if class action succeeds

The key points:

- Shine Lawyers organising class action against ISGM for 4,000 maintenance staff

- Claims they were 'sham contractors' denied leave pay and superannuation

- But ISGM argues they got $61 an hour compared with $35 on employee award

- Therefore if they win the lawsuit, company will counter-sue for the difference.

Thousands of tradies have been warned they could be sued for $642 million if they win a class action lawsuit against a Telstra contractor.

Shine Lawyers is building a massive claim against ISG Management, also known as Tandem, claiming the workers should have been treated as employees.

Instead, they were employed as individual contractors and had to pay for their tools and transport to and from sites where they did Telstra maintenance.

The lawsuit, led by former contractor Robert Mutch, demands back payment of sick leave, annual leave, and superannuation in accordance with the relevant award.

However, ISGM warned it would be forced to counter-sue all the tradies if the claim was successful because it paid them far more than the award.

Tradies have until May 7 to opt out, according to a letter they will be sent, or they will automatically become part of the lawsuit and could be counter-sued.

Documents filed with the Federal Court in Melbourne by ISGM argue it paid more than $1.55 billion to 3,450 workers in 2011 to 2020.

The company's modelling suggested the subcontractors were paid an average of $61 an hour compared to a casual award rate of just $35 an hour.

On average they earned $113,718 a year in the 2018 financial year, compared to $59,000 plus superannuation for a casual working full -time hours.

'This would mean that ISGM would effectively claim back up to $1.55 billion paid to thousands of Australian small businesses over the last nine years and would then pay the award-based employee entitlements to individual employees,' it said.

'This could be catastrophic for small business operators.'

ISGM said it could not afford to effectively pay workers twice for the same work, and would have no choice but to sue for the difference.

Full story: The Daily Mail Australia

McDonald's wins class action: Vanilla flavoring lawsuit against McDonald’s dismissed in the United States

Not all class actions succeed as this report from NLR shows:

McDonald's wins round 1

On March 24, 2021, the U.S. District Court for the Northern District of California dismissed a consumer class action lawsuit against McDonald’s which had alleged various causes of action relating to McDonald’s sale of vanilla ice cream that the plaintiff alleged derived some portion of its vanilla flavor from vanillin rather than vanilla bean.

The Court found that the Plaintiffs had not established that their claim—that consumers were misled by the vanilla flavor labeling—was plausible as required to survive a motion to dismiss. 

Specifically, the court found that the allegations of consumer deception were merely conclusory and did not establish that it was “probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” 

The court noted the labeling regulations that govern the retail sale of vanilla ice cream added no support for Plaintiffs’ claims because they indisputably did not apply to sales at fast-food establishments. 

Additionally, and serving as an independent grounds for dismissal, the court found that Plaintiffs’ had not established that they had paid a premium for the vanilla ice cream; rather the court found it to be “counter-intuitive” in the market context presented.

We have reported on a variety of vanilla flavoring class action lawsuits, many of which have not survived the motion to dismiss stage. 

This case is another demonstration of the difficulty that plaintiffs have had in convincing the court that consumers expect vanilla flavored products to contain not only the flavor of vanilla but also the ingredient vanilla bean. 

Full story: NLR

Priceline faces possible class action from franchisees

Legal representatives say they wish to resolve the dispute at pre-trial mediation or arbitration if possible.

Priceline is facing a potential class action in an ongoing dispute with franchisees who claim Priceline has exerted undue control over their pharmacies.

It is alleged that, in breach of the relevant legislation in Victoria, NSW and Queensland, the franchise agreements contain provisions that assert a level of control over franchisees, require franchisees to pay unfair fees, and provide one or more of the Priceline Companies with direct or indirect monetary or financial interest in the pharmacies.

While the class action has not yet been commenced, all documents necessary to launch the action have reportedly been prepared and duly settled by the Hon Ron Merkel, QC, former Justice of the Federal Court of Australia.

Examples of Priceline’s alleged controlling provisions in the franchise agreements include requirements to stock the Merchandise Range, which is determined by Priceline; place orders through the Auto-Replenishment system; only order through API; and price items as determined by Priceline.

Soon-to-be lead applicants, Chris and Jenny Lemon, had bought into two Priceline pharmacies – one in Sydney’s Central Park and one in Manly – and currently own an independent pharmacy in Frenchs Forest, Sydney.

“As an owner of multiple pharmacies … I was able to see firsthand the difference in the in-store pricing available to me. When I went into Priceline, I expected that the buying at Priceline would significantly better than my independent store, which is with Pharmacy Alliance. But that wasn’t the case at all, in fact the terms were worse,” said Mr Lemon.

Mr Lemon highlighted issues with Priceline’s auto-replenishment system.

“What we noticed was we were getting too much stock of the slow sellers and not enough stock of the fast sellers,” said Mr Lemon. “If you miss two sales to one customer on a line that you’re expected to have, you miss that customer, they’re gone.”

He also alleges that on numerous occasions, API promised and withheld rebates to his businesses.

AJP understands that Mr and Ms Lemon no longer own the Priceline pharmacies.

Stewart Levitt, the Senior Partner at Levitt Robinson Solicitors, said the action will be directed at obtaining compensation for franchisees’ past losses.

This includes recovering damages for the loss of opportunities to acquire stock from API’s competitor at a better price, and/or to obtain rebates from alternative suppliers.

The action also aims to “add value to franchisees’ sizable investment in Priceline through a new, mutually beneficial and legally compliant franchise agreement”.

“Levitt Robinson understands that many Priceline franchisees do not wish ‘to rock the boat’ through litigation, which is why we are committed to take all genuine steps to resolve the dispute at pre-trial mediation and/or arbitration,” Mr Levitt told AJP.

“The ‘boat is already rocking’: State regulators are already investigating the level of control Priceline exerts on franchisees through the Franchise Agreement and, as a corollary, any contraventions of legislation designed to protect the integrity of the pharmacy profession,” he said.

Priceline pointed out that, as of today, there is still no class action against Priceline Pharmacy.

“Apparently, it can only proceed if enough franchisees agree to a funding agreement. We understand the lead applicant in the proposed action is a former Priceline franchisee who is no longer with the brand,” Andrew Vidler, GM Priceline Pharmacy told AJP.

“Priceline remains focused on supporting our franchisees through these difficult times and doing our utmost to help ensure that they can fully play their role in the distribution of COVID-19 vaccinations. We will protect the brand and business we have built together. We have no further comment to make on this matter,” he said.

Full story: AJP

Class action update: Blue Sky action push gets a boost

Momentum for a class action against Blue Sky has accelerated after a small shareholder obtained access to the collapsed fund manager’s books.

The investor, David Furniss, an accountant, also is being allowed by Queensland’s Supreme Court to view key insurance documents covering director’s indemnity.

The granting of rights to inspect investment, audit and insurance documents could help determine the viability of class-action lawsuits over the failure of ASX-listed Blue Sky Alternative Investments.

“This decision is important because it finally gives us access to Blue Sky’s books and records,” said Piper Alderman partner Lachlan Lamont, whose firm initiated the Supreme Court action.

“We can now conduct a forensic analysis of Blue Sky’s accounts and valuation procedures which will help us particularise the shareholders’ claims.”

Piper Alderman, Shine Lawyers and Gadens are among law firms investigating Blue Sky’s accounts to see if any questions arise about disclosures to investors in the former market-darling, which was once valued at more than $1 billion.

“We are still investigating and I am aware of that decision ... which I think is a good decision because ultimately it will probably save everyone time and costs if access to key documents is granted earlier rather than later,” Shine class actions practice leader and former Australian Securities and Investments Commission senior lawyer Craig Allsopp said.

Brisbane-based Blue Sky oversaw funds with assets from a burrito chain to property investments, posting rocketing profits and share prices.

But the wheels fell off after Glaucus Research, short-sellers that make money from share prices falling, dispatched research in March 2018 casting doubt on areas from how Blue Sky was valuing investments to the amount of assets under management.

Blue Sky rejected the claims but tumbled into administration in May 2019.

Justice Graeme Crow, in a decision handed down in Rockhampton last week, said that Mr Furniss had purchased 722 shares in Blue Sky at $13.80 per share, $9963.60 in total, on January 18, 2018. “Some 15 months later his shareholding was worthless,” he wrote.

“[Precedent] cases demonstrate that the pursuit of a reasonable suspicion of a breach of duty is a proper purpose for a substantial shareholder, and in my view, it is also a proper purpose ... for a small shareholder, despite the quantum being much smaller, the rights of the shareholders are the same.”

Justice Crow wrote that there was “substantial support” for the conclusion that there was a case for investigation based on some of Blue Sky’s own market statements after the short-selling critique.

That included Blue Sky stating in April that “it is clear that Blue Sky has fallen short of market and shareholder expectations around transparency and disclosure”. 

Another announcement Justice Crow cited was Blue Sky in May saying an “immediate priority is to rebuild trust with stakeholders by making significant changes to the business and management model”.

The court granted access to documents from July 1, 2015, to May 20, 2019, the day Blue Sky was placed into voluntary administration.

“Mr Furniss is not a stranger to Blue Sky, but rather a shareholder who has a right to inspect documents if he can prove, as he has, that he is acting in good faith and for a proper purpose,” Justice Crow wrote.

Mr Furniss has been granted access to look at any indemnity insurance policies that covered Blue Sky or any of its directors and executives between July 1, 2015, and June 30, 2020. The quantum of any insurance policies would outline what a potential class action could go to court to seek damages for.

However, Mr Allsop said shareholders looking to mount an action against Blue Sky and former directors or executives will likely have to wait for a deed of company arrangement, which has been in place since June 2019 and included a moratorium on claims against the company, to be executed or come off. It will also likely require leave from the court to launch a class action.

Former Blue Sky director and head of venture capital Elaine Stead, who was successful in defamation proceedings brought against The Australian Financial Review over two columns in 2019, gave testimony in her action that touched on Blue Sky’s legal requirements about disclosure of information.

Under cross-examination by defence barrister, Sandy Dawson, Dr Stead said an article published by the Financial Review that had previously been published in June 2017 was “incorrect”.

That Financial Review article stated Blue Sky’s $3 billion of assets were evenly split across property, real assets, such as infrastructure, and finally private equity and venture capital.

Full story: AFR

Class Action Update: McDonald's says 10 minute breaks for workers should be taken in minute-long breaks

This class action submission by McDonald's Australia as reported by Adelaide Now beggars belief:

"Macca’s workers should have taken breaks in minute-long blocks.

More than 60 ex-workers suing McDonald’s for underpayment should have taken breaks in minute - or minutes - long blocks, the fast food giant will argue."

Key link: Adelaide Now

Teenagers launch class action against Minister Sussan Ley over Vickery coal mine

The Environment Minister Sussan Ley is being taken to court in a landmark case that could shape the future of Australia’s energy policy.

A new report from CSIRO and BOM has warned us about the worsening effects of climate change.

A group of teenagers has taken Environment Minister Sussan Ley to court, claiming her approval of a NSW coal mine violates her duty of care to future generations.

A group of eight teenagers from around Australia are driving a class action against an extension to the Vickery coal mine in regional NSW, given the green light by Ms Ley.

The landmark case, which is in the Federal Court on Tuesday, could have dramatic implications for the future of the country’s energy.

Anj Sharma

The 16-year old lead complainant Anj Sharma warned the project would burn roughly 370 billion tonnes of carbon emissions over its lifetime if it went ahead.

“She really needs to understand that she’s the one who’s making decisions that we are going to live with, that we are going to have to raise the next generation under,” she said.

“She owes a duty of care to all young people (and) to all marginalised people to make decisions that will guarantee a secure future for us.

“By approving this coal mine she (is) choosing (to) directly violate that duty of care. This is not the path that we can afford to have Australia and the world on.”

The group is headed by their legal guardian, 86-year old nun Sister Brigid Arthur.

The group was approached after the 2019 School Strike 4 Climate marches by lawyers who had been working on case theory “for a very long time”, Anj revealed.

If successful, their case could set a precedent preventing the federal government from approving future coal mines.

Anj said their legal team was “really excited” about its prospects but claimed the group was “building momentum” regardless of its success in court.

“I wish I was a fortune teller, but I really can’t tell you (whether the case would be successful),” she said.

“(But) this is a monumental case whether it wins or not. I’m really proud, and all the other students are really proud, to be doing something against the coal mine.”

Anj said an increasing number of natural disasters globally showed it was time for Australia to shift its energy focus to renewables.

“The world is facing the climate crisis and people are becoming climate refugees. We are at a point right now in the world where we just can’t let that happen,” she said.

“This coal mine will not be the right path to the future.”

Minister Sussan Ley

Ms Ley declined to comment on a case before the courts.

A similar case brought by teenagers in the Netherlands was successful in 2019 when a Dutch court ordered the government to curb emissions by 25 per cent.

It was the first time a nation was ordered to take action on climate by its courts.

It followed a group of Colombians, aged between seven and 26, successfully suing their government in 2018 over its failure to halt deforestation in the Amazon rainforest.

Full story: ABC

$150 million class action launched against SA Power Networks over Cudlee Creek bushfire in Adelaide Hills

A class action lawsuit seeking $150 million for victims of the 2019 Cudlee Creek bushfire in the Adelaide Hills has been lodged with the South Australian Supreme Court.

Key points:

- The Cudlee Creek bushfire swept through the Adelaide Hills in December 2019

- It was caused by a tree falling on power lines

- A law firm is suing SA Power Networks for damages

Maddens Lawyers is seeking compensation for up to 1,000 victims of the blaze, which destroyed more than 90 homes and killed one person in December 2019.

It claims SA Power Networks' inadequate fault protection settings led to the bushfire, which started when a tree fell on power lines and then a fence.

Brendan Pendergast the Victorian law firm Maddens Lawyers said South Australia's energy distributor knew it was a catastrophic fire danger day, with a total fire ban in place.

"And yet we see in the Office of the Technical Regulator's report that the fault mechanisms were adjusted to normal settings and quite alarmingly the auto-reclose device operated twice so it de-energised the line and then re-energised it after the tree fell on the line and brought it down to the ground," he said.

Cudlee Creek bushfire burning in
the Adelaide Hills threatened the
 town of Lobethal.(ABC News)

In its report on the fire released in August, the Office of the Technical Regulator said it "could not identify any indicators that could have enabled a reasonable person to identify this tree failure prior to the event".

Mr Pendergast said he would present experts who said the tree was already "severely compromised" three years before the fire and should have been identified as "dead, dying or dangerous".
Range of losses from bushfire

He said losses went beyond the destroyed homes and 1,000 hectares in damaged vineyards.

"One person tragically lost their life, more than 50 firefighters were injured and many of the citizens living up there had suffered psychological or psychiatric injury as a result of the trauma of the bushfire experience," he said.

"So we're seeking to recover compensation for those aspects of the fire as well."

An SA Power Networks spokesman said the company had not yet seen "the detail of the claim" but would defend its actions.

"An independent government report concluded the fire start was due to a tree falling from outside the vegetation clearance zone surrounding power lines, and that SAPN had acted in accord with its bushfire and vegetation management procedures and equipment settings," he said.

SA Power Networks is controlled by Hong Kong billionaire Li Ka-Shing.

Maddens Lawyers is also representing victims of the November 2019 Yorketown bushfire, which was caused by a power network fault.

That case is heading to court-ordered mediation next month.

"We're optimistic that proper resolution can be achieved at that time rather than taking the matter before the court for a determination," Mr Pendergast said.

Mr Pendergast's firm has been involved in a number of lawsuits relating to bushfires, starting with the Ash Wednesday fire that struck the Adelaide Hills and parts of Victoria in 1983.

Full story: ABC News

Victorian public housing residents file class action after surviving off "nuts and beans"

Public housing tower residents have filed a class action over the lockdown in Victoria, claiming they survived off ‘nuts and beans’.

Residents and neighbours are shining a light on conditions in the nine locked-down housing commission towers through social media with one resident saying it was ‘worse than prison’.

Public housing tower residents shut inside their homes during Melbourne’s lockdown are suing the Victorian government claiming they were left without food and medication.

A claim was filed in the Victorian Supreme Court last week, alleging residents are owed damages for the “invalid”, “oppressive” and “degrading” lockdown that failed to consider human rights.

More than 3000 people were locked inside nine apartment towers from July 4 to either July 9 or July 18 last year, before the entire state went into hard lockdown on August 2.

The claim alleges lead plaintiff Idris Hassan and his family were supplied with “spoiled” food after being banned from buying groceries.

After being provided nothing for three days they were given four partially-defrosted sausage rolls, placed at the door step, that were “not fit for human consumption”, it alleges.

Ms Hassan and his nine-year-old son suffered asthma attacks after they ran out of medication, with the family surviving on “nuts and beans”, it alleges.

Victoria’s Deputy Chief Health Officer Annaliese van Dieman is named as the first respondent in the suit, along with Deputy Public Health Commander Finn Romanes, Chief Commissioner of Police Shane Patton, and the state of Victoria.

Residents were deprived of access to fresh air, exercise and occupational activities, it is claimed.

They were exposed to health risks as communal areas were not disinfected, and PPE was not provided, despite the presence of COVID-19 in the towers, it is alleged.

Government workers left bins overflowing and some residents lost their jobs after being unable to work during the lockdown, it is claimed.

The claim alleges they were “not consulted” about the lockdown, which banned them from leaving their homes without approval.

“Some time on 4 July 2020, prior to 3.30pm, (Victoria Police) decided to deploy hundreds of Victoria Police officers to the Estate Towers to enforce the detention of the residents of those towers,” the claim states.

It alleges Ms van Dieman had 15 minutes to review, sign, and consider the human rights implications of the lockdown before a press conference scheduled for 4pm on July 4.

It claims she “felt constrained” to approve the directions and “considered that she could not delay signing” before the press conference, which she appeared in alongside Premier Daniel Andrews.

“(She) allowed the decisions of third parties, or their actions and attitudes, to control the way she exercised her discretion,” the claim alleges.

The lockdown was not explained at the time to the residents of the towers, according to the claim.

“The decision not to inform the residents of these matters was not governed by questions of practicability, but was a deliberate decision made to ensure that the residents did not go elsewhere,” it alleges.

“Intimidating conduct” by Victoria Police officers also began “triggering pre-existing trauma” in some residents, the claim alleges.

The lead plaintiff, Mr Hassan, is a Somalian refugee who arrived in Australia after fleeing civil war.

He fled his village in 1990 when it was targeted by soldiers and made his way to Australia with his six siblings, making it to Australia in 1998.

At the time of the lockdown he lived in the public housing tower in Sutton Street, North Melbourne, with his wife and three children aged 9, 7 and 4.

About an hour after the lockdown began Mr Hassan asked a police officer for permission to buy groceries and medical supplies and was refused, it is alleged.

No food deliveries were made to him for several days and authorities “refused the Australian Muslim Social Services Agency permission to deliver culturally-appropriate food supplies to the residents”, it is alleged.

He ran out of asthma medication and despite calling a hotline number played on television, was not delivered medication in time and suffered asthma attacks, the claim alleges.

The medication was supplied on July 8, four days after they were locked inside the towers, the claim says.

Food supplied was not halal, a requirement of their Muslim faith, and Somali interpreters were not engaged in explaining why they had to go COVID-19 testing, it is alleged.

Residents were tested for COVID-19 “without giving their full, free and informed consent and, or in the alternative, under duress”, the claim alleges.

The class action is being run by solicitor Serene Teffaha of law firm Advocate Me.

It will be heard in the Supreme Court at a date to be set.

Full story: News.com.au

750,000 CBA customers receiving class action letters

Slater and Gordon says more than 750,000 people will today receive a Federal Court notice advising they may be eligible to be part of a consumer credit insurance class action against Commonwealth Bank.

The action alleges that many people were sold “junk” credit card and personal loan insurance that was of little or no value and that many customers would not have been eligible to make successful claims.

The firm has also commenced similar class actions against ANZ and Westpac, while a suit against NAB in 2019 secured a $49.5 million settlement.

Slater and Gordon says Commonwealth Bank had said it would provide refunds as part of a remediation program, but only a small portion of customers had been compensated, despite sale of the products ending in March 2018.

“This move to return only a small portion of its customers premiums seems to have been a tokenistic effort to protect the bank’s brand, rather than a genuine attempt to make good its past wrongdoing,” Practice Group Leader Andrew Paull said.

Consumers may be eligible to join the action if they were issued with a consumer credit insurance policy since January 1 2010, have paid a premium and have not been paid back in full.

More than two million people have now received court-ordered notices advising they may be eligible to participate in one of the four class actions, which is part of the Get Your Insurance Back campaign.

Full story: Click here

Bank of Queensland facing potential class action by shareholders over capital raising fiasco

Will the Bank of Queensland’s shareholder rip-off lead to a class action?

The effects of Bank of Queensland fleecing of thousands of investors can already be seen in the market. 

What next for aggrieved investor shareholders?

The Bank of Queensland (BoQ) capital raising fiasco for retail investors covered in Crikey last week has already had an impact on the market, with share registry giant Computershare yesterday unveiling an $835 million capital raising - which showed it had learned all of the key lessons.

First up, Computershare didn’t include any form of selective institutional placement in its capital raising, instead launching the 34th so-called PAITREO offer seen on the ASX — a pro-rata structure which treats all shareholders equally and is renounceable, meaning that non-participants are automatically compensated for their rights.

Just like with BoQ it was global investment banking giants Goldman Sachs and UBS teaming up on the Computershare deal, but this time they are giving retail investors 19 days to participate rather than the minimum 10 days.

However, Australia Post has become so unreliable that even 19 days might not be enough.

BoQ has around 110,000 shareholders and more than 30,000 are based in WA, courtesy of the bank’s 2007 takeover of the Perth-based Home Building Society. Crikey has received correspondence from one Perth-based BoQ shareholder who got the 118-page offer document on March 24, 14 days after it closed on March 10.

How 70,000 small Bank of Queensland shareholders were fleeced of $118mRead More

BoQ has privately informed the ASX that it has so far received 450 complaints from shareholders about receiving the offer document after the offer closed. But this only captures the shareholders who have gone to the trouble of complaining. The total number affected will be in the tens of thousands.

Neither ASX, ASIC or BoQ appears to be planning any corrective action to compensate these shareholders for their losses, leaving the only option as a class action.

I wrote to ASX chair Rick Holliday-Smith complaining about the BoQ offer and his compliance boss Kevin Lewis came back saying that ASX “sympathises with those BoQ shareholders in remoter areas who missed out on BoQ’s retail offer due to Australia Post’s less frequent delivery schedules”, but isn’t proposing any changes to the listing rules.

The two obvious changes would be to extend the minimum 10-day offer period and ban non-renounceable offers so that all non-participants are automatically compensated for their surrendered rights.

In the case of BoQ it was an estimated 70,000 retail shareholders who didn’t participate, leaving a $274 million shortfall on the $682 million retail offer, which was picked up by institutional underwriters who are around $50 million in front on their investment.

However, the true retail shortfall was actually slightly more than 40% because BoQ has conceded that $30 million of the $408 million shares accepted in the retail offer were actually from the earlier $323 million accelerated institutional entitlement offer.

As Crikey reported, BoQ told the ASX that 98% of available shares were taken up by eligible institutions, but this wasn’t strictly true.

Yes, around 2% of the institutional offer or $7 million in shares were explicitly rejected but around $30 million worth of institutional entitlements lapsed because the investment bankers weren’t able to make contact with the relevant institutions before the February 22 deadline.

Rather than being shafted without compensation like what happened to the 70,000 retail shareholders, the owners of these institutional entitlements were allowed to double-dip by coming in through the subsequent retail offer which opened on March 1.

Think about that for a moment. When tens of thousands of retail investors were sent an offer document that arrived after the offer had closed, which is surely the equivalent of not being contactable in time, neither the regulators or the company itself is proposing to do anything about it. Yet when UBS and Goldman Sachs can’t track down an institutional investor, they get to masquerade as a retail investor and are given an extra two weeks to participate.

I had a one-hour video call on Tuesday with BoQ chairman Patrick Allaway, where I let him know in very clear terms what a dreadful situation this was. Given the legal constraints preventing BoQ from reopening its now closed retail offer, I pitched him the idea that the bank should launch a compensatory discounted share purchase plan exclusively for retail investors.

Sure, BoQ doesn’t need to raise big licks of additional capital to fund its $1.35 billion purchase of ME Bank, but having diluted its retail shareholders down from owning 63% of the bank to just 57% without paying them any compensation, it is the least they could do.

Meanwhile, discussions continue with class action lawyers. It seems like a pretty open and shut case as this email from a bank shareholder explains:


Hi Stephen,

I am an aggrieved BoQ shareholder with over 14,000 BoQ shares. My losses would be in order of $10-20k as a result of not being able to participate in the entitlement offer (received docs day after close).

I am interested in joining any class action or supporting you in any way I can, as it pertains to seeking investor advocacy through ASIC/ASX.

Regards,

Paul

The issue is running pretty hot in Queensland after The Courier-Mail last week ran a page one pointer to this full length business column spelling out the farcical situation with Australia Post.

The AFR’s Rear Window column also gave it a solid burst, pointing out that even Merrill Lynch investment banker David Goffage, who invented the PAITREO offer, received his BoQ offer documents in Brisbane two days after the offer had closed.

Full story: Crikey

Subscribe to Crikey: Click this link

Junior doctors in Victoria commence class action claiming systemic underpayment by public hospitals

An AMA Victoria survey last year found junior doctors were working an average of 16 hours overtime a week.

Legal action has begun on behalf of junior doctors, who say they have been deliberately underpaid after working overtime in Victoria's public health system.

Key points:

- Legal action has been filed against Peninsula Health for alleged underpayment of overtime

- Lawyers say they are planning to bring other class actions against services in the public system

- Some doctors say they are afraid to raise concerns for fear of upsetting their superiors.

A class action has been filed in the Federal Court against Peninsula Health, alleging the underpayment of a junior doctor.

Lawyers are planning to bring other class actions, amid claims of systemic underpayment by other health services in the public system.

Lawyer Hayden Stephens said some junior doctors were working up to 25 hours a week beyond their rostered hours, and many of those hours were unpaid.

"That, in combination with their own genuine concern that this will impact their care and ability to look after patients, together with their own mental health, are issues in which we are calling Victorian health services to address," he said.

Mr Stephens said the legal action could ultimately affect more than 10,000 junior doctors in Victoria.

"This is a claim for unpaid entitlements, it's not a claim seeking additional wages."

"It's nothing more than junior doctors employed in the Victorian health system being paid for their hours work and their fair entitlements, entitlements that have been agreed to by their very own employers."

In a statement, Peninsula Health's Chief Medical Officer, Shyaman Menon, said the organisation "respects the rights of all staff, including the receipt of any payments to which they are entitled."

"Our junior doctors are the future of our organisation and we acknowledge the important contribution they make across all our hospitals and healthcare sites," Dr Menon said.

Doctors reluctant to complain about overtime

Doctor Karla Villafana-Soto said she had been so exhausted after working overtime on shifts that she had made mistakes with medication and doses, that had luckily been caught by other staff.

She claims the underpayment of junior doctors for overtime they've worked is widespread in the public hospital system in Victoria.

"This is now my eighth year of being a junior doctor and I've worked at several health services in Victoria, and I can tell you this is happening everywhere," she said.

"The class action has come up really as a point of last resort after, for many years, many of us have tried to get this issue addressed, and it just hasn't been."

Dr Villafana-Soto claims junior medical staff are reluctant to raise concerns about underpayment for fear of getting their superiors offside.

"You learn very quickly that upsetting supervisors or hospital administration will possibly result in you possibly not getting a job the following year, because most of us are employed for 12 months at a time," she said.

The Victorian President of the Australian Salaried Medical Officers Federation, Roderick McRae, said it was impossible to estimate the true cost of properly paying junior medical staff in Victoria's public health system.

"Everybody understands they're in the game to look after patients, so they're not going to down tools," he said.

"At the same time, there needs to be a reasonable balance and appropriate compensation when those events occur.

Legal action has been filed against Peninsula Health, which operates Frankston Hospital, for alleged underpayment of overtime.

The legal action is being supported by AMA Victoria, which is calling for more doctors to come forward and join the class action.

An AMA Victoria survey conducted last year found junior doctors were working on average 16 hours of overtime a week, mostly without pay.

Full story: ABC News

South Australian doctors explore class action for "wage theft" following NSW and Victorian actions

Junior doctors in South Australia are “strongly considering” launching a class action against SA Health for systemic “wage theft” over “unpaid overtime”, following similar legal moves interstate.

The SA Salaried Medical Officers Association has begun discussions with lawyers handling class actions in New South Wales and Victoria.

SASMOA chief industrial officer Bernadette Mulholland told InDaily “wage theft” was a major problem for overworked junior doctors and “not confined to the eastern states”.

“SASMOA is strongly considering taking similar legal action to recover wages for junior doctors,” she said.

“SASMOA is undertaking preliminary work and has spoken with the lawyers representing medical officers in NSW and Victoria for wage theft.”

Mulholland said “our investigations validate that wage theft for junior doctors is widespread in health”.

“These doctors are pressured to attend well before the commencement of their rostered shifts, do not get their meal breaks and work unpaid overtime,” she said.

“Hospital administrators know it happens but it is ignored.”

A class action was launched last week against a Victorian health service, amid claims of systemic underpayment of junior doctors.

It follows a class action launched in December on behalf of early career medicos in NSW against health authorities there, over “exploitative work conditions”.

Law firms Maurice Blackburn Lawyers and Hayden Stephens & Associates said the action was based on a claim for “underpayment of wages” for junior doctors.

“It is a claim to seek recovery of payment for the extensive unpaid overtime performed by doctors,” the lawyers said in a statement at the time.

Lawyer Hayden Stephens said the “no-win, no-fee” NSW class action could involve more than 10,000 junior doctors, many of whom were worried about patient safety “after being pressured to work unpaid overtime to the point of exhaustion”.

Mulholland said the problem had also been going on for too long in South Australia.

She said the union had surveyed members late last year on matters that should be addressed during the latest round of enterprise bargaining.

“The number one agenda item that trainee doctors raised was putting an end to ‘wage theft’, including a penalty imposed on the employer for breaching excessive hours worked by junior doctors and fatigue provisions,” she said.

Mulholland said one trainee doctor had stated in the survey: “There is significant destruction to the morale of the workforce too fearful to claim actual hours worked. Cost cutting always seems to pressure junior doctors, who are unable to assert themselves as they are reliant upon reports from those that sign their timesheets and are placed on annual contracts. Staff are continually coerced to not claim.”

The union has requested a specific clause in its new enterprise agreement “that junior doctors get paid for the hours they work”.

“This may seem silly to some but in an environment where you regularly do not get paid for the hours worked it is necessary to spell it out to the hospital administrators,” Mulholland said.

“Making junior doctors work well beyond a rostered shift has implications for patient care and results in fatigues and low morale.”

A spokesperson for SA Health said: “Negotiations for a new SA Health Salaried Medical Officers Enterprise Agreement have commenced and without prejudice discussions are taking place between Department of Treasury and Finance (as the declared employer), SA Health and SASMOA.

“These discussions will be guided by principles of fairness and accountability.

“Medical Officers are highly-valued members of our workforce and it is our intention to progress with negotiations in a timely manner, ultimately delivering a package that supports Medical Officers and the wider system to continue to deliver high quality health services.”

Health Minister Stephen Wade said “we are aware that these matters are being discussed as part of negotiations for a new enterprise agreement”.

“We support doctors getting paid for the work that they do,” he said.

Full story: InDaily

Class action planned to challenge Australia's new IR laws

The mining union and class action lawyers are considering challenging the Morrison government’s newly passed industrial relations laws in a bid to allow casuals to claim holiday pay on top of their loading as far back as six years.

The government’s stripped-back legislation passed Parliament on Monday, cutting billions of dollars in potential backpay by allowing employers to offset casuals’ 25 per cent loading from any permanent benefits owed due to regular and long-term hours.

Adero Law founder Rory Markham says IR laws have never been retrospective before. 

However, the laws also apply retrospectively, including to eight ongoing court cases against the mining industry that total hundreds of millions of dollars, and could cut workers’ claimed compensation in half.

Employers have hit back at the threats, arguing a challenge would increase uncertainty and threaten thousands of jobs while allowing casuals to “double dip” on their entitlements.

Canberra law firm Adero, which is running most of the class actions, said it is getting advice on whether one of its members can launch a challenge to the laws in the High Court.

“Australia has never had a history of retrospective laws in the IR context,” Adero principal Rory Markham said.

“It would be Adero’s expectation that a High Court challenge to the constitutionality of the recent legislation will be run soon by an interested party, putting in issue whether the Commonwealth has acquired property other than on just terms.”

Under section 51 (xxxvi) of the constitution, the Commonwealth cannot compulsorily acquire property, including entitlements to money, without paying just terms and compensation.

Mr Markham argues the “property” in question is more than 1 million workers’ accrued entitlements over the past six years.

“The Commonwealth’s own estimates consider that more than $14 billion has now been taken from Australian workers who can no longer apply the pre-March 18 laws.

“The very laws that have applied consistently since the introduction of the Fair Work Act on July 1, 2009.”

The CFMEU’s mining division is also getting legal advice over a challenge for its class action against labour hire firm Workpac but declined to comment.

The union has argued that labour hire in the mining sector engages casuals on less than the market wage of their permanent colleagues and then works them like full-time employees on rosters issued 12 months in advance.

The Federal Court held a regular casual miner was a misclassified permanent entitled to paid leave and redundancy, and their 25 per cent loading did not offset this because it failed to specify the benefits it accounted for.

The ruling raised questions about how far such principles would extend to other “regular casuals” employed in sectors such as health, universities or even retail, and the government estimated it could lead to backpay bills for business of up to $39 billion.

Unions argue the ruling is limited to the round-the-clock circumstances of the mining sector.

But new accounting standards last year required 25,000 companies to calculate their liability over entitlements to casuals who may be permanent employees.

Deakin University constitutional law professor Dan Meagher said constitutional challenges over retrospectivity are a “notoriously difficult and complex area” but noted they had worked in relation to workers’ compensation cuts.

‘Completely out of touch with reality’

Australian Industry Group chief executive Innes Willox said talk of a constitutional challenge by overseas-backed class action lawyers was “not in anyone’s interests other than their own”.

“It is very likely that any constitutional challenge will fail but the uncertainty associated with any challenge would only damage employment and the economy,” he said.

Australian Mines and Metals Association chief executive Steve Knott said, without retrospectivity, “the issue would have sent large employers as well as many small and family businesses to the wall”.

Australian Chamber of Commerce and Industry acting chief executive Jenny Lambert said “reopening double-dipping claims is completely out of touch with the reality facing many small businesses who employ casuals as they seek to cope with the end of JobKeeper and recover from the impacts of COVID-19”.

Acting Minister for Industrial Relations Michaelia Cash said the government was “confident in the validity of the measures in the bill”.

“Failure to address the double-dipping issue would be catastrophic for jobs and businesses. Businesses would otherwise face additional costs of up to $39 billion – an impost that would lead to thousands of job losses and business closures.”

Full story: Australian Financial Review

ANZ Bank share price under scrutiny after settling US class action

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price could be on the move this morning.

This follows the release of an update on a class action brought against it in the United States during 2016.

What was the class action?

Back in 2016, ANZ confirmed that it was among 17 banks and two international brokerage houses that were named in a class action complaint launched in the United States by two US-based investment funds and an individual derivatives trader.

This related to allegations of the rigging of the bank bill swap rate (BBSW) and bank trading in the United States. 

The BBSW is an independent reference rate that is used for the pricing securities.

In 2017, ANZ acknowledged to ASIC that, during the course of trading on the BBSW market, a small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012. 

The bank also admitted that it did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders.

What was today’s update?

This morning ANZ announced that it has reached an agreement to settle the class action brought against it in the United States during 2016.

The settlement is without admission of liability. It also remains subject to negotiation and the execution of complete settlement terms, as well as court approval.

The good news for shareholders, and also the ANZ share price, is that while the terms of the settlement remain confidential, the financial impact of the settlement will not be material.

The bank has not commented on the settlement today. 

However, back in 2017, the company’s Chief Risk Officer at the time, Nigel Williams, commented on the issue.

He said: “We know our customers and the community expect better from us and we apologise for both the attempted unconscionable conduct and our inability to prevent or detect the behaviour.”

ANZ share price performance

The ANZ share price is up over 22% since the start of the year. 

Investors will no doubt be hoping this strong run can continue now this issue is behind the bank.

Full Story: Motley Fool

New pelvic mesh implants class action against Boston Scientific launched by Shine Lawyers

Lawyers behind a landmark class action over damaging Johnson & Johnson pelvic mesh implants have filed a new suit on behalf of women allegedly harmed by other pelvic implants.

Multinational medical device maker Boston Scientific is accused of acting negligently and selling implants that were not fit for purpose or of acceptable quality, the case filed in the Federal Court on Monday alleges.

One of the women included in the class action says she has been in constant pain since an Obtryx sling was implanted to reposition her bladder in 2012.

"It has been 9 years of suffering," Deborah Stanford said in a statement on Monday.

"If I knew how hard this was going to be, I never would have gone through it."

Ms Stanford has had nine operations, including one that reduced her bladder capacity to 15 per cent, and now has her husband act as her full-time carer.

She is on strong pain relief and says urinating "feels like a piece of sandpaper is being rubbed down there."

The statement of claim alleges the devices - supplied on the advice of the patients' treating doctor to treat pelvic organ prolapse or stress urinary incontinence - caused chronic pain, organ damage, new incontinence issues and other complications.

Rebecca Jancauskas

The class action, using a Melbourne mother-of-five Debra Fowkes's experience as a case study, alleges Boston Scientific failed to properly warn patients about the nature and severity of the risk of developing such complications.

"There are few painkillers that exist that allow you to function normally, and manage the agony that pelvic mesh can cause," Shine Lawyers' class actions practice leader Rebecca Jancauskas said in a statement.

                                               Full story: The Young Witness

Maurice Blackburn Lawyers with an unparalleled record in Australian Class Actions

Maurice Blackburn Lawyers, established in 1919, is regarded as the leading Class Action legal firm in Australia. Their website lists their extensive experience and ongoing string of successful class actions:

Class actions
We're Australia's leading class action practice with an unparalleled record, having obtained more than $3 billion for our clients.

Our class actions

About class actions

Australia's no.1 class actions law firm

Class action industry news

Our class actions

CURRENT

SETTLEMENT ADMINISTRATION

PAST


Roundup class action
Register today

NAB MySuper class action
Register today

Boral shareholder class action
Register today

Crown Money Laundering Risk Class Action (Crown Resorts II Class Action)
Register today

Car Loan Flex Commission class actions
Register today

Car Dealer Add-On Insurance class actions
Register today

NSW Junior Doctors class action
Register today

Business Interruption Insurance Class Action Investigation
Class Action Investigation

BHP class action
Sign up now

Uber class action
Register today

Colonial MySuper class action
Register today

Optus Data Breach
Register & enquire today

AMP super fees class action
Sign up now

Treasury Wine Estates class action
Register today

Westpac loans class action

Foreign Exchange Cartel class action
Register today

AMP shareholder class action
Register today

Brambles class action
Sign up now

Commonwealth Bank of Australia class action
Register today

Crown Resorts class action
Register today

Lendlease class action
Register today

Montara oil spill class action 

Awaiting judgement

NT Youth Justice class action
Register today

Queensland floods class action

Slater & Gordon – Third-Party Shareholder Class Actions

Vocation class action

Woolworths class action
Register today

Pro-bono unlawful detention of people seeking asylum class action
Register today

About class actions

What is a class action?
Class actions provide a powerful voice to those who otherwise would be denied any measure of justice and redress. They are an important part of the legal system that enables disputes and claims involving potentially large numbers of people to be resolved in a single case, allowing ordinary Australians to hold large and powerful organisations accountable when they have engaged in serious misconduct.

How do class actions work?
Where seven or more people have claims that arise out of similar circumstances, a class action can be brought by one claimant on their own behalf and as a representative of others. The class action process saves time and expense and avoids the need for the courts to determine common issues of fact or law more than once, enabling disputes and claims involving large numbers of people to be resolved via a single case.

What are the benefits of joining a class action?
Class actions allow victims of mass wrongs to group together to protect their rights and fight for fair compensation. They allow the recovery of losses more fairly and efficiently, and at less individual cost.

Often, one individual lacks the resources to take on a large corporation. But if enough individuals have experienced the same wrongdoing, collectively they can become a powerful force and strong voice for justice.

Class actions are a force for greater corporate and social responsibility and accountability and all Australian consumers and businesses can potentially benefit from their outcomes.

What does it cost to join a class action?

Class actions are run on a 'no win, no fee'* fee basis and signing up will not expose you to any out of pocket costs, even if the legal proceedings are not successful. The law firm or litigation funder will bear the costs and the risks in running the case – not the participating group members.

Maurice Blackburn's class action record is second to none. $100m+
We are the only Australian class actions firm to deliver $100M+ settlements to clients in shareholder and listed securities actions, and have done so on seven occasions.

We've recovered in excess of $3 billion for wronged clients since the inception of our class actions practice in 1998.

Listed securities class actions


Australian leaders.

Our reputation for excellence in class actions is unparalleled, increasing our chances of:

- Better returns

- Faster recovery

- Lower cost to clients

Class action types

Misleading shareholders
When companies engage in misleading or deceptive conduct, their actions can imperil shareholders' financial futures. Maurice Blackburn has run class actions relating to disclosure issues and misleading and deceptive conduct by companies in takeovers, in prospectuses and in ASX releases. We are the only Australian law firm to have resolved shareholder and listed securities class actions for in excess of $100 million, and have done so seven times now.

Unfair selling practices
Consumers are protected by law against unfair and deceptive sales practices. Maurice Blackburn has pursued class actions on behalf of Australian consumers, in cases where retailers have engaged in unfair or deceptive practices. Examples include the unfair bank fees case and the Cash Converters payday lending case.

Price fixing and market rigging
Price fixing and market rigging can impact on the livelihoods of both small Australian businesses and national companies. Maurice Blackburn has pursued class actions on behalf of Australian businesses and customers, including against Amcor Visy and Air Cargo class actions.

Negligence
When an avoidable disaster impacts on large numbers of people, a negligence class action provides an avenue for victims to seek restitution. Maurice Blackburn has pursued class actions on behalf of victims of the 2009 Black Saturday bushfires in Victoria, the 2009 oil spill in the Timor Sea, and the 2011 Queensland floods.

Selling defective products
Defective medical products can cause serious injury, ongoing health problems and diminished quality of life. Maurice Blackburn class actions have pursued restitution from companies and corporations whose defective breast, knee and hip implant products have caused significant suffering for Australian patients.

Mistreatment of vulnerable people
We have a responsibility to give a voice to vulnerable people who suffer at the hands of those who are more powerful. Maurice Blackburn has pursued class actions on behalf of disabled residents mistreated in care, victims of abuse in detention facilities, and falsely imprisoned youths.

Andrew Watson National Head of Class Actions, Class actions

"I'm an experienced litigator in class actions, particularly for shareholders who have been victims of corporate misconduct."

Rebecca Gilsenan Executive Director, Principal Lawyer, Class actions

"I have extensive experience in running complex and novel litigation, including class actions in the areas of price fixing, failed investment schemes, product liability and securities."

Ben Slade State Managing Principal, Office Leader, Class actions

"I am driven to give a voice to those who would otherwise have to suffer because those who have done them wrong are all too powerful."

Vavaa Mawuli Principal, Class actions

"The most rewarding thing about my work is the change in scale of what we are able to accomplish."

It doesn’t cost you anything to know where you stand:

1800 309 443

We take calls 24/7