In for slice of AMP pie

AMP has fronted up in court to defend the first of its shareholder class actions as competition grows between legal firms wanting a piece of the potential $2 billion in damages.

Law firm Quinn Emanuel Urquhart & Sullivan began its case against AMP at a hearing in the Supreme Court of NSW yesterday before Justice David Hammerschlag.

A $5 million bond to cover AMP’s legal fees was lodged by the law firm’s litigation funder, Burford Capital.

Quinn Emanuel partner Damian Scattini said the firm was the first to file a class action against the wealth-management group.

The action has the potential to be Australia’s biggest shareholder claim. AMP has 750,000 shareholders.

The law firms involved allege AMP breached its continuous disclosure requirements and made misleading statements.

Those allegations are based on evidence given at the financial services royal commission that caused the group’s share price to plunge.

Law firm Phi Finney McDonald has also filed a shareholder class action against AMP in the Federal Court, while Maurice Blackburn, Slater & Gordon and Shine Lawyers have indicated they expect to lodge similar claims in supreme courts next week.

In a statement yesterday, Slater & Gordon upped the competition between those running class actions by offering a heavily discounted 10 per cent commission to be paid to its litigation funder from any damages awarded to shareholders. Typically, commissions paid to corporate law finance companies are more than 20 per cent.

However, Slater said it had negotiated a discounted deal for shareholders who registered for its claim.

“Slater and Gordon will undertake its work on any action on a no-win, no-fee basis, enabling litigation funder Therium to slash its funding commission to just 10 per cent,” Slater head of class actions Ben Hardwick said.

“Unlike other litigation funders, Therium calculated its commission on the net settlement after legal costs, where other funders calculated their commission on the gross settlement amount.”

Shine, which has partnered with British-based Augusta Ventures to fund its legal action against AMP, yesterday said it expected to lodge its class action claim next week.

In a statement yesterday, AMP said it expected to file its defence within two months.

“AMP has today commenced the process of defending the first of several shareholder class actions,” it said.