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Class Action Case Study

11th January 2023


The Pitcher Partners class action was commenced on behalf of the shareholders of law firm Slater & Gordon Ltd (hereafter, SGH, whose auditors were formerly Pitcher and Partners) after concerns were raised about the alleged misstatement of information in the firm’s financial report. This class action was related to another brought against Arnold Bloch Leibler (ABL, formerly the legal adviser to SGH) by the same group members.

Class actions in Victoria have a unique component, Group Cost Orders (GCOs), which is a tool to calculate legal costs that may be recovered by the solicitors of the applicant as a percentage of the amount of settlement that may be recovered.

Where GCOs are unavailable, the Court allows for alternative funding models to be considered. One such model, is the Common Fund Order (CFO). Unlike the GCO, a CFO is the fee that a litigation funder would be entitled to recover as a percentage of the amount settle. A Court is empowered by Section 33 of the Federal Court of Australia Act, 1976 (Cth) to make an order for a CFO provided the matter is settled between the parties.

The Pitcher Partners class action involved a litigation funder who sought a commission of 28% of the gross settlement sum. The applicants, however, contended that the funder be entitled to a CFO no greater than 25.6% as it had already obtained significant commissions in the two related class actions ($8 million out of a settlement sum of $36.5 million against SGH, and $7.48 million out of a settlement sum of $28 million against ABL respectively). Justice Beach of the Federal Court of Australia decided in favour of the litigation funder and observed that the CFO percentage sought was fair and appropriate, especially in the context of the continued risk that the funder undertook.

Gerard Malouf and Partners has commenced class action proceedings against Hino Motors and Mercedes-Benz before the Supreme Court of Victoria. GMP Law does not have a funder intends to apply to the Court for Group Cost Orders for each of these class actions.

This document is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. We attempt to ensure that it is current but we do not guarantee its currency. You should seek legal or other professional advice before acting or relying on any of the content.

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