Litigation funder disputes AMP BOLR settlement

The litigation funder of the AMP Buyer of Last Resort (BOLR) class action is negotiating its cut of the settlement money and could take home as much as $43 million.

A notice of proposed settlement from the Federal Court shows the funder, Augusta Pool 523, has already incurred $16,716,882.72 in project costs (including $11,343,317.94 in legal fees and disbursements) in the class action.

The Federal Court said it is "not possible, at this stage, to state the total of the Funder's Entitlements" as it depends on several matters that include an assessment of the reasonableness of Equity Financial Planners' (the lead applicant in the BOLR class action against AMP Financial Planning) legal costs and disbursements, as well as the funder's expenses.

If it is satisfied that they are all fair and reasonable in all circumstances, the court said the total of the funder's entitlements would be approximately $42,968,902.36.

Last November, AMP agreed to pay the $100 million to settle the BOLR class action.

In 2018, AMP's estimated BOLR liability stood at $1.2 billion covering about 800 practices. On 8 August 2019, when the BOLR changes were introduced, AMPFP had 542 practices in its network.

Fewer practices - about 135 - took part in the class action.

Equity Financial Planners has now put forth a funding equalisation order to the court that "seeks to spread the cost of the funder's entitlements equally across all group members of the lawsuit.

"It does so by reducing each Group Member's entitlement to share in the Settlement Sum by a proportionate share of the Funder's Entitlements, regardless of whether they have entered into a litigation funding agreement with the Funder or not," the documents read.

"The effect of this order would not increase the amount paid to the Funder. Instead, it would distribute the contribution to the Funder in equal proportion among all eligible Group Members, so that all Group Members proportionately share in the payment of the Funder's Entitlement."

Corrs Chambers Westgarth led the class action on behalf of applicants.

The settlement approval hearing is set to commence on August 29.

In a statement to Financial Standard, an AMP spokesperson said: "AMP Financial Planning is ready to pay the class action's agreed settlement sum to Corrs in accordance with the legal process following Court approval."