Court details mental turmoil of AMP BOLR objectors

Former AMP advisers have shared their stories of mental distress with the Federal Court as Justice Shaun McElwaine said the objections to the $100 million settlement “weighed heavily” on his mind.

On 6 September, Justice McElwaine approved the $100 million settlement sum put forward by AMP for class action members in the buyer of last resort (BOLR) case. The case, which was first filed in July 2020, is now closed.

While the sum was ruled as being “fair and reasonable”, Justice McElwaine said the objections made by 92 participants – representing 20 per cent of group members – in a two-day hearing prior to the judgment “weighed heavily on my mind” when it came to a verdict. 

The number of objections to the proposal was described as being “higher than in many settlement approval applications”.

Most-common objections by participants

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Source: AMP v Equity Financial Planners, September 2024

While the majority (81 objections) related to the insufficient amount of the sum, around half related to mental distress they had experienced. This came in the form of suicidal ideation, being unable to work, and anxiety about losing their home or their livelihood.

In one instance, an adviser said: “A couple of days after the initial announcement, I had gone out and I actually turned my phone off for a couple of hours. I turned my phone off – on, and I had a message from a close friend, an adviser. The message was a goodbye. They were actually in the process of committing suicide, as they couldn’t see how they were going to survive financially. Very fortunately, they weren’t successful. Subsequently, I no longer turn off my phone, because just in case.

“Since then, I have known a number of advisers who have attempted suicide, and are aware of others who are waiting on the outcome of this class action. And if this proposal proceeds, they will be financially ruined.”

Justice McElwaine noted that this instance was "not an isolated account" among the objectors.

Another stated: "I went through seven years of hell trying to get away from the nightmare [AMPFP] had made my life. I was so close to suicide [...] I worried every minute of every day about losing my house."

Cost objections

Another major objection to the settlement was regarding how the sum was inadequate and it is difficult for class action members to determine how much they would receive, especially once costs had been accounted for. This was particularly the case for the 326 participants who sit in Group 2, who have not been paid a benefit under a BOLR policy already.

Funder commission is $26 million, apportioned on a pro rata basis between group members, while legal costs, disbursements, and expenses will reduce the $100 million down further. Interestingly, only 17 objectors had issue with the funder commission amount and none of the individuals who spoke at the hearing mentioned the funder commission or additional costs. 

Instead, their grievances regarding the money lay in the fact they felt the settlement was a fraction of the true cost, it was morally wrong and not in the interest of the members.

One said: “For me to accept any offer I need to know the facts. Facts such as: what will I be getting, what is expected of me after I receive the benefit, is the benefit worthwhile given the circumstances, is the offer fair for all my impacted colleagues who continue within the profession and is there room for negotiation.”

Another said: “Personally, my BOLR shortfall is approximately $1.6 million (excluding GST) [and] I do not believe the prospect of settling for less than $100,000 is a fair or reasonable result.”

“In the absence of critical information such as the total BOLR payments outstanding to all class-action participants, I am unable to verify the amount of settlement that I am likely to receive. However, I am very aware the proposed settlement amount of $100 million falls significantly short of this total – possibly by a factor of at least four or five times,” a third participant said.

The lack of information was sufficient enough for some objectors to say they would rather risk receiving nothing in favour of pursuing further legal action. Others feared if the settlement was approved that they would lose their opportunity to make individual claims of unconscionable conduct or misleading and deceptive conduct against AMP.

Judge's ruling

Justice McElwaine said he understood the concerns of the objectors and accepted them as valid and truthful. Nevertheless, he said, the settlement is fair and reasonable to be approved.

“Each person who addressed the Court spoke passionately and with conviction. Many were quite distressed in explaining their deeply personal reasons for opposing the settlement. Each courageously explained how their personal and professional lives have been shattered by the decision to alter the BOLR policy. Many remain in significant debt. Most have experienced deep personal trauma and anxiety. Some have suffered with suicidal ideation,” Justice McElwaine said. 

“These are broken individuals who cannot accept that payment of $100 million is adequate to compensate for their individual and collective suffering. Nor is it an amount that is adequate to hold AMPFP to account for its actions.

“The principal reason why I have not acceded to their individual and collective position, is that I have objectively assessed all the material which I am satisfied provides a proper basis to exercise the statutory discretion to approve.”

Andrew Ross and Ben Mahler of KordaMentha have been appointed as administrators of the Settlement Distribution Scheme and any qualifying group member has the right of appeal and may seek a review of the calculations made by the scheme administrator.

If you have been affected by the issues in this story, please contact Beyond Blue on 1300 22 4636 or Lifeline on 13 11 14.