Planners face multiple lawsuits
Financial planners who invested client funds in Westpoint schemes could be facing separate individual lawsuits over their recommendations.
Hugh McLernon, executive director of legal funding provider IMF Australia, emphasised that this will not be a single class action as each potential case against the planners will be on an individual basis.
He confirmed to Money Management revelations made earlier in the week by law firm Slater and Gordon that they will launch cases against between 75 to 100 planners .
“We are still investigating each case, which is why we haven’t issued any legal proceedings yet,” he said.
“We also need to look at the amount of administration needed with such a large number of individual cases and whether there will be enough investors wanting to pursue the action.”
Up to 2,000 individuals are looking to sue through the Slater and Gordon run, IMF funded actions.
Any action against the planners will see IMF pay all legal fees of former Westpoint clients upfront.
IMF has recently notified investors that it will recover the legal costs from them if their case is successful, plus between 25 to 40 per cent of the client’s recovered funds awarded by the courts.
McLernon said the success fee amount depended on how long the potential cases took.
“The courts see our fees as reasonable and we have never had an adverse judgement against us regarding fees,” McLernon said.
If the cases are lost, then investors would not have to pay any legal fees, he confirmed.
It is expected that proceedings will be launched in the next couple of weeks.
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