Reputations and legal precedents at stake in ASIC action
The Australian Securities and Investments Commission’s (ASIC’s) desire to obtain documentation from law firm Clayton Utz relating to its advice around AMP Limited’s fee for no service issues dates back to the Royal Commission’s first round of hearings in April and the resignations of AMP’s chair, Catherine Brenner and chief executive, Craig Meller.
It was the nature of the AMP Board’s handling of an “independent” report by Clayton Utz into the fee for no service issue, as outlined to the Royal Commission, which later led to the resignations of first Meller and then Brenner but ASIC is looking at the issue in the context of possible breaches of the Corporations Act.
ASIC’s statement confirming its pursuit of a ruling in the Federal Court is consistent with its recent broader statements concerning its preparedness to make greater use of litigation in pursuing issues and will test the question of what will and will not be covered by legal professional privilege.
Brenner resigned after being accused of interfering with the report, and while the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has handled the issue up to a point, the ASIC investigation is looking to go further in terms of whether other breaches may have occurred.
Clayton Utz has steadfastly maintained that it adhered to its brief in dealing with the AMP board and has sought to defend its refusal to product underlying documentation to ASIC on the basis of legal professional privilege.
The regulator confirmed yesterday that it had made an application to the Federal Court and was conducting an ongoing investigation into AMP over the fee for no service conduct and related false and misleading statements to ASIC.
“This relates to circumstances where customers were charged ongoing service fees without having been provided the services to which they were entitled,” the ASIC statement said.
The regulator said that in October, it had issued a notice under section 33 of the ASIC Act to Clayton Utz requiring the production of certain documents, and that the law firm had declined to produce the documents on the basis that they were the subject of legal professional privilege.
ASIC said it was seeking from the Federal Court a declaration that the documents were not subject to legal professional privilege or alternatively that legal professional privilege had been waived by AMP and an order requiring Clayton Utz to produce the documents to ASIC and ancillary orders.
ASIC’s application has been listed for a first case management hearing in the Federal Court in Melbourne on 8 February 2019.
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