Claims of bias and legal blocking have overshadowed the compensation outcomes of Commonwealth Bank of Australia’s (CBA) Storm Financial resolution scheme.
Levitt Robinson Solicitors principal solicitor and advocate Stewart Levitt claimed that despite his clients being members of the resolution scheme, he was locked out of the scheme’s proceedings.
“Although I continue to represent approximately 70 of the participants of the resolution scheme, which is about 8 to 10 per cent, we were locked out of making submissions,” Levitt said.
“I wrote to [retired High Court Justice Ian] Callinan and asked to be permitted to make submissions. We were refused. I don’t know if we were refused the right to be represented in relation to the matters that were to be put to Callinan, but we were refused information about it because we’re not Slater & Gordon.”
As a result of his lockout claims, questions needed to be asked about whether the resolution scheme represented a form of restricted trade practices and exclusive dealing, he said.
He said he had received “some extraordinary correspondence” from Slater & Gordon regarding the resolution scheme.
“They have written to me saying I shouldn’t be advising basically SICAG [Storm Investors Consumer Action Group] members of the action or writing to them because they happen to be Slater & Gordon clients,” he said.
“But then they contact my clients and write to them because they are members of SICAG. So they are in exactly the same position.”
Slater & Gordon group practice leader in Brisbane Damian Scattini denied Levitt or his clients were locked out of the resolution scheme proceedings.
“The fact is, Slater & Gordon is representing more than 95 per cent of the victims of Storm and so it made the most sense that we who have done the most work for the most people were heard first,” Scattini said.
“I don’t think he’s been locked out of anything except reality.”
However, despite Slater & Gordon’s or Levitt’s claims, former Storm clients remain in two minds regarding the outcome of the scheme.
“Some are angry, some are resigned. Obviously they don’t think the offer goes far enough. But basically people have to look at their own situation and wait until the offer arrives,” SICAG joint chairman Noel O’Brien said.
O’Brien said CBA had given all Storm clients 28 days to decide whether they would accept or reject the resolution offer.
Parliamentary Joint Committee (PJC) on Corporations and Financial Services chair Bernie Ripoll said it was now up to the individual Storm clients to look at their options.
“I’ll be taking a close look on what comes out of the Commonwealth Bank resolution scheme, but in the end it is up to individuals to ascertain whether that resolution scheme and the offer that is provided to them is satisfactory,” Ripoll said.
“It’s very much individual, it’s very much like getting financial planning advice, it really needs to be uniquely for that individual person.”
He said despite the uncertainty regarding the scheme’s outcomes, the PJC would not launch an inquiry into the merits of it.
“Our interest remains that we want to see an orderly resolution and we see it as a really good outcome from the inquiry that we did,” he said.
“But certainly I’m not intending to have another inquiry into whether the resolution scheme is satisfactory – it’s just not practical.”
CBA delivered its long-awaited resolution scheme last week to 2000 former Storm clients.
The compensation outcomes, to be delivered on a case-by-case basis, would take the form of cash compensation and/or concessions including reduced loan balances and interest rates, interest refunds and in some cases permanent tenancy arrangements, Slater & Gordon said.
