FEDERAL COURT OF AUSTRALIA

Janssen v OnePath Custodians Pty Ltd (No 2) [2026] FCA 291

ORDERS

THE COURT ORDERS THAT:

Settlement approval

1.    Pursuant to s 33V of the Federal Court of Australia Act 1976 (Cth) (the Act):  

(a)    settlement of the proceeding on the terms set out in the Deed of Settlement dated 2 October 2024 entered into between the Applicants, the Respondents and Slater and Gordon Limited (ACN 097 297 400) (Settlement Deed); and 

(b)    the scheme for distribution of the settlement sum pursuant to the Settlement Distribution Scheme in the form exhibited to the Affidavit of Kirsten Marie Morrison dated 13 November 2025, 

be approved. 

2.    Pursuant to s 33ZF of the Act, the Applicants are authorised nunc pro tunc for and on behalf of Group Members to enter into and give effect to the Settlement Deed and the transactions contemplated therein for and on behalf of Group Members.   

3.    Pursuant to s 33ZB of the Act, the persons affected and bound by these orders are the parties to the Settlement Deed and all Group Members who did not file an opt out notice in accordance with the orders made 28 March 2024 or the orders made 9 May 2025.

Appointment of Administrator of the Settlement

4.    Pursuant to s 33V of the Act, Slater and Gordon Lawyers be appointed as Settlement Administrator of the Settlement Distribution Scheme (Settlement Administrator) and subject to any direction of the Court is to act in accordance with the provisions of the Settlement Distribution Scheme. 

Applicants’ Costs and Expenses

5.    In addition to the First Respondent’s contributions to the settlement sum pursuant to the Settlement Deed, the First Respondent is to pay the additional amount of $195,000 (incl GST) toward the settlement sum to be applied by the Settlement Administrator to the approved Settlement Administrator’s Expenses under Order 6(c) below, specifically to the Deloitte Costs incurred for the Omitted Group Members registration.

6.    Pursuant to s 33V and/or s 33ZF of the Act, for the purposes of the Settlement Distribution Scheme: 

(a)    the Applicants’ Legal Costs being professional fees, legal fees, counsel’s fees and disbursements, After the Event insurance incurred in connection with the proceeding on their own behalf and on behalf of all Group Members in the proceeding, plus uplift, plus the Contradictor Costs (in the amount of $46,080.10) be approved in the amount of $14,271,441.94 (incl GST); 

(b)    the Applicants’ Payment, being the Applicants’ reasonable claim for compensation for the time and expenses incurred in acting as the Applicants on behalf of Group Members be approved in the amount of $40,000 ($20,000 to each Applicant) (incl GST); and

(c)    the Settlement Administrator’s Fees and Expenses being the fees and expenses incurred in connection with the administration of the Settlement Distribution Scheme, including undertaking registration for settlement and all the fees and expenses of Deloitte in assisting with registration (being $2,340,985 incl GST) (Deloitte Costs), be approved in the amount of $3,082,880 (incl GST).

Confidentiality 

7.    Until further order, pursuant to ss 37AF and 37AG(1)(a) of the Act, and to prevent prejudice to the proper administration of justice, the material listed in Annexure A to these orders is confidential (including for the purposes of rr 2.32(1)(b) and 2.32(3)(a) of the Federal Court Rules 2011 (Cth) (the Rules)) and is not to be published or made available to any person other than the Court, the Applicants and their legal representatives and the Contradictor.

8.    Until further order, pursuant to ss 37AF and 37AG(1)(a) of the Act, and to prevent prejudice to the proper administration of justice, the material listed in Annexure B to these orders is confidential (including for the purposes of rr 2.32(1)(b) and 2.32(3)(a) of the Rules) and is not to be published or made available to any person other than the Court, the Applicants and their legal representatives, the Contradictor and the Respondents and their legal representatives.

9.    Pursuant to ss 37AF and 37AG(1)(a) of the Act, and to prevent prejudice to the proper administration of justice, the material listed in Annexure C to these orders is confidential (including for the purposes of rr 2.32(1)(b) and 2.32(3)(a) of the Rules) and is not to be published or made available to any person other than the Court, the Applicants and their legal representatives and the Contradictor until:

(a)    the expiry of the appeal period from the making of these orders (Settlement Approval Orders), if no appeal of the Settlement Approval Orders is commenced; or

(b)    if an appeal or application for leave to appeal has been filed in respect of Settlement Approval Orders, then until the final determination of that appeal or application for leave to appeal, or until further order.

Late Registrations

10.    Pursuant to ss 33V and/or 33ZF of the Act, the Group Members listed in Confidential Annexure D to these orders who did not register by the Court ordered registration deadlines but who subsequently lodged a Notice of Objection seeking to register are deemed to have registered for the purposes of the Settlement Administration and will have their claims determined under the Settlement Distribution Scheme.

Final orders

11.    Within 20 days from the date of the completion of the administration of the Settlement Distribution Scheme, being the date on which the final distribution under the Scheme is confirmed by the Settlement Administrator, the Settlement Administrator shall apply to the Court for final orders dismissing the proceeding with no orders as to costs and that all costs orders previously made in the proceeding be vacated. 

Liberty to apply

12.    Any party affected by these orders, including the Settlement Administrator, has liberty to apply. 

[Annexures omitted in this record of the orders made.]

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BUTTON J:

INTRODUCTION

1    This proceeding was commenced by an originating application dated 23 December 2020 (stamped on 8 January 2021) by Ian Edo Janssen and Dean Tobin Reeves (the Applicants) both on their own behalf and as a representative proceeding under Pt IVA of the Federal Court of Australia Act 1976 (Cth) (the Act), against OnePath Custodians Pty Ltd (OPC, the First Respondent), OnePath Life Pty Ltd (OPL, the Second Respondent) and Australia and New Zealand Banking Group Limited (ANZ, the Third Respondent). At the time of the impugned conduct, OPL and OPC were both wholly owned subsidiaries of ANZ. Following corporate restructures, Zurich Australia Limited (Zurich) replaced OPL as the Second Respondent. The proceeding was conducted by Slater and Gordon, solicitors for the Applicants.

2    At a high level, the claims concern the conduct of OPC as the trustee of two retail superannuation funds (Trustee): OnePath Master Fund (Master Fund) and the Retirement Portfolio Service Fund (RPS Fund). Broadly, the proceeding advances two groups of claims:

(a)    Cash Claims: these claims concern OPC’s investment of members’ funds with its wholly owned parent, ANZ; and

(b)    Commissions Claims: these claims concern the deduction of fees from members’ accounts related to the payment of commissions to financial advisers.

3    The Group Members are divided according to the two different types of claims: Cash Claims and Commissions Claims. Broadly, the Cash Group Members are members of the Master Fund from 1 September 2011 to 13 April 2019, and members of the RPS Fund from 14 April 2019 to 31 January 2020, who invested in one of three cash investment options. Persons who received payments from either the Master Fund or the RPS Fund of the benefits of a deceased member, and persons who were a spouse of a deceased member, who had rights and units in respect of the cash products are also Cash Group Members, as are members who had units or rights in respect of an ANZ term deposit option (Cash (Term Deposit) Group Members). The Cash (Term Deposit) Groups Members’ claims are referred to as the Cash (Term Deposit) Claims. The Commissions Group Members are persons who became members of the Master Fund prior to 30 June 2013, who were invested in certain commissions products after 1 July 2013 and were charged certain fees. Persons who received payments from either fund of the benefits of a deceased member, and persons who were a spouse of a deceased member who had rights or units in respect of the commissions products are also Commissions Group Members.

4    As against OPC, the Applicants claim that, as Trustee, OPC breached the following duties both under the general law and the Superannuation Industry (Supervision) Act 1993 (Cth), among others:

(a)    to act in members’ best interests;

(b)    to act with due care and skill; and

(c)    to avoid conflicts between its duties to and the interests of members, and its personal interests or the interests of third parties.

5    As against Zurich, claims are made against it as an alleged accessory to both the Cash Claims and the Commissions Claims and as against ANZ, claims are made as an alleged accessory to the Cash Claims.

6    The Respondents contest all claims.

7    In June 2023, the Court listed the trial of the proceeding to commence on 30 September 2024 on an estimate of four to six weeks.

8    On 16 September 2024, the parties reached an in-principle agreement to settle the proceeding. Orders made on 2 October 2024 vacated the trial and all extant pre-trial orders. A deed of settlement was signed by the parties and by Slater and Gordon on or around 2 October 2024 (Settlement Deed).

9    On 18 October 2024, the Applicants brought an interlocutory application for both preliminary orders, and approval orders pursuant to s 33V of the Act. Originally, the settlement approval application (Settlement Approval Application) was set down for hearing on 23 April 2025. However, as I will come to, the hearing date was twice delayed. On 28 October 2024, I made preliminary consent orders (Preliminary Orders), which appointed Slater and Gordon preliminary settlement administrator, provided for the provision of a costs report, and made provision for the distribution of a notice to Group Members. At a case management hearing on 23 April 2025, I determined to appoint a contradictor despite the objection of the Applicants (the Contradictor). The Contradictor’s role is to represent the interests of Group Members. The role of Contradictor does not require the Contradictor to take every arguable point that might be thought to be in the Group Members’ interests. Rather, the Contradictor is to exercise the normal and proper forensic judgements of counsel in determining what submissions ought be made in the interests of Group Members, and to assist the Court to perform its judicial function in relation to the Settlement Approval Application.

10    Slater and Gordon, in its own interest, was granted leave to appear and made submissions at the hearing of the Settlement Approval Application.

11    As noted above, the Settlement Approval Application was originally listed for hearing on 23 April 2025, but has twice been delayed. In the first instance, the application was delayed until 2 December 2025. That delay was occasioned when, in early April 2025, OPC informed the Applicants that there was a cohort of approximately 22,000 Group Members whose details had not been provided to the Applicants for either the Opt Out Notice (Opt Out Notice) or the Notice of Proposed Settlement (NoPS) due to a data extraction issue. The number of potential members in this cohort was subsequently reduced to 7,113 following a de-duplication and matching process (the Omitted Group Members). Accordingly, I made orders on 9 May 2025 approving the issue of a combined notice (Combined Notice), enclosing a further Opt Out Notice and a Further Notice of Proposed Settlement to be provided to Omitted Group Members from 26 May 2025 (Omitted Group Members Orders). Omitted Group Members had to register before 8 July 2025 to participate in the settlement, unless granted leave. This issue is discussed further below at paragraph 206ff and is referred to as the OGM error.

12    The hearing of the Settlement Approval Application was further delayed, until 12 February 2026. The Contradictor’s written submissions dated 27 October 2025 raised concerns (discussed further below at paragraph 61ff), regarding the fairness of the proposed distributions as between certain groups of Registered Group Members, as part of the proposed Settlement Distribution Scheme (SDS). The Applicants sought to amend the SDS so as to include discounts to categories of claims that were not originally proposed to be discounted under the proposed SDS as it stood when notice of the proposed settlement was issued to Group Members. I refer to the SDS, as amended by the Applicants, as the Amended SDS.

13    Following a mention held on 20 November 2025, orders were made to ensure that Registered Group Members were given notice of the changes to the proposed SDS, and an opportunity to object to the changes proposed (Further NoPS). This further notification and objection process had to be completed before the Settlement Approval Application could be heard.

14    In support of the Settlement Approval Application, the Applicants filed the following material:

(1)    Affidavit of Kirsten Marie Morrison affirmed 22 October 2024 (First Morrison Affidavit) in support of the preliminary orders proposed to ready the Settlement Approval Application for hearing.

(2)    Affidavit of Kirsten Marie Morrison affirmed 25 October 2024 (Second Morrison Affidavit), which annexed the originally proposed SDS.

(3)    Affidavit of Kirsten Marie Morrison affirmed 3 March 2025 (Third Morrison Affidavit), which updated the Court on the steps taken to comply with the Preliminary Orders made on 28 October 2024, which included orders providing for the notification of Group Members regarding the proposed settlement. This affidavit exhibited the report of the Independent Costs Referee, Ms Kerrie-Ann Rosati dated 21 February 2025 (Costs Report). The affidavit also addressed the Notices of Objections received by Group Members by the objection deadline on 14 February 2025 (objections), discussed further below at paragraph 40ff.

(4)    Affidavit of Kirsten Marie Morrison affirmed 22 April 2025 (Fourth Morrison Affidavit), which related to the process for distributing the Combined Notice to Omitted Group Members.

(5)    Affidavit of Kirsten Marie Morrison affirmed 22 September 2025 (Fifth Morrison Affidavit), which provided the Court with:

(a)    the procedural history of the matter;

(b)    a summary of the proposed settlement;

(c)    an overview of the distribution of the NoPS to Group Members (including to Omitted Group Members);

(d)    the objections;

(e)    a summary of the SDS, including a summary of some minor proposed amendments to the first proposed SDS included in the Second Morrison Affidavit; and

(f)    an overview of the amount of, and basis for, the cost deductions for which approval is sought.

The Fifth Morrison Affidavit also exhibited a supplementary costs report of Ms Rosati dated 3 September 2025 (Supplementary Costs Report) and a confidential opinion of counsel on the reasonableness of the proposed settlement (Confidential Counsel Opinion).

(6)    Written submissions dated 22 September 2025.

(7)    Affidavit of Kirsten Marie Morrison affirmed 13 November 2025 (Sixth Morrison Affidavit), which annexed the Amended SDS and a Supplementary Confidential Counsel Opinion as to the reasonableness of the specific amendments within the Amended SDS, together with written submissions, in response to the written submissions filed by OPC and the Contradictor (listed at paragraph 16 below).

(8)    Affidavit of Kirsten Marie Morrison affirmed 3 February 2026 (Seventh Morrison Affidavit), which addressed 12 further Notices of Objections (further objections) filed by Group Members in response to the Further NoPS to Registered Group Members.

(9)    Further written submissions in relation to the further objections dated 3 February 2026.

15    The deponent of the Applicants’ affidavits, Ms Morrison, is a solicitor.

16    The following material was also filed in relation to the Settlement Approval Application:

(1)    OPC filed an affidavit of Robertus Johannes van der Sanden (technology manager at Insignia Financial Ltd) affirmed 19 May 2025 to provide explanations and confirmation of various matters in relation to the Omitted Group Members, an affidavit of Benjamin George Thomas Keily (solicitor) affirmed 13 October 2025 in relation to the Omitted Group Members and the alleged costs attributable to the registration process necessitated by the OGM error, and written submissions dated 13 October 2025.

(2)    Slater and Gordon filed an affidavit of Kirsten Marie Morrison affirmed 23 September 2025 in relation to the proposed deductions for Slater and Gordon’s costs from the settlement sum, and written submissions dated 22 September 2025.

(3)    The Contradictor filed written submissions on 27 October 2025 and further written submissions, in relation to the further objections, on 3 February 2026.

THE PROPOSED SETTLEMENT

Key features of the proposed settlement

Settlement Sum and Proposed Deductions

17    Pursuant to the Settlement Deed, the Respondents will pay an “all in” settlement sum of $50 million.

18    In exchange for the settlement sum, the Settlement Deed releases the Respondents from:

(a)    each and every claim made by the Applicants or any Group Member in this proceeding;

(b)    any claim made by the Applicants or any Group Member which is in respect of, or arises out of, the same or related circumstances to those raised in this proceeding; and

(c)    any and all claims that the Applicants or any Group Member has or may have that were raised, or could have been raised, in this proceeding that arise directly or indirectly in respect of, or arise out of, the same or related subject matter to this proceeding or arise from the same or related circumstances to the proceeding, or relate to any damage, loss, cost or expense suffered as a result of the matters the subject of the proceeding,

(together, the releases).

19    The first proposed deduction is for the legal fees and related costs (together, legal costs). As settlement approval was ultimately pursued on the basis of Slater and Gordon acting on a “no win, no fee” basis, a deduction for legal fees is sought with an uplift fee of up to 25% on the professional fees. To this end, the Applicants seek approval for a deduction for incurred and anticipated legal fees and disbursements of $15,151,441.94 consistently with the Costs Report and Supplementary Costs Report (together, the Costs Reports), including the cost of the Costs Reports.

20    The legal costs include both the initial premium paid in respect of the After the Event (ATE) insurance obtained by Slater and Gordon, which was $440,000 inclusive of stamp duty. That sum has already been paid to the insurance broker. The proposed deduction for legal costs also includes a contingent deferred premium of $1,320,000 (inclusive of stamp duty) which has not yet been paid. The ATE insurance indemnifies Slater and Gordon to a limit of $4 million against the aggregate of the Respondents’ adverse costs. In total, the deduction sought for the ATE insurance is $1,760,000.

21    The second proposed deduction is for settlement administration costs of $3,082,880. These administration costs are made up mainly of Slater and Gordon ($519,750) and Deloitte’s costs ($2,340,985) of settlement administration. Deloitte was engaged by Slater and Gordon as a third-party data specialist to oversee the registration process pursuant to the Preliminary Orders. Its role included, but was not limited to, distributing notices to Group Members, registering Group Members and responding to Group Member enquiries. The settlement administration costs also include the costs associated with sending out the Further NoPS ($20,625).

22    The third proposed deduction is a reimbursement payment to the Applicants. The Applicants seek the Court’s approval for a payment to each applicant of $20,000. In total, this would be a deduction of $40,000.

23    Overall, the total sum of proposed deductions from the settlement sum is $18,079,321.94. If allowed in full, those deductions would result in Group Members receiving just under 64% of the $50 million settlement sum.

Settlement Distribution Scheme

24    The Applicants seek orders that the Amended SDS be approved.

25    It is proposed that, following the above-mentioned deductions, the Settlement Administrator will calculate the final amount of the settlement sum remaining for distribution to Registered Group Members (Net Settlement Sum). The Net Settlement Sum will be distributed pursuant to the loss calculation and apportionment method set out in Schedule 1 of the Amended SDS.

26    At risk of oversimplifying, the calculation methods to be applied under the Amended SDS are as follows:

(1)    For Cash Group Members (excluding Cash (Term Deposit) Group Members), the actual interest paid on the investment for each Registered Group Member is determined. That is then compared with the counterfactual monthly return the Group Member ought to have been paid monthly on the investment. A compounding interest factor is then applied from the date of the first interest payment until the settlement date.

(2)    For Cash (Term Deposit) Group Members, the term deposit cash loss is calculated at the point when interest was paid on the term deposit for a specific Group Member. The loss is calculated by adding a counterfactual additional margin to the actual annual return paid on the ANZ term deposit option. A compounding interest factor is then applied from the month of the interest payment made on the term deposit until the settlement date.

(3)    For Commissions Group Members, the loss for Commissions Claims is calculated by applying pre-judgment interest to the total sum of the amount of commission recorded from 1 July 2013 to 14 April 2019 (the Master Fund Period). Simple interest is then applied from the end of the Master Fund Period until the settlement date.

(4)    In all three scenarios, following application of the discounts referred to in paragraph 28 below, the individual loss of each Registered Group Member is calculated as a proportion of the total loss for all Registered Group Members (both Cash Group Members and Commissions Group Members), and the Net Settlement Sum is then distributed on a pro rata basis.

27    Notably, each Commissions Claim does not have applied to it a compounding interest rate, like the Cash Claims. Rather a lower, non-compounding interest rate is applied.

28    Additionally, the Settlement Administrator has a discretion to apply two further discounts to the claims:

(d)    first, a 30% discount to any loss arising prior to or on 31 December 2014 (which reflects potential statute of limitations defences related to those claims); and

(e)    a further 50% discount rate to Commissions Claims and Cash (Term Deposit) Claims only (which reflects the relative strengths of these claims as against the other claims).

29    While framed as a discretion to apply the discount rates, Slater and Gordon has confirmed that it intends to apply the full amount of each available discount when calculating the relevant loss of each Registered Group Member.

30    The Amended SDS also includes a de minimis threshold of $10, meaning that $10 would be the minimum distribution paid to a single Group Member (the de minimis threshold). The Fifth Morrison Affidavit explains that this is because distributing payments under $10 would cost more in administrative expenses than the payment amount itself.

31    Following the loss calculation process, it is proposed that Registered Group Members will be sent a notice of estimated distribution. The Amended SDS does not contain a mechanism for Registered Group Members to request a review of their individual estimated distributions.

Communication with Group Members

Opt Out Notice

32    On 28 March 2024, I made orders approving an opt out notice (Opt Out Notice) to be sent to Group Members (Opt Out Orders). The Opt Out Orders set 24 June 2024 as the last date by which Group Members could opt out of the proceeding (Opt Out Deadline). Approximately 375,00 individuals received an Opt Out Notice in May 2024.

33    As at the Opt Out Deadline, 1,066 individuals had submitted completed opt out notices. Thirty-‍one additional individuals completed opt out notices between the Opt Out Deadline and 6 January 2025. These individuals have been treated by Slater and Gordon as not having opted out of the proceeding.

34    The Combined Notice sent to Omitted Group Members on 26 May 2025 included a further Opt Out Notice. Four Group Members lodged notices opting out of the proceeding before the deadline of 8 July 2025.

Notice of Proposed Settlement

35    Following the making of the Preliminary Orders, the NoPS was distributed to 359,844 Group Members. The Omitted Group Members were provided a Notice of Proposed Settlement as part of the Combined Notice. This component of the Combined Notice was relevantly in the same terms as the NoPS issued in November and December 2024.

36    The NoPS set out three options for Group Members:

(a)    to register to be eligible to receive a payment from the proposed settlement, including details regarding how to register and when to register by;

(b)    to object to the proposed settlement, including how to submit a notice of objection; or

(c)    to do nothing, in which case the Group Member would be bound by the settlement but would not be entitled to receive a payment from the proposed settlement.

The Combined Notice included a fourth option, namely, to opt out.

37    The NoPS referred to the following features of the proposed settlement:

(a)    that Slater and Gordon had agreed to run the class action on a “no win, no fee” basis;

(b)    that the proposed settlement sum is $50 million;

(c)    that Slater and Gordon would be seeking approximately $13 million in legal costs from the settlement sum for the costs up to and including the Settlement Approval Application, including an uplift of 25% on Slater and Gordon’s professional legal fees to account for the risk taken by Slater and Gordon in running the proceeding on a “no win, no fee” basis;

(d)    that the Applicants would seek approval for the deduction of approximately $3 million in settlement administration costs;

(e)    that the Applicants would seek a reimbursement payment of approximately $20,000 each;

(f)    that the Applicants would seek reimbursement of $1.7 million for ATE insurance secured by Slater and Gordon to cover the Applicants’ risk of being ordered to pay the Respondents’ legal costs in the event of an unsuccessful outcome;

(g)    that all the above-mentioned deductions, if approved, would total approximately $18 million, leaving $32 million to be distributed to Group Members; and

(h)    that the Applicants would apply for orders that Slater and Gordon be appointed the Settlement Administrator, and that they anticipated third parties would be retained to assist in settlement administration.

38    The NoPS referred Group Members to the first proposed SDS in relation to estimating how much each Group Member would receive, but noted that it was not presently possible to provide an accurate estimate for each Group Member.

39    The total number of Registered Group Members is 76,718, including 1,457 Omitted Group Members.

Objections

40    The NoPS set 14 February 2025 as the deadline for Group Members to submit objections. In total, 303 objections were received: 243 before the deadline and 60 after the deadline. No objections were received following the provision of the Combined Notice to Omitted Group Members.

41    The Fifth Morrison Affidavit sets out that, of the 303 objections, 294 are not substantive objections for the following reasons:

(a)    they did not provide a reason for the objection or the basis for the objection is not apparent on the face of the notice (these objections were not followed up by Slater and Gordon);

(b)    they appear to have been mistakenly submitted or were subsequently withdrawn;

(c)    they were submitted as requests for late registration or on the basis that the Group Member had not successfully registered by the deadline;

(d)    they were submitted by law firms advising that they no longer represent the relevant Group Member’s estate; and

(e)    they were submitted by Group Members to indicate a desire to opt out of the proceeding.

42    The Contradictor agreed with the Applicants’ characterisation of these objections. I accept the Applicants’ and the Contradictor’s characterisation of these objections as not substantive.

43    In relation to those objections seeking late registration to participate in the proposed settlement, the Applicants seek orders permitting those Group Members to participate.

44    The nine other objections include substantive grounds for the objection to the proposed settlement. These objections have been placed by the Applicants and the Contradictor into five categories:

(a)    costs excessive: three of the objections contend, among other things, that the proposed deductions for legal costs are excessive;

(b)    settlement sum insufficient: three of the objections contend, among other things, that the overall value of the settlement sum is insufficient;

(c)    de minimis threshold: one objection contends that the $10 de minimis threshold discriminates unfairly against low balance Group Members;

(d)    insufficient personalised information: one objection contends that Group Members did not receive sufficient personalised information to enable them to make an informed decision as to whether the proposed settlement was in their best interests; and

(e)    registration requirement: one objection (which was lodged after the deadline) contends that all Group Members, irrespective of their registration status, should be eligible to take part in the proposed settlement.

45    The Applicants, Slater and Gordon and the Contradictor all do not consider these substantive objections to be an impediment to the proposed settlement being approved. The Applicants submit that the number and nature of the objections, in the overall context of the number of Group Members and Registered Group Members, weigh in favour of the Court approving the proposed settlement.

46    I deal with the merit of the objections where relevant in the consideration section below.

Objections following the issue of the Further NoPS

47    In November 2025, the Further NoPS was distributed to Registered Group Members. The Further NoPS set 23 January 2026 as the deadline for any Registered Group Members to submit further objections.

48    The Seventh Morrison affidavit outlines that 12 further objections were received before the deadline by Registered Group Members. In total, five of the further objections did not provide a reason for the objection or the basis for the objection is not apparent on the face of the notice.

49    One Group Member objected on the basis that they failed to successfully register for the proposed settlement. However, the data confirmed that this objector was in fact registered.

50    The other five further objections include substantive grounds of objection to the proposed settlement, including concerns as to the fairness of the further discounts, the level of detail provided in relation to the nature of the proposed settlement and the distribution of the proceeds, and the deduction of costs.

51    The Applicants did not make further submissions about the further objections, only referring back to, and repeating, their submissions on the initial substantive objections.

52    In relation to the objection as to the fairness of the further discounts, the Contradictor submits that the proposed further discounts are an appropriate response by the Applicants to the issue raised by the Contradictor, discussed at paragraph 12 above.

53    In relation to objections that took issue with the absence to date of individual notices quantifying each Group Member’s estimated distribution, the Contradictor relies on a number of decisions to say that this does not preclude the Court being satisfied that Group Members have had a fair opportunity to consider the Amended SDS and that the proposed mechanism is fair and reasonable: Inabu Pty Ltd v Leighton Holdings Ltd [2014] FCA 622 at [12] (Jacobson J); Fowkes v Boston Scientific Corp [2023] FCA 230 at [35] (Lee J); Equity Financial Planners Pty Ltd v AMP Financial Planning Pty Ltd [2024] FCA 1036 at [124]–‍[129] (McElwaine J). I accept that submission. Given the nature of the claims advanced, the categories of claims and the number of Registered Group Members, it is simply not possible for the likely return to individual Registered Group Members to be calculated ahead of the final process being undertaken.

54    As with the earlier objections, I otherwise deal with the merits of these further objections, where relevant, in the consideration section below.

PRINCIPLES TO BE APPLIED

55    Section 33V of the Act governs the settlement of a representative proceeding. It provides as follows:

33V Settlement and discontinuance—representative proceeding

(1)    A representative proceeding may not be settled or discontinued without the approval of the Court.

(2)    If the Court gives such an approval, it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into Court.

56    The principles in relation to s 33V are settled and have been summarised in several cases, including Camilleri v Trust Co (Nominees) Ltd [2015] FCA 1468 (Camilleri) at [5] (Moshinsky J); Webb v GetSwift Ltd (No 7) [2023] FCA 90; (2023) 165 ACSR 650 (GetSwift) at [15]–[17] (Murphy J); Kemp v Westpac Banking Corp (No 4) [2023] FCA 830 (Kemp) at [16]–[21] (O’Bryan J); and Ewok Pty Ltd as trustee for the E & E Magee Superannuation Fund v Wellard Limited [2024] FCA 296 (Ewok) at [52]–[53] (Button J).

57    In summary, the Court’s central task under s 33V(1) is to determine whether the proposed settlement is fair and reasonable and in the interests of group members as a whole, including as between group members inter se: GetSwift at [15] (Murphy J); Camilleri at [5(a)] (Moshinsky J). Under s 33V(2), the Court must determine what orders are just with respect to the distribution of settlement proceeds. That assessment is necessarily fact-specific and directed to ensuring an equitable distribution of the funds among those who have benefited from the proceeding: Kemp at [20] (O’Bryan J). There is not usually a single or clear way in which a settlement should be framed; reasonableness is a range and it is not for the Court to second-guess the commercial and forensic judgements of those who are best placed to assess whether a proceeding should be settled and on what terms, provided that the outcome is within the range of reasonable decisions: Horsky v Mesoblast Limited [2024] FCA 1509 (Horsky) at [13]–[14] (Beach J). Similarly, the Court assesses the proposed settlement mindful that, while the arrangement should be framed to achieve a broadly fair and cost-effective division of proceeds, this may involve judgement calls being made: Horsky at [16] (Beach J).

58    In undertaking its task, the Court assumes a protective role in relation to group members’ interests: Horsky at [15] (Beach J).

59    In Camilleri, Moshinsky J identified the following additional considerations:

(a)    the importance of group members receiving timely notice of the critical elements of the settlement so that they have an opportunity to take steps to protect their own position, and the relevance of the absence of objections as a consideration in support of the settlement (at [5(f)]); and

(b)    where a group member objects, whether the objector is prepared to assume the role and risks of being lead plaintiff (at [5(g)]).

60    In Kemp, at [17], O’Bryan J also noted that the Court will ordinarily consider “the terms of any advice received from counsel and from any independent expert in relation to issues which arise in the proceeding”. The Court’s Class Actions Practice Note at [15.1(a)(i)] provides that the counsel opinion provided by counsel for the applicants is ordinarily the subject of a confidentiality order.

VIEWS OF THE CONTRADICTOR

61    As explained above at paragraph 9, I appointed a Contradictor over the Applicants’ objections.

62    The Contradictor accepted that the proposed settlement was within the range of fair and reasonable outcomes as between the Applicants and the Respondents (albeit at the lower end), subject to one qualification. The qualification was that the Applicants and Respondents should confirm to the Court that the releases in the Settlement Deed are not intended to release the Respondents from Group Members’ individual claims that are not, and could not have been, brought on their behalf by the Applicants in this proceeding. In other words, the Contradictor submitted that the Settlement Deed does not make it sufficiently clear that the releases are not intended to apply to Group Members’ “individual or idiosyncratic claims” that the Applicants could not have brought on their behalf in this proceeding.

63    In the Applicants’ reply submissions, the Applicants submitted that the Applicants and each of the Respondents confirmed that the releases in the Settlement Deed are not intended to release the Respondents from Group Members’ individual claims that are not, and could not have been, brought on their behalf by the Applicants in this representative proceeding. The Contradictor accepted that this adequately addresses the concern raised about the scope of the releases, relying on a similar approach having been taken by the Court in several other decisions, for example, Court v Spotless Group Holdings Ltd [2020] FCA 1730 (Spotless) at [20] (Murphy J); Prygodicz v Commonwealth (No 2) [2021] FCA 634; (2021) 173 ALD 277 at [128]–[130] (Murphy J); Luke v Aveo Group Ltd (No 3) [2023] FCA 1665 at [61]–[66] (Murphy J); Compumod Investments Pty Limited as trustee for the Compumod Pty Limited Staff Superannuation Fund v Universal Equivalent Technology Limited (Settlement Approval) [2024] FCA 571 at [10] (Lee J).

64    Further, as between the Applicants and the other Group Members, the Contradictor accepted that the proposed settlement was within the range of fair and reasonable outcomes as between the Applicants and the other Group Members, subject to two qualifications. These qualifications were the trigger for the Applicants revising the SDS to introduce additional discounts (as discussed above at paragraph 12). Firstly, the original SDS only contained the discretionary 50% discount for the Commissions Claims and not the Cash (Term Deposit) Claims. The Contradictor submitted that there was a real possibility that a discount should be applied to Cash (Term Deposit) Group Members in a similar way to the discount applied to Commission Group Members to reflect the relative strength of those claims. As outlined above at paragraph 28, the Amended SDS now includes a discretionary 50% discount for the Cash (Term Deposit) Claims to deal with this concern. Secondly, the Amended SDS did not contain any discount to reflect the potential strength of the limitations defences pleaded by the Respondents to claims that predate 23 December 2014. This risk is now reflected in the Amended SDS by way of the discretionary 30% discount applicable to all claims prior to or on 31 December 2014, also outlined at paragraph 28 above.

65    In the Contradictor’s further written submissions in relation to the Amended SDS, the Contradictor accepted that the further proposed discounts are an appropriate response by the Applicants to the issues that he raised.

THE APPLICATION FOR A SUPPRESSION AND NON-PUBLICATION ORDER

66    The Applicants seek suppression and non-publication orders under s 37AF of the Act in respect of documents and information identified in schedules to their proposed orders. Those orders are sought on the ground that the orders sought are “necessary to prevent prejudice to the proper administration of justice” (s 37AG(1)(a) of the Act).

67    Once the Court has identified whether public disclosure of information should be restrained on the basis that it is “necessary to prevent prejudice to the proper administration of justice”, an order under s 37AH of the Act must be made; the outcome is not discretionary: Country Care Group Pty Ltd v Director of Public Prosecutions (Cth) (No 2) [2020] FCAFC 44; (2020) 275 FCR 377 at [9] (Allsop CJ, Wigney and Abraham JJ). That is not to say, however, that there is only ever one set of interests to be considered in determining whether the proper administration of justice requires the suppression or non-publication of information. Some factors can pull one way, and other factors can pull the other way.

68    The power conferred by s 37AF is to be exercised in circumstances where s 37AE provides that: “In deciding whether to make a suppression order or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.” Disclosure in public of the Court’s reasons, and the evidential basis upon which the Court has exercised power, are incidents of open justice: Cargill Australia Ltd v Viterra Malt Pty Ltd (No 23) [2019] VSC 417; (2019) 58 VR 611 at [63] (quoted with approval by the Full Court in Lee v Deputy Commissioner of Taxation [2023] FCAFC 22 (Lee) at [84] (Thawley, Stewart and Abraham JJ)), [73] (Elliott J); see also the observations of O’Bryan J in Riverine Grazier Pty Ltd v Google LLC [2025] FCA 895 at [18]–‍[19].

69    The tendency observed in this Court, time and again, is for ambit claims for the suppression of large tracts of information and documentation to be withheld from public disclosure under claims of commercial confidentiality. Far too often, commercial confidentiality is treated as synonymous with the administration of justice. They are not one and the same.

70    I make these observations at this juncture, as acceding to over-wide confidentiality claims and making orders under s 37AF of the Act would prevent issues of the kind with which I am concerned from being properly exposed and addressed. Approval is commonly sought for very significant deductions from settlement sums that would otherwise be available for distribution to group members. That is not the issue in itself: litigation is expensive, and most cases of this kind would never be brought absent the investment of large sums by class action firms and funders. Not only are group members’ legal rights affected by the conduct of class action proceedings (s 33ZB of the Act), but their interests are also materially affected by the deductions for which approval is sought. Group members should be able to understand how those deductions have come about and why the Court considers the deductions, or parts of them, are fair and reasonable. This is an aspect of the “proper administration of justice”.

71    In Liverpool City Council v McGraw-Hill Financial Inc [2018] FCA 1289 (Liverpool) at [120], Lee J likewise drew attention to the significance of a proceeding being a class action affecting the interests of group members, and the need for the Court to be able to explain its reasons, in assessing applications for suppression and non-publication orders. Class action proceedings under Part IVA of the Act are not just private disputes. Rather, class actions and the settlement of class actions have important public dimensions, in respect of which transparency plays an important role: Liverpool at [107] (Lee J); Jenkings v Northern Territory of Australia (No 4) [2021] FCA 839 (Jenkings) at [45]–[49] (Mortimer J). I refer to, and adopt, the observations of Mortimer J, as her Honour then was, in Jenkings at [49], where her Honour observed that the representative character of class actions, and the fact that group members do not actively participate, but are bound, “imposes an obligation on the parties, and on the Court, to ensure how and why judicial power is exercised as it is in a settlement approval process is apparent to all”.

72    In this case, I am not satisfied that suppression and non-publication of the information that I refer to in these reasons is “necessary to prevent prejudice to the proper administration of justice”. As is clear from the authorities, “necessary” is a “strong word”: Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 at [30] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ). On the contrary, in my view, the proper administration of justice in fact demands that the information set out below be available to Group Members. To that extent at least, the suppression and non-publication order application must be refused.

73    During the hearing of the Settlement Approval Application, I raised with counsel that the information proposed for an order under s 37AF was too extensive. The Applicants were provided with an opportunity to refine, and confine, their application by submitting a revised proposed schedule identifying the information and documents to be subject to an order under s 37AF. To an extent, the ambit of the application was narrowed. But the Applicants also used this as an opportunity to assert claims of legal professional privilege that had not been asserted before, when the documents and information in question was put before the Court by the Applicants as part of their own Settlement Approval Application.

74    Prior to the submission of the revised schedules on 23 February 2026, all that had been said by the Applicants about legal professional privilege was a general statement in some of Ms Morrison’s affidavits that, in order for information relating to the application to be provided to the Court, it was necessary for her to disclose information that is “presently confidential to the Applicants and their legal representatives and/or is subject to legal professional privilege”. The Sixth Morrison Affidavit also included a general reference to information being subject to “legal professional privilege or without prejudice privilege”. Additionally, all of Ms Morrison’s affidavits also included boilerplate statements that: she was not “authorised or instructed to waive legal professional privilege and nothing in [the] affidavit is to be construed as a waiver of privilege”; and “to the extent that anything in [the] affidavit may be construed as involving a waiver of privilege, [Ms Morrison] withdraw[s] and [does not] rely on that part of the affidavit”. While Ms Morrison’s affidavits then made some attempt to support claims of confidentiality, nothing at all was said about which documents or what information was said to be privileged (other than in respect of the Confidential Counsel Opinion and the Supplementary Confidential Counsel Opinion (together, counsel’s opinion).

75    However, the schedules provided after the hearing of the Settlement Approval Application included legal professional privilege claims, alongside confidentiality claims, in respect of virtually all of the material over which suppression and non-publication orders were sought.

76    I am mindful that suppression and non-publication orders can be justified in order to preserve, as against the world, claims to legal professional privilege. Nevertheless (and excepting counsel’s opinion), in light of the late raising of privilege and the reliance by the Applicants on material latterly said to be privileged, I do not accept that a suppression and non-publication order over all the relevant documents and information referred to in the Applicants’ schedules as privileged can be justified on the basis of these late-asserted claims of legal professional privilege.

77    In addition, (and putting to one side the question of whether some of the materials over which the Applicants claimed privilege would qualify in the first instance) the Applicants advanced the Settlement Approval Application by providing numerous affidavits in support. Those affidavits put before the Court, in support of the orders the Applicants seek, the documentation to which I have had regard. Not only have I had regard to that material, as part of the evidence relied on by the Applicants, but the Applicants have themselves made submissions in support of the Settlement Approval Application that positively rely on various elements of this documentation to support submissions made, eg about what was disclosed to the Applicants in relation to the cost of ATE insurance. It is not open to the Applicants to pick and choose what may be referred to in my reasons, confining the reasons to the elements of this documentation that they are happy to have made public. I do not accept that the inclusion of a boilerplate paragraph in a solicitor’s affidavit — now de rigueur, it seems — asserting a lack of instructions to waive privilege, and purporting not to rely on anything that might involve a waiver, is effective to preclude reference in these reasons to material put before the Court by the Applicants, and to which I consider reference must be made, in circumstances where the privilege claims have only been raised after the hearing has concluded.

78    I accept, however, that it is appropriate to make orders under s 37AF in respect of counsel’s opinion. As I have addressed elsewhere (see paragraph 60 above; see also Ewok at [103] (Button J)), and as the Court’s Class Actions Practice Note at [15.1(a)(i)] reflects, the Court relies on counsel being able to provide a candid and fulsome account of their assessment of the merits of the case, in explaining why the settlement sum, and its proposed distribution, is fair and reasonable. The same is true of aspects of the Contradictor’s submissions, and some limited parts of Ms Morrison’s affidavits that address prospects.

79    I also accept that it is necessary, to prevent prejudice to the proper administration of justice, to make an order under s 37AF in respect of the names and any other identifying details of objecting Group Members. Group members are typically not involved in the conduct of class action proceedings, and should not be dissuaded from voicing any objections they may have to a settlement by their names and identifying details being made publicly available. As the Full Court recognised in Lee at [91] (Thawley, Stewart and Abraham JJ), some information, such as bank account details, may be misused if made public, yet be irrelevant to understanding the work of the Court or the reasons for decision. The same is true of the names and identifying information of objectors. The substance of their objections can be referred to and addressed, without this information being publicly disclosed.

80    My determinations in relation to the material the subject of the Applicants’ application is recorded in an annexure to these reasons.

CONSIDERATION OF THE PROPOSED SETTLEMENT

Whether the settlement sum is fair and reasonable

81    The settlement sum is $50 million. The settlement sum will be augmented by interest that has accrued on the settlement sum, following its payment by the Respondents into a holding account. In view of the delays to the hearing of the Settlement Approval Application, the interest is substantial. I was informed by counsel for OPC that, as at 11 February 2026, it stood at $2.195 million.

82    The primary means by which the Court evaluates whether the settlement sum is fair and reasonable is by reference to the confidential opinion of counsel.

83    In order for the Court to be best assisted to evaluate whether a proposed settlement is fair and reasonable, it is vital that the opinion of counsel be fulsome, and candid. The Class Actions Practice Note recognises, at [15.1(a)(i)], that the opinion of counsel will usually remain confidential. Preserving the confidentiality of the opinion of counsel is important to the proper administration of justice. One consequence, however, in maintaining the confidentiality of that opinion is that the Court is constrained in what it can say publicly about the opinion and the strengths and weaknesses detailed therein.

84    The authorities recognise that it is the parties and their legal representatives that are usually in the best position to appreciate the risks associated with the proceeding. In this matter, I have had the benefit of two careful and considered opinions of senior and (then) junior counsel: counsel’s opinion. Those counsel have had a long involvement in the matter, and were briefed to appear for the Applicants at trial. They are well placed to appreciate the strengths and weaknesses of the case, particularly given the matter settled very close to when the trial was due to commence.

85    Counsel’s opinion carefully addressed the claims made, the evidence bearing on the prospects of those claims (lay and expert evidence, as well as the documents to be tendered), and the prospects of success enjoyed in respect of discrete claims. I address this last aspect further below, in considering whether the proposed settlement is fair and reasonable as between Group Members.

86    Paragraph 15.5 of the Class Actions Practice Note sets out a number of matters that material filed in support of an application for Court approval of a settlement will usually be expected to address. These matters were adequately addressed by counsel’s opinion.

87    The Contradictor submitted that the settlement sum falls within the reasonable range. The Contradictor had available to him counsel’s opinion and also obtained, from the Applicants, a sub-set of the more significant lay witness, expert witness and documentary evidence filed for the trial, so as to better understand the way in which that evidence bore upon the risks faced by the Applicants and Group Members in establishing liability and quantum. The Contradictor’s submissions carefully considered the available material, including the calculations regarding the potential losses of the Group Members and discounts applied to them, and other matters taken into account by the Applicants in approaching the mediation, in considering what would constitute a reasonable settlement range. The Court was assisted by the Contradictor’s independent evaluation of these matters.

88    In my view, the settlement sum is comfortably within the range of reasonable settlement figures, having regard to the nature and complexity — factual and legal — of the issues in the proceeding, the strengths and weaknesses of the claims advanced, and the risks attending the litigation (including the prospect that even if successful at trial, the Applicants may well have faced an appeal, which would at the very least have added a substantial period to the already long duration of the litigation).

Whether the proposed settlement is fair and reasonable as between Group Members

89    No issue arises in this case concerning preferential treatment of the Applicants. Other than in respect of the modest payments to be made to each of them on account of their time and trouble in acting as lead Applicants, their personal claims will be subject to the same approach to calculation as the claims of all other Group Members.

90    As mentioned above, counsel’s opinion identified the risks attending the different claims advanced. Initially, the Applicants proposed an SDS that only applied a discount to the Commissions Claims, even though the initial opinion identified particular risks regarding the Cash (Term Deposit) Claims, and the claims that were the subject of additional risks arising from the limitation of actions defences pleaded by the Respondents.

91    Having considered the points raised by the Contradictor regarding this imbalance in the imposition of discounts in respect of the claims of different Group Members, the Applicants changed course and revised the Amended SDS so that discounts were imposed in respect of members advancing Cash (Term Deposit) Claims and the claims affected by limitations risks (claims that predate 23 December 2014). The discounts were incorporated in the Amended SDS.

92    The preparedness of the Applicants to give consideration to the Contradictor’s submissions and change course — rather than sticking doggedly to their guns — presents an example of the value of the role of Contradictor. It is somewhat regrettable that the Applicants previously strenuously resisted the appointment of a Contradictor.

93    It is not the Court’s task, on a settlement approval application, to assess whether it would have arrived at the same settlement proposal as is proffered for approval: Kemp at [18(a)] (O’Bryan J), citing Darwalla Milling Co Pty Ltd & Ors v F Hoffman–La Roche Ltd & Ors (No 2) [2006] FCA 1388; (2006) 236 ALR 322 at [50] (Jessup J); Kelly v Willmott Forests Ltd (in liquidation) (No 4) [2016] FCA 323; (2016) 335 ALR 439 at [74] (Murphy J). Rather, it is the Court’s task to consider whether the proposed settlement, and how it is to be distributed, is within the range of reasonable outcomes. This approach applies in considering the fairness of the proposed settlement as between Group Members, in light of the application of discount rates to some groups, and the amount of those discounts.

94    I consider that the reasons advanced in counsel’s opinion, and the Contradictor’s submissions, for the claims of Group Members with Commissions Claims, Cash (Term Deposit) Claims, and the claims affected by limitations issues being discounted, are sound. Consequently, I am satisfied that, while there is inevitably some bluntness in the categorisation of claims and the application of discounts when dealing with the claims of over 76,000 Registered Group Members, the proposed settlement (as it is to be applied through the Amended SDS) is fair and reasonable as between Group Members.

Proposed deductions from the settlement sum

95    The deductions that are proposed to be made against the settlement sum, prior to the balance being distributed to Group Members, are as follows:

(a)    “Legal Costs” of $15,151,441.94 which is the sum total of the following:

(i)    Slater and Gordon’s professional fees plus 25% uplift on fees in respect of the period before settlement (Slater and Gordon did not seek an uplift on professional fees after settlement);

(ii)    disbursements for counsel’s fees, experts’ fees, the costs of the Contradictor, the costs of Ms Rosati’s two reports on costs (the Costs Report and the Supplementary Costs Report), the costs of distribution of the Opt Out Notice and other miscellaneous disbursements; and

(iii)    ATE premium: $440,000 initial premium already paid to the insurance broker (including stamp duty) and $1.32 million contingent premium (including stamp duty), for which Slater and Gordon is liable under the terms of the ATE insurance policy, but which has not yet been paid;

(b)    “Administration Costs” of $3,082,880, which is the sum of:

(i)    anticipated professional fees in respect of settlement administration;

(ii)    disbursements in connection with settlement administration (including $2.34 million paid to Deloitte for its work in connection with the registration process); and

(iii)    the costs ($20,625) of sending out the Further NoPS to Registered Group Members following the revision to the Amended SDS; and

(c)    $40,000 proposed to be paid to the Applicants ($20,000 each) as compensation for their time and trouble in acting as the lead Applicants on behalf of the Group Members.

96    The sum total of the deductions for which approval is sought is $18,079,321.94 (once the $195,000 (explained at paragraph 210 below) is credited against the gross costs of $18,274,321.94. I accept that this is close to the total deductions figure advised to Group Members through the NoPS, which was approximately $18 million.

97    Without regard to the amount of interest, the sum available for distribution will be $31,920,678.06, which is just under 64% of the gross settlement sum. With the inclusion of interest accrued as at 11 February 2026, the sum available for distribution will be $34,115,678.06, just over 65% of the gross settlement sum (including interest). While at the higher end, I consider that deductions at this level are not obviously disproportionate. However, each category of costs needs to be considered and, as detailed below, there are specific issues that I address in respect of ATE insurance that have led me to conclude that the full deduction sought in relation to the deferred premium ought not be approved.

Legal costs and costs of settlement administration

98    The Applicants relied on two reports of Ms Kerrie-Ann Rosati, Principal of DGT Costs Lawyers. Ms Rosati’s initial report, the Costs Report, is dated 21 February 2025, and her Supplementary Costs Report is dated 3 September 2025. In the Costs Report, Ms Rosati considered the costs incurred and estimated to be incurred by the Applicants up to the date of the then-anticipated settlement approval hearing on 23 April 2025. As noted above, that settlement approval hearing date was deferred due to the OGM error. Accordingly, Ms Rosati’s Supplementary Costs Report addressed the actual costs incurred from 1 January 2025, and the costs anticipated but yet to be incurred.

99    Slater and Gordon summarised Ms Rosati’s process, reports and conclusions as follows in its submissions (footnotes omitted):

17    For the first Costs Report, the costs referee reviewed the CLCAs, updates provided to the lead applicants and, critically, the work conducted by SG from investigation until the in-principle settlement on 2 October 2024, and from 3 October 2024 until 31 December 2024. The costs referee relevantly found that: the CLCAs are compliant with divisions 3 to 5 of the LPUL; that the rates charged and work performed by SG were mostly appropriate, fair and reasonable; SG would be entitled to an uplift of 25% on its professional fees; that the rates charged and almost all of work performed by Counsel were fair and reasonable; that the disbursement costs associated with experts, and with the ATE insurance policy were appropriately incurred; and all other disbursements were fair and reasonable. In respect of the part of SG’s professional fees that might not be considered fairly and reasonably occurred up to 2 October 2024, Ms Rosati applied a global 7% discount. In respect of that period, SG seeks approval of its professional fees with that discount applied and a 25% uplift 25% on its professional fees for that period with that discount applied. In respect of the fees incurred from 3 October 2024 onwards, Ms Rosati has applied a 2.5% discount, which is reflected in the professional fees sought to be approved by SG in respect of that period to 21 August 2025.

18     For the Supplementary Costs Report, the costs referee reviewed SG’s updated costs, being those actually incurred from 1 January 2025 to mid-2025 and updated estimates of costs to be incurred, up to the hearing of the settlement approval application and, thereafter, in the settlement administration. The costs referee found the majority of work undertaken by SG from 1 January to 21 August 2025 to be reasonable, and all disbursements, including counsel fees, to be fair and reasonable. In respect of the most significant disbursement, fees to Deloitte, Ms Rosati assessed the work performed and disbursements incurred by Deloitte to be fair reasonable, noting in particular the size of the group member cohort, complications dealing with the omitted group members.

19     The costs referee further found the estimated further work to be conducted by SG and counsel up to the settlement approval hearing was fair and reasonable.

20     The estimate of future costs and disbursements associated with the settlement administration are assessed by Ms Rosati to be reasonable in light of the number of loss assessments that will need to be undertaken as part of the task.

100    I am satisfied that Slater and Gordon’s summary is accurate and that Ms Rosati conducted her examination having regard to relevant matters. In particular, I note that Ms Rosati examined the breakdown of work between fee earners at different levels, having regard to the complexity of the proceedings, and also to the spread of work between counsel and the firm. Ms Rosati approached the case on the basis that it was legally and factually complex with two lead applicants, multiple claim components, a lengthy investigation and research, and multiple sophisticated respondents who were vigorously defending the claims.

101    The legal fees and disbursements sought to be deducted are broadly in line with the sum advised to Group Members by the NoPS.

102    The Contradictor reviewed the Costs Reports and considered that the approach Ms Rosati took was reasonably open and that it would be appropriate for the Court to give her reports substantial weight. The Contradictor did not take issue with any aspect of the Costs Reports.

103    As Beach J has explained in Blairgowrie Trading Ltd v Allco Finance Group Ltd (Receivers & Managers Appointed) (In Liq) (No 3) [2017] FCA 330; (2017) 118 ACSR 614 at [181] (bold emphasis added):

But what is claimed for legal costs should not be disproportionate to the nature of the context, the litigation involved and the expected benefit. The Court should not approve an amount that is disproportionate. But such an assessment cannot be made on the simplistic basis that the costs claimed are high in absolute dollar terms or high as a percentage of the total recovery. … The question is to compare it with the benefit sought to be gained from the litigation. Moreover, one should be careful not to use hindsight bias. The question is the benefit reasonably expected to be achieved, not the benefit actually achieved. Proportionality looks to the expected realistic return at the time the work being charged for was performed, not the known return at a time remote from when the work was performed; at the later time, circumstances may have changed to alter the calculus, but that would not deny that the work performed and its cost was proportionate at the time it was performed. …

104    While the legal fees and disbursements appear high on their face, and a small number of Group Members lodged objections that raised concerns about the legal costs sought to be deducted, the quantum is to be approached by reference to the complexity of the proceeding and the anticipated returns, and not on a post-hoc retrospective analysis. I accept that the proceeding was investigated and approached on the basis that there would be a very large number of group members and the quantum of their combined claims could be very substantial. While counsel’s opinion exposes that the Applicants came to appreciate significant risks and weaknesses in parts of their claims as they prepared for trial, that does not gainsay that it was reasonable for significant resources to be invested in the pursuit of the litigation, particularly in the context of the litigation having run over a number of years, with three well-resourced Respondents vigorously resisting the claims.

105    Group Members were informed, by the NoPS, that approval would be sought for deductions totalling approximately $18 million. Of that sum, the NoPS stated that the Applicants would seek approval from the Court for the payment of approximately $13 million in legal costs, which included Slater and Gordon’s uplift. As referred to in paragraph 37 above, the NoPS separately informed Group Members of the proposed deductions in respect of ATE insurance (approximately $1.7 million), and anticipated settlement administration costs of approximately $3 million.

106    Likewise, the costs of settlement administration are also substantial. However, these costs reflect the fact that the proceeding has involved a very significant number of potential Group Members: approximately 367,000 notices were sent, from which there are 76,718 Registered Group Members. The settlement administration costs include fees and expenses of retaining Deloitte to assist with the registration process. Deloitte’s work included the distribution of the various notices of proposed settlement to Group Members, the development and maintenance of an online registration portal for Group Members (which is used to store Registered Group Members’ data and for communications with Registered Group Members), and the review and audit of the registrant data in order to provide a list of Registered Group Members. The costs of settlement administration equates to approximately $40 per Registered Group Member.

107    As regards the objections that the deductions for legal costs are excessive, the Contradictor submits that the total amount Slater and Gordon seeks to deduct is proportionate for a complex, long-running and hard-fought representative proceeding with three, separately represented, Respondents, and where a settlement was reached only two weeks before the trial was scheduled to commence. Relatedly, Slater and Gordon submits that had the proceeding been conducted with third-party litigation funding, as opposed to on a “no win, no fee” basis, Group Members would have presumably faced the further deduction of a commission, on top of the other professional fees and disbursements.

108    In relation to the costs being fair and reasonable, Slater and Gordon further submits that as it complied with divs 3 and 4 of pt 4.3 of sch 1, being the Legal Profession Uniform Law (LPUL), of the Legal Profession Uniform Law Application Act 2014 (Vic), which set out the cost disclosure obligations of lawyers, by way of the conditional legal costs agreement entered into with the Applicants, and Slater and Gordon’s further costs updates to the Applicants, that gives rise to a prime facie assumption that the professional fees and disbursements incurred are fair and reasonable. However, while Slater and Gordon say that this prima facie assumption is relevant, it relies on the Costs Reports to ground its position that the legal costs incurred are fair and reasonable. Slater and Gordon also submits that it complied with the requirements of ss 181 and 182 of the LPUL in relation to charging an uplift on professional fees.

109    With the exception of the ATE insurance costs, I am satisfied that it is fair and reasonable for the legal costs and administration costs to be approved as deductions against the settlement sum.

ATE insurance

110    Approval is sought for a deduction in the amount of $1.76 million in respect of ATE insurance taken out by Slater and Gordon. An initial premium of $440,000 has already been paid by Slater and Gordon. Under the terms of the ATE policy, to which I will return, Slater and Gordon is liable for an additional, deferred and contingent, premium of $1.32 million. Approval is sought to deduct that sum from the settlement sum, in addition to deductions for legal costs, including Slater and Gordon’s 25% uplift on legal fees.

111    It is necessary to put what follows about ATE insurance and the deductions for which approval is sought, in the context of the facts of this case. That is best done chronologically.

112    What follows is a more detailed account of the funding of a class action proceeding than is usually to be found in settlement approval judgments. The detail is necessary to explain why I do not accept the argument that the ATE premiums should be allowed in full as deductions against the settlement sum because Slater and Gordon ran the proceeding on a “no win, no fee” basis, and its 25% uplift on fees has nothing to do with it taking on the risk in respect of adverse costs.

113    Some of this detail is also necessary in view of what I say later about the economic dynamics of ATE insurance, and why I am not satisfied that a full deduction of the ATE premiums is fair and reasonable.

Facts

Initial letters to potential Representatives

114    Slater and Gordon issued letters to the two named Applicants, Mr Reeves and Mr Janssen (referred to as the “Representatives” in the correspondence), on 31 July 2020. Those letters stated that their purpose was to confirm in writing the nature and scope of the Representatives’ role, including their entitlement to recover the costs they incur in the role, and guidance on how to keep records of time and expenses for the purposes of such recovery. Those letters stepped through the limited role of lead applicants in class actions, including noting that Slater and Gordon would be retained on the basis that they had authority to conduct the action as they consider appropriate, with the Representatives only being asked to give instructions at key stages.

115    These letters included a section “Legal Fees and Funding options”. The letters stated that “under no circumstances” would the Representatives, or any Group Members, “be subject to any out of pocket costs”. Under cover of that general assurance, the letters outlined three possible means by which the action would be funded. First, by Slater and Gordon obtaining either a group costs order or “litigation services fee”, with legal costs calculated as a percentage of any award or settlement (a contingency fee). The letter went on to say that if neither of those options were obtained, the proceeding may be funded by entering into a funding agreement with a third-party commercial litigation funder, or by Slater and Gordon electing to conduct the class action on a conditional or “No Win, No Fee” basis. Having set out those three options — a contingency fee (by different names), third-party litigation funding, and “no win, no fee” funding — the letters reiterated that none of those models require the Representatives to pay any money out of pocket to meet legal costs, including fees and disbursements. The letters said that, if the recipients “agree to take on the role of Representative”, Slater and Gordon would then send its legal costs agreement and costs disclosure statements to them.

116    The letters then contained a section headed “Adverse costs, insurance and security for costs liability”. That section explained adverse costs orders and said that Slater and Gordon would make arrangements to indemnify the Representatives against any potential adverse costs order and that this would be done “in the first instance” by a direct indemnity from Slater and Gordon, subject to an acknowledgement that, inter alia, Slater and Gordon may insure against that risk, and/or engage a third-party to post security for costs, with such costs being treated as disbursements in the class action.

117    As those letters stated explicitly, Slater and Gordon’s preferred funding option was a contingency fee.

Legal costs agreements

118    Slater and Gordon later issued its legal costs agreement and costs disclosure statements to Mr Janssen under cover of a letter dated 20 August 2020, and to Mr Reeves under cover of a letter dated 14 October 2020, which continued to identify the same funding options. The letters noted that it was likely the basis for funding would not be determined until after the proceeding was initiated.

119    Under the legal costs agreement, Slater and Gordon had authority to make day-to-day decisions in relation to the conduct of the proceeding, as had been foreshadowed in the initial letters.

120    The legal costs agreement provided an estimate of costs. The Applicants rely on the fact that these letters stated that the estimate included the cost of obtaining insurance for the risk of an adverse costs order, and the cost of posting security for costs by way of a deed of indemnity from such an insurer. The agreement stated that Slater and Gordon estimated that those costs would total $2 million. However, the costs agreement said nothing about the indemnity limit for which such ATE insurance might be obtained. It also said nothing about the premium structure, in terms of there being an initial and also a contingent deferred premium.

121    The letters set out some further information regarding what was being agreed to if no contingency fee was sought or obtained by Slater and Gordon, and a litigation funder was involved. The letters also provided further detail in relation to recovery of legal costs on a “no win, no fee” basis. In respect of the 25% uplift, the costs agreement stated that the uplift was warranted because, if the case failed, Slater and Gordon would not be paid for work performed, and Slater and Gordon would carry the cost of legal services for a substantial period of time until a successful outcome was achieved.

122    In respect of the potential for an adverse costs order, the legal costs agreement stated that Slater and Gordon had agreed to indemnify the Representatives, subject to the Representatives’ acknowledgement of various matters. One of those matters was that Slater and Gordon may insure against the risk of an adverse costs order and/or engage an insurer or other third-party to post security for costs and that the costs of any insurance arrangements would be treated as “Disbursements”. That term was defined to include not only amounts paid, but amounts for which Slater and Gordon was required to pay, including insurance costs.

Commencement of the proceeding, provision of security and continuing intention to seek a solicitors’ common fund order

123    This proceeding was commenced, with the originating application dated 23 December 2020, and stamped on 8 January 2021. There was no ATE insurance in place when the proceeding was commenced. Obviously enough, once the proceeding was commenced in this Court, the prospect of a contingency fee being secured through the making of a group costs order fell away (such orders only being available in the Supreme Court of Victoria). From that point, the contingency fee, if it was to be secured, would be by obtaining a common fund order (CFO) in favour of Slater and Gordon.

124    At the time the proceeding was filed, the “Notice of Disclosure — Litigation Funding Agreement” notified of the intention to seek a CFO and annexed the legal costs agreement.

125    Ms Morrison deposes that third-party funding was not secured for the pursuit of the proceeding and the proceeding was commenced and continued on the basis that there would be an opportunity to apply for a CFO, but, in view of BMW Australia Ltd v Brewster [2019] HCA 45; (2019) 269 CLR 574, a CFO could not be applied for early on in the proceeding.

126    In May 2021, Slater and Gordon provided security for costs by providing a Deed Poll to the Respondents.

Entry into the ATE policy

127    A significant period of time passed following the commencement of the proceeding, before Slater and Gordon took out the ATE policy, which is dated 20 October 2021. Between the date when Slater and Gordon contractually indemnified the Applicants in respect of adverse costs orders (August and October 2020) and the date when the firm insured against its risk in respect of an adverse costs order, more than a year passed.

128    Under the terms of the ATE policy, the insured was Slater and Gordon. Under the terms of the policy, Slater and Gordon was obliged to pay the “Deposit Premium” and the “Contingent Premium” at the points stated in the schedule. I note that the obligation to pay both the Deposit Premium and any Contingent Premium was an obligation assumed directly by Slater and Gordon as the insured.

129    The “Deposit Premium” was set at 10% of the limit of indemnity, which was $4 million (this amount was $440,000 once grossed up for stamp duty). The Deposit Premium was payable within 21 days of the inception of the policy. This amount was paid by Slater and Gordon out of pocket.

130    The policy also provided for payment of a “Contingent Premium”. That premium is payable within 21 days of the receipt of any moneys claimed in the legal action. The deferred Contingent Premium was payable as follows (in addition to the Deposit Premium):

(a)    15% of the limit of indemnity if the action is settled within 12 months of the inception of the policy;

(b)    22.5% of the limit of indemnity if the action is settled more than four months [before] the listed trial commencement date; and

(c)    30% of the limit of indemnity [if the action is settled] within four months of the listed trial commencement date.

131    The policy included terms that permitted the insurer to cease providing the indemnity if it reasonably believed there had been a “material adverse decline”. In other words, if it believed the prospects of success had declined such that it was more likely than not that there would not be any success in the action.

The Opt Out Notice

132    The Opt Out Notice, as discussed above at paragraph 32ff, was sent to Group Members in May 2024.

133    The Opt Out Notice clearly stated that the preferred funding option was to apply for a solicitors’ CFO, with funding on the “no win, no fee” basis only being a backup, to be pursued “if the Court does not approve a solicitors’ common fund order”. In that event, the notice advised as follows (bold emphasis added):

If the Court does not approve a solicitors’ common fund order … Slater and Gordon will seek to be paid professional fees charged in accordance with the agreed rates under the Costs Agreement, which includes an uplift of 25% to those rates as compensation for the risk of undertaking no-win-no-fee litigation. If approved, these legal costs would be deducted from the resolution sum prior to distribution to eligible Group Members.

134    This Opt Out Notice addressed adverse costs and security for costs. It stressed that, if the action were to be unsuccessful, Group Members would not have to pay anything. It said as follows in relation to the risk of an adverse costs order (bold emphasis added):

Only the Applicants face the risk of an adverse costs order or an order for security for costs, so these costs do not apply to you as a Group Member. On the basis that a solicitors’ common fund order will be sought in this proceeding, Slater and Gordon has agreed to pay any adverse costs and security for costs ordered against the Applicants in the class action.

135    As may be seen, this notice advised Group Members that it was the prospect of securing a CFO that stood behind the firm’s indemnification of the Applicants in respect of any adverse cost orders or security for costs orders.

136    The fact that Slater and Gordon had taken out the ATE policy three years earlier, in October 2021, was not referred to in the Opt Out Notice. While the notice anticipated that a CFO may not be secured, the notice only advised Group Members that, if no CFO could be obtained, the Applicants would be seeking an approved deduction for Slater and Gordon’s “professional fees”, which included the 25% uplift. There was no mention of also seeking recovery of other sums, such as ATE insurance costs.

The lead up to mediation and continuing consideration of a solicitors’ CFO

137    Ms Morrison deposes that she provided an updated costs estimate to the Applicants by letter in August 2024, in the lead up to the mediation. In addition to providing an updated cost estimate, the letter noted that a litigation services fee (as the solicitors’ CFO was referred to in the letter) would be for “up to 24%” of any settlement sum, and that Slater and Gordon may seek such a fee if it would result in higher fees to Slater and Gordon than the firm would receive under the “no win, no fee” funding model.

138    At this point, the firm was keeping its funding options open, with a view to pursuing a CFO if it would “result in higher fees” being paid to Slater and Gordon than it would receive on the “no win, no fee” funding model.

Information about settlement provided by the NoPS and the Combined Notice

139    Ms Morrison deposes that, although a Full Court of the Federal Court held in July 2024 that a CFO could be granted in favour of solicitors (referring to R&B Investments Pty Ltd (Trustee) v Blue Sky (Reserved Question) [2024] FCAFC 89; (2024) 304 FCR 395), in view of that power being challenged in the High Court, she did not seek instructions to seek a CFO at the settlement approval hearing.

140    This explains why the NoPS only disclosed costs under the “no win, no fee” funding model even though, leading up to the mediation, the preference remained to apply for a solicitors’ CFO if that would yield a higher return. It was only when the NoPS had to be formulated, and issued, that Slater and Gordon committed to the “no win, no fee” funding model as the basis upon which deductions from the settlement sum would be sought.

141    The NoPS was distributed to Group Members pursuant to the Preliminary Orders, as discussed above at paragraph 35. That notice said as follows, in relation to “legal and other costs” (bold emphasis added):

The OnePath Class Action has been run by Slater and Gordon on a “no win, no fee” basis. This means that Slater and Gordon have incurred professional legal fees, counsel’s fees, disbursements and After the Event (ATE) insurance on the basis that Slater and Gordon will only be paid in the event of a successful outcome. Slater and Gordon will therefore seek payment or reimbursement of those legal costs, plus an uplift of 25% on the professional legal fees, from the Settlement Sum.

142    By this paragraph, the notice conveyed that Slater and Gordon had incurred the costs of ATE insurance “on the basis that” it would only be paid in the event of a successful outcome. In this way, the notice linked the cost of ATE insurance to the “no win, no fee” conduct of the proceeding by Slater and Gordon.

143    The NoPS went on to say that an “estimate of the Applicants’ legal costs is set out below”. Under the heading “Legal Costs”, the NoPS stated:

20.    The Applicants will seek approval from the Court for the payment of approximately $13 million in legal costs from the Settlement Sum for the costs up to and including settlement approval.

21.     This includes all professional legal fees and disbursements incurred in the proceeding to date and estimated future costs for the application for approval of the Proposed Settlement. This also includes an uplift of 25% on Slater and Gordon’s professional legal fees which is claimed to account for the risk taken by Slater and Gordon in running the proceeding on a “no win, no fee” basis.

144    Under the heading “ATE Insurance”, the NoPS stated:

26.     The Applicants will seek reimbursement of ‘After the Event’ (ATE) insurance premiums of approximately $1.7 million.

27.     Slater and Gordon secured ATE insurance to cover the Applicants’ risk of being ordered to pay the Respondents’ legal costs in the event of an unsuccessful outcome.

145    Two matters should be noted:

(1)    By referring to “reimbursement”, the NoPS conveyed that the cost of the ATE insurance premiums had been paid, in the sense of an out-of-pocket expense having been incurred. That was not accurate, as only the initial premium of $440,000 (including stamp duty) had been paid.

(2)    This notice suggested that the insurance was taken out to protect the Applicants against a personal risk of being ordered pay the Respondents’ legal costs. That was also not entirely accurate as the Applicants’ position had already been protected by the indemnity given by Slater and Gordon at the outset, well before the ATE insurance policy was taken out (albeit that in giving the indemnity, it was foreshadowed that the firm may choose to insure against the adverse cost risk).

146    Information in the same terms was provided to the Omitted Group Members in the Combined Notice, pursuant to the Omitted Group Members Orders. The Further NoPS issued to explain the Amended SDS and provide a further opportunity to object, did not refer to funding matters.

The decided cases on ATE insurance

147    During the hearing of the Settlement Approval Application, counsel for Slater and Gordon suggested that the law on ATE premia “has been a mess for a while”. That might be a bit harsh. As counsel went on to submit, it is hard to compare facts in one case with the facts in another. In part, that difficulty arises because of the paucity of information revealed in settlement approval judgments regarding the policies and premia, no doubt due to confidentiality claims that are made in support of suppression and non-publication orders.

148    I set out aspects of the case law, as it has evolved, and insofar as it is relevant to the issues in the present case.

149    There are only four decided cases regarding ATE insurance in class actions funded by solicitors acting on a “no win, no fee basis”: Kemp; Reilly v Australia and New Zealand Banking Group Ltd (No 5) [2023] FCA 896 (Reilly); Fordham v Commonwealth Bank of Australia [2023] FCA 1106 (Fordham) and J Wisbey & Associates Pty Ltd v UBS AG (No 3) [2025] FCA 1018 (Wisbey).

150    Kemp, Reilly and Fordham comprise a set of three proceedings, all run by the same firm (Slater and Gordon), involving the same insurer (and broker), and were settlement approval applications decided by O’Bryan J. I refer to these three cases, which were all decided in 2023, as the CCI cases as they all concerned consumer credit insurance that was sold to consumers when taking out credit cards and personal loans. There was no contradictor in the CCI cases, nor was there one in Wisbey. Wisbey was decided in 2025.

151    Those four settlement approval applications were made against the backdrop of cases concerning deductions for ATE insurance that concerned third-party-funded class actions.

152    In Perera v Getswift Ltd [2018] FCA 732; (2018) 263 FCR 1, Lee J set out, at [195], the principle that, in assessing the reasonableness of a funder's remuneration, it is the total amount to be paid to the funder, including any ATE insurance costs, that is relevant, rather than any individual component assessed in isolation (the aggregate principle). The aggregate principle was then adopted by Black J in Williamson v Sydney Olympic Park Authority [2022] NSWSC 1618 (Williamson) at [83]. Referring to Williamson, in Ghee v BT Funds Management Ltd [2023] FCA 1553 (Ghee), Murphy J, at [150], stated:

In my view there is no real difficulty with approaching the issue on the basis proposed in Williamson. The question can be boiled down to whether the combined amount of the proposed funding commission and ATE costs is reasonable and proportionate. Indeed, that was the effect of the approach I took in Petersen and in Spotless.

153    There are cases in which the aggregate approach has resulted in the deduction of both a funding commission and ATE costs being approved. In Williamson, Black J concluded that the combination of the proposed funding rate and ATE costs resulted in unreasonable litigation funding charges but, rather than excluding ATE costs altogether, reduced the total amount payable to the funder for both its commission and ATE costs to no more than 25% of the gross settlement: at [83]–[87]. In Eckardt v Sims Ltd [2022] FCA 1609, Wigney J cited Williamson with approval and approved payment of both a funding commission and ATE costs on the basis that the total funding charges were within a reasonable range: at [40]–[43].

154    While Murphy J adopted the Williamson framework in Ghee, his Honour noted at [151] that a significant factor in the overall analysis is the concern that a funder may impermissibly seek to “have it both ways” — justifying a funding commission by reference to its exposure to an adverse costs order while simultaneously seeking the reimbursement of the cost of defraying that very risk through ATE insurance (the double-dipping concern). As Murphy J observed in Ghee, such arrangements are not transparent for group members, are difficult to understand, and carry a tendency to mislead group members who are primarily focused on the headline rate: at [151]. His Honour concluded that there is no good reason for funders separately to charge such amounts when the approximate exposure to adverse costs is known from the outset and can be built into the funding rate from the beginning: at [151].

155    The double-dipping concern was first raised by Murphy J in Spotless at [96]:

During the settlement approval hearing I expressed a preliminary view that if Funders wished to recover the expenses associated with providing an adverse costs indemnity (the ATE premiums and stamp duty) and providing security for costs (the Deeds of Indemnity) by deduction from the Settlement Fund, they should not be permitted at the same time to rely upon the cost of putting up security for costs and their exposure to the risk of an adverse costs order to justify the percentage funding rate they sought. In my view the Funders should not be able to have it both ways. I considered that those aspects of the Funding Terms reduced the costs and risks which the Funders assumed, and pointed towards allowing a funding rate lower than the 22.5% funding rate the Funders’ seek.

156    Following Spotless, the double-dipping concern has been raised by judges hearing settlement approval applications in many cases. This line of cases concerning double dipping by third-party funders was set out by Murphy J in Ghee at [147]:

147    Eighth, the question as to whether it is reasonable to allow a litigation funder to be paid a funding commission in return for the risks it takes on, plus be reimbursed the ATE costs it has paid, has been considered in a number of cases:

(a)    in GetSwift first instance at [193] Lee J observed that one way or another, upon success in litigation, the applicant and group members pay for the cost of any indemnity against an adverse costs order. They either pay it by way of a direct reimbursement of the funder’s ATE costs from the gross settlement or judgment, or they pay it because the cost of the indemnity is absorbed by the funder into its funding rate.

(b)    in Petersen (at [202]–[203]) I held that because the funder took out ATE insurance it mitigated its risk of exposure to an adverse costs order through the indemnity it provided the applicant. And because the ATE costs were ultimately to be met by the applicant and group members by deduction from any gross settlement, the risk the funder took on were lower and a lower funding commission was appropriate;

(c)    in Spotless at [96] I observed in the course of the hearing that the funder should not be permitted to separately charge for its ATE costs, and at the same time point to its exposure to the risk of an adverse costs order to justify the funding rate that it sought. In response the funder withdrew its application for reimbursement of its ATE costs;

(d)    in Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 3) [2020] FCA 1885; 385 ALR 625 at [32] Lee J referred to his remarks in GetSwift first instance, and in the context of an application for a common fund order said that a funder should not be permitted to recover:

…the costs of the funder performing its central obligation to provide an indemnity against adverse costs. If a funder wishes to defray their risk of performing that obligation it is matter for the funder but, in my view, it is not a cost that ought be passed on separately to group members when the Court controls the remuneration.

(e)    in Davantage at [84] Beach J allowed the recovery of ATE costs in addition to a funding commission, but said that:

Now I have some sympathy for the view that if I was considering the first option, then allowing the ATE premiums, whether as a direct recovery or within the base, would have its difficulties. After all, the 25% first option would reflect the relevant remuneration or reward for all risks assumed by the funder. So, if it sought to enter into ATE insurance to defray or minimise risk, that would be on its own coin. It could not have both the relevant premiums and insist on the 25%. But I do not have that scenario.

(f)    in Bradshaw v BSA Limited (No 2) [2022] FCA 1440 at [161]–[162] Bromberg J said:

Where a funder defrays its risk of providing an indemnity to an applicant in relation to an adverse costs order which may be made against an applicant, the funder cannot charge for both taking the risk and defraying the risk. Only one or the other can be justified. To claim both would be to double-dip or as Murphy J said in Spotless at [96] “to have it both ways”: see further Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 3) (2020) 385 ALR 625; [2020] FCA 1885 at [32] (Lee J) and [Davantage] at [84] (Beach J).

Here, the Funder has sought to justify “the commission component of the deductions in favour of the Funder for which approval is sought” on, inter alia, the risk of “exposure to adverse costs”. Having done that, the Funder cannot legitimately seek either the reimbursements of the costs of defraying that risk or seek that those costs be counted as part of the capital which the Funder put at risk.

(g)    in Wetdal Pty Ltd as Trustee for the BlueCo Two Superannuation Fund v Estia Health Limited [2021] FCA 475 at [125] Beach J allowed a funder to recover both a funding commission and the amounts paid under the ATE policy. His Honour was, though, at pains to say that the funder was only seeking to recover its contractual entitlements under the LFA and he was not able “to consider afresh what commission rate would reflect the relevant remuneration and reward for all risks assumed by the funders, and how such a rate ought reflect the mitigation of risk effected by the ATE policy.”

157    Applying these principles, in Ghee, Murphy J considered that allowing a funding commission of $6.52 million plus separate reimbursement of $1.18 million in ATE costs would produce total funding charges of $7.699 million, equating to 25.7% of the gross settlement. In his Honour's view, the legal costs paid by the funder and the low risk it actually assumed of an adverse costs order above the ATE policy limit did not justify that total: at [154]. At the same time, disallowing ATE costs altogether would have left the funder with an effective commission of $5.339 million (17.8% of the gross settlement) which would not fairly remunerate it for the costs and risks assumed: at [154]. Justice Murphy therefore approved total funding charges of $6,888,500, representing 23% of the gross settlement, as reasonable and proportionate in the circumstances. This amount encompassed both the commission and the ATE costs, but at a reduced combined total: at [154]–[155].

158    A recent application of the principles outlined in Ghee is Krieger v Colonial First State Investments Ltd [2024] FCA 1402 (Krieger), another decision of Murphy J. In Krieger, the funder sought total funding charges of $23,111,979.90, comprising a funding commission of $18,195,892.87 and $4,916,087.03 in ATE costs and security costs: at [129]. The ATE insurance was obtained in three tranches up to a total of $9 million in cover, with $2,520,000 paid upfront and $2,016,000 deferred, and the balance comprising security costs of $380,087: at [122].

159    In Krieger, the funder approached its claim for ATE costs not as a separate line item but as part of the overall question of whether the total funding charges were reasonable and proportionate. Justice Murphy expressly accepted this framing and addressed ATE and security costs as part of the overall consideration: at [124]. As part of his Honour’s consideration of the ATE costs, Murphy J observed that the upfront premium and security costs constituted a proxy for the amount the funder had actually risked in relation to adverse costs — because those amounts would not be recovered if the case was unsuccessful — whereas the deferred premium was not truly at risk as it would only become payable on a successful outcome: at [156]. Ultimately, Murphy J approved total funding charges of $23,111,979.90, representing 23.1% of the gross settlement: at [164].

160    Returning, then, to the cases in which ATE insurance has arisen in solicitor-funded class actions, in the CCI cases, O’Bryan J approached the question on the basis that analogous considerations to those arising in the third-party-funded context apply in the solicitor-funded context. That is, whether the ATE insurance costs are reasonable — assessed by reference to whether the terms of the policy are appropriate in the context of the proceeding and whether the premium has been determined in the competitive market setting — and whether the ATE costs are not otherwise being recovered through the solicitors’ success fee. As an example, in Kemp, O’Bryan J said the following at [91] (bold emphasis added):

In my view, analogous considerations arise in the context of a class action that is conducted by solicitors on a “no win no fee” basis, but where the solicitors are entitled to a “success fee”. An adverse costs order is a material risk faced by the representative applicant and the applicant’s solicitors. The acquisition of ATE insurance to mitigate that risk is a reasonable step to be taken by the applicant and the applicant’s solicitors. The solicitors ought to be permitted to recover the costs of an ATE insurance policy if the Court is satisfied that the costs are reasonable and that the costs are not otherwise being recovered through the solicitors’ success fee. The costs would be assessed as reasonable if the terms of the policy are appropriate in the context of the proceeding and the premium charged for the policy has been determined in a competitive market setting. The costs of ATE insurance may not be reasonable if a proceeding is brought in a “no costs” jurisdiction: see for example Bradshaw at [148] per Bromberg J.

161    Ultimately, in all three of the CCI cases, where the ATE policy was in substantially the same form, O’Bryan J allowed the deduction for ATE costs, finding that there could be no expectation that the risk of an adverse costs order had been factored into, and effectively absorbed by, the solicitors’ success fee, and that the potential need for ATE insurance and the additional costs involved had been disclosed in the legal costs agreement: Kemp at [92]; Reilly at [89]; Fordham at [98].

162    In Wisbey, Beach J also allowed the deduction for the ATE insurance premium, relying on the principles set out by O’Bryan J in the CCI cases. However, again, the judgment does not disclose much detail about the ATE insurance policy. The judgment simply discloses the total premium and that the amount was approved as part of a circa $34 million legal costs deduction: at [93]. The judgment does not disclose how many different ATE insurance payments were made, when they were made and whether there was an initial/deferred contingent premium structure.

163    Having regard to this case law, the following points may be noted:

(1)    Where an entity funds the conduct of a case in a way that includes taking on the risk of adverse costs orders and is rewarded for taking on that risk, allowing a deduction for the costs of ATE insurance in addition to the reward for risk is increasingly seen as “double-dipping” and the deduction is often not approved. However, if having regard to the aggregate to be paid to the funder of a class action — both commission and any additional deductions — shows that the aggregate return for risk is still reasonable, deductions over and above the commission may be approved, or a combined total may be approved. On these points, see: Spotless at [96]–[97] (Murphy J); Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 3) [2020] FCA 1885; (2020) 385 ALR 625 (Asirifi) at [32]–[33] (Lee J); Bradshaw v BSA Ltd (No 2) [2022] FCA 1440 (Bradshaw) at [161]–‍[162] (Bromberg J); Ghee at [147]–[155] (Murphy J); Krieger at [121]–[124], [155]–[156] (Murphy J); Williamson at [83]–[87] (Black J).

(2)    Taking on the risk of adverse costs orders is seen as part of the core function of third-party litigation funding arrangements: Asirifi at [32] (Lee J); Ghee at [147(d)] (Murphy J).

(3)    There is very limited case law on ATE premiums where matters are solicitor-funded. Three of the four decided cases concerned a suite of cases with the same solicitor, policy and underlying issues and arrangements.

(4)    What is communicated to group members is important, including in relation to what they are told about who is taking on what risk, and what the rewards for taking on the risks are: Camilleri at [5(f)] (Moshinsky J); Williamson at [9]–[11], [49], [63], [84] (Black J).

Why a deduction for the full cost of the ATE insurance will not be allowed

164    The central contention advanced in support of a deduction being approved for the costs of the ATE insurance is that the proceeding was funded on a “no win, no fee” basis, and the 25% uplift is only referable to the firm taking a risk on recovering its fees, and being kept out of its funds for a long period. Relying on the CCI cases, it is said that the 25% uplift has nothing to do with the adverse costs risk taken on by Slater and Gordon, in respect of which risk the ATE insurance policy was taken out and so it cannot be said that the solicitors are rewarded for the adverse costs risk by that uplift.

165    Things are not that simple.

166    In this matter, Slater and Gordon hedged its bets about the basis upon which the proceeding would be funded. It preserved, until the last practical moment, the option of seeking a contingency fee by a solicitors’ CFO. From very early on in the life of this proceeding, a contingency fee was identified in communications with the Applicants as the likely preferred funding model. Third-party litigation funding, and funding by Slater and Gordon on a “no win, no fee” basis were identified as possibilities as well. In advance of the mediation, Slater and Gordon informed the Applicants it may seek a solicitors’ CFO if that would deliver it higher fees than proceeding with the “no win, no fee” funding model.

167    As I have set out above, the firm only elected to proceed on the “no win, no fee” funding model after the mediation took place, a settlement sum was known, and there was a perfectly appropriate desire to move forward quickly with settlement approval.

168    At the time the liability for the costs of the ATE insurance was incurred, Slater and Gordon anticipated being remunerated on a contingency fee basis. Had that plan proceeded, I doubt (in light of the “double dipping” case law set out above) that any attempt would have been made to recoup the ATE costs over and above the contingency fee. Even well into 2024, the latest information to Group Members was that the firm still intended to apply for a CFO.

169    Where does that, perhaps unusual, factual scenario leave the risk-reward element that is to be considered in relation to whether ATE premiums should be allowed as deductions? In my view, the facts here show that it is overly simplistic, and not reflective of reality, to suggest that, because the proceeding has ultimately been funded on a “no win, no fee” basis, the uplift in fees has nothing to do with the risk of adverse costs orders assumed by Slater and Gordon and the ATE insurance costs should therefore be approved as an additional deduction. That is so for a number of reasons.

170    In Asirifi, assuming the risk of adverse costs orders was identified as a key part of the role of a third-party litigation funder: at [32] (Lee J). In other words, indemnifying the named applicant(s) against adverse costs orders is part and parcel of what the funder does, in addition to paying some or all legal fees and other disbursements. So, too, here the firm conducted the case on the basis that it indemnified the Applicants against adverse costs orders, and met the disbursements, as well as carrying its own fees. But the submission is that the 25% uplift has nothing to do with the indemnification of the Applicants against an adverse costs order, and only relates to the risk the firm took on not recovering its own fees. That is not a self-evident truism.

171    In this case, the Contradictor’s submissions highlighted that uplift fees are regulated by s 182 of the LPUL, and can be up to 25% of the legal costs (excluding disbursements) otherwise payable. The Contradictor noted that s 182 does not make the charging of an uplift fee conditional on a solicitor assuming the risk of satisfying an adverse costs order on behalf of a client.

172    That is, of course, accurate, but does not fully address the issue. The legislative regime applies to conditional costs agreements in all manner of litigation. Open class consumer-level class actions are a particular kind of proceeding. While indemnifying an applicant against the risk of an adverse costs order is recognised as part and parcel of what a third-party litigation funder does in such a proceeding, I do not accept that a firm of solicitors likewise indemnifying lead applicants is somehow going “above and beyond”. The reality, which is reflected in Slater and Gordon’s letters to the Applicants in asking whether they would be willing to be Representatives of the group, is that the action would simply not get off the ground if the firm in question did not indemnify its proposed named Applicants.

173    That indemnification was offered, and given, right at the outset of this proceeding, many months before ATE insurance was taken out. And, as I have already emphasised, that insurance was taken out when all indications were that the firm would be seeking a contingency fee. In that light, the statement in the NoPS that the ATE insurance was taken out to “protect the Applicants” is not the full story, if it is literally true at all (see paragraphs 144–145 above).

174    Ms Rosati states in the Costs Report that the ATE insurance was taken out to “to protect the Applicants from any adverse costs consequences”. However, Ms Rosati does not embark on any examination of the quantum of the ATE insurance premium. Nor does she appear to have considered that the Applicants were already protected from adverse costs by the terms on which they retained Slater and Gordon, such that the taking out of the ATE insurance policy was to defray Slater and Gordon’s risk. Ms Rosati’s examination of the ATE insurance applied what might generously be described as a light touch.

175    In the course of oral submissions, I raised with counsel that the NoPS incorrectly stated that the cost of ATE insurance was being sought as a “reimbursement” when in fact only the initial premium had been paid (see paragraphs 144–145 above).

176    Such inaccuracies in statements in the notices going to Group Members cannot be disregarded as merely “inelegant” matters that ought not be of concern (as was the submission in relation to the NoPS). The point is not just whether Group Members were informed of the “bottom line”, in terms of being informed that approval for deductions with certain dollar values will be sought. Group Members also need to be given accurate information about what the expenses were for, and the basis on which they were incurred. Group Members were told the ATE insurance expense was incurred to protect the Applicants and that approval would be sought for a “reimbursement”.

177    In addition, Group Members were initially informed, by the issue of the Opt Out Notice, that if a CFO was refused and the “no win, no fee” model would apply, a deduction would be sought for “professional fees” plus 25%. There was no disclosure of additional deductions being sought for ATE insurance. The Opt Out Notice also informed Group Members that the indemnification of the Applicants’ adverse costs risk was given as part of the quid pro quo for the intended CFO. When it was decided, after the mediation, only to pursue the “no win, no fee” funding, the NoPS explained that the ATE costs were incurred as part of the “no win, no fee” funding model.

178    This constellation of circumstances, including ambiguous and incomplete or inaccurate notices to Group Members — sets this case apart from the hypothetical straightforward solicitor-funded “no win, no fee” conduct of a class action. Based on these matters alone, I would not allow the full deduction sought for the ATE insurance.

179    This case does, however, also have features which are not particular to the perhaps unusual facts of this proceeding. These matters raise broader considerations concerning the economic dynamics that may work to make ATE insurance more expensive than it might otherwise be, and the deduction sought (over and above legal fees) commensurately higher. There are questions concerning whether conflicts between the interests of solicitors acting on “no win, no fee” models, and the interests of group members, are being adequately recognised and addressed in taking out this insurance.

180    The ATE policy taken out by Slater and Gordon is structured so that the insurer assumes the risk of an adverse costs order in return for payment of the initial — or “deposit” — premium. Were the litigation unsuccessful so that the risk insured against would actually come to pass, the insurer would have been required to meet that obligation and no further premium would have been payable. In short, the price the insurer was prepared to accept to carry the insured risk was $440,000 (including stamp duty) (subject to its ability to exit the policy if its assessment of prospects became unfavourable — see paragraph 131 above).

181    The ATE policy is structured so that it is only when the risk insured against is no longer a risk at all — because there has been a successful outcome — that the insurer is entitled to a further premium.

182    On Ms Morrison’s evidence, this split premium structure is common in the industry, and the total costs of the premiums — the initial premium and the deferred contingent premium — typically reaches 40% of the policy limit where the case settles close to trial. While Ms Morrison’s evidence regarding the 40% figure has some weaknesses (to which I return below) there is no doubting that these insurance policies are expensive, and deductions sought for their costs can materially erode the funds available to group members following a settlement. As the High Court has ruled that solicitors’ CFOs cannot be ordered in this Court in Kain v R&B Investments Pty Ltd [2025] HCA 28; (2025) 99 ALJR 1138, it may be anticipated that this Court may, in future, see more settlement approval cases where the proceeding has been run on a “no win, no fee” basis. Whether this is the case remains to be seen, but both this case, and the potential for cases funded in this manner to increase, warrant more careful attention being paid to the cost of ATE insurance policies and whether appropriate steps have been taken to obtain a policy on appropriate terms, and at a competitive rate.

183    The split premium structure renders the ATE insurer a contingent beneficiary of the outcome of the litigation. It is not just a service provider, but becomes a stakeholder in the success of the litigation: the case loses, it pays out on the policy having only received the initial premium; or the case wins and it receives a significantly higher sum for having carried the risk.

184    Where a case is run by a firm of solicitors wishing to defray its risk in relation to adverse costs orders against the indemnified applicant(s) and wishing to claim the cost of the ATE insurance as a disbursement, the firm’s interests lie in minimising the initial outgoing, as that is the sum the firm will have to meet out of pocket. This has obvious cashflow benefits, and means that the downside risk arising from the indemnification of applicants against adverse costs orders is obtained in full for the firm’s benefit, but for the lowest outlay. What incentive does the procurer of ATE insurance then have to ensure that minimising the upfront cost, which is to be borne out of pocket, does not come at the expense of the overall cost of obtaining ATE insurance being higher, which higher costs will be borne by group members as an additional deduction from the gross settlement sum in the event of success?

185    Conversely, but exposing the same point, a procurer of insurance, faced with a choice between a more expensive initial premium (and no, or a less costly, deferred contingent premium) and a lower initial premium (but a higher deferred contingent premium) has little incentive to opt for the former, even if it would ultimately be more economical for the group members who are ultimately to bear the costs when approval is sought for the deduction of the premiums from the settlement sum.

186    There is no indication that this conflict of interest has been recognised or addressed in any way, beyond retaining a broker to obtain the insurance.

187    Ms Morrison deposes that the firm engaged an insurance broker, Marsh McLennan and that “the purpose of engaging insurance broker Marsh McLennan was to review the insurance market and obtain competitive terms”. She also deposes that, in her experience, in both funded and unfunded matters, “ATE insurance premiums are typically structured as a deposit premium paid upfront and a contingent premium paid in the event of a successful resolution”. Ms Morrison goes on to refer to various other matters in which she, and her colleagues, have been involved, and in which ATE insurance has been taken out.

188    To say that a broker was used in placing the insurance is all very well, but if the broker was not at liberty to try and secure a better price, but on a basis less favourable to Slater and Gordon in terms of the initial outlay, the involvement of a broker does not provide much assurance that reasonable efforts have been made to obtain insurance at an economical overall price. In this case, there is no evidence about the ambit of what the broker was instructed to seek out and consider. It is also relevant to note that the ATE insurance taken out in this proceeding, which Ms Morrison says was taken out on the same terms as the insurance in the three CCI cases, was obtained from the same insurer as the insurer in all three of the CCI cases, and through the same broker (the same broker is expressly identified in two of the three CCI cases). The three CCI cases were also commenced relatively close in time to when this proceeding was commenced. That exposes how little is said in the Applicants’ evidence about what was actually done in taking out ATE insurance in respect of this proceeding. It is not clear that a fresh examination of the market was undertaken, as opposed to replicating the arrangement adopted for the CCI cases.

189    Ms Morrison’s evidence is that a total ATE insurance cost in the order of 40% (before tax) of the sum insured if the matter resolves close to trial, is within the range available in the market. The available cases, including those in which Ms Morrison was personally involved, do not support the breadth of the claim made. To start with the CCI cases, which Ms Morrison deposes were insured on the same terms, I note that the ATE premium for which approval was sought was 27.5% of the sum insured including stamp duty. The pre-tax percentage would have been 25%. The premium was the same in each of the three CCI cases, even though they settled at different periods prior to trial. Kemp settled 5–6 weeks before trial, so the gap between the ratio between sum insured and premium in the CCI cases and Ms Morrison’s 40% (pre-tax) ratio, cannot be explained on the basis of late settlement.

190    The only other wholly solicitor-funded case to which the Court was referred is Wisbey. In that case, a judge of this Court (Beach J) approved an ATE insurance premium deduction of $3,047,800 as part of an overall deduction of $33 million. But, as noted above, little is known about the insurance arrangements in that proceeding.

191    In relation to third-party-funded cases, I note that the premium in Krieger was in the order of 50% of the indemnity limit, but in Spotless, another case to which Ms Morrison refers, the maximum total premium was in the order of 31% of the $4 million sum insured ($125,800 being payable as the initial premium (ie 3.145% of the sum insured) and the maximum deferred contingent premium being $1,132,200 (28.305% of the $4 million limit)). Despite that case settling on the eve of trial, the ATE insurer was only contractually entitled to 75% of the deferred premium. Even taking the maximum theoretical combined premium, on Ms Morrison’s calculations, the maximum combined premium was 31.45% of the sum insured (plus tax). I also note that Krieger illustrates that variability in the balance between the initial and deferred premium components, even assuming a split premium payment structure is used.

192    In relation to Ghee, which Ms Morrison refers to, I note that there was a very different balance between the upfront and deferred premium, with the upfront premium being 13.2% of the sum insured, and the deferred premium being 8.8% of the limit, making a total premium of 22%. Fisher (trustee for the Tramik Super Fund Trust) v Vocus Group Limited (No 2) [2020] FCA 579, according to Ms Morrison, involved a premium of 30% of the sum insured.

193    By contrast, Williamson involved a total premium of over 50% of the coverage limit, but a deduction for the full premium was not allowed by the Court. In Williamson, the funder sought ATE insurance costs that equalled approximately 10.3% of the settlement sum, as well as a 26.1% commission, making a total of 36.4%. The Court held that the combined commission and ATE insurance costs to be deducted ought not exceed, in total, 25% of the settlement amount. In Williamson, Black J was also concerned that there had been inadequate disclosure to group members that ATE insurance costs would be deducted separately from, and in addition to, the funder’s commission: at [15], [84].

194    All of which is to say that I do not consider that previous cases concerning ATE insurance establish any clear baseline of 40% (before tax) of the limit of indemnity for cases that settle close to trial. Relatedly, I do not consider that the fairness and reasonableness of the ATE insurance deduction proposed can be established by reference to Ms Morrison’s evidence about other cases.

195    As emerges from the cases concerning ATE insurance deductions, what group members are told about what a commission, or fee uplift rewards, is relevant. In this case, information was provided to Group Members that linked the conduct of the proceeding on a “no win, no fee” basis and the incurring of costs in relation to ATE insurance as justifying the 25% uplift on fees. Information was also provided to group members that positioned the indemnification of the Applicants in respect of adverse costs as arising from the intended CFO. Unlike the three CCI cases, this is not a case where group members would have no reason to think that the ATE insurance and the risks it related to, are divorced from that which justifies the 25% uplift. In addition, and addressed in detail above, it was only at the 11th hour that Slater and Gordon committed to the “no win, no fee” model.

196    In its submissions, Slater and Gordon pointed to the lack of objections to the ATE insurance deduction. That is a relevant point, but does not go very far when there were some objections about the deductions overall. ATE insurance is unlikely to be well understood by Group Members, and the information provided to Group Members was not complete and accurate.

197    These reasons have set out some concerns with the structure of ATE funding arrangements that appear to have become prevalent, but to have become prevalent in a way that may not have involved careful consideration of the interests of group members. These reasons have also addressed a number of (likely) idiosyncratic features of the conduct of this litigation concerning the lack of clarity about the funding model right up until after mediation. I have also explained why I am not satisfied by the evidence adduced that sufficient regard was had to the interests of Group Members when the ATE insurance was obtained in this case.

198    These are all matters of real concern. I would expect future applications for deductions for ATE insurance will pay closer attention to many of these issues. Nevertheless, I do consider that a substantial deduction in respect of ATE insurance is warranted. Slater and Gordon has ultimately funded the case on a “no win, no fee” basis, and indemnified the Applicants in respect of adverse costs orders. It did not over-insure.

199    Slater and Gordon has paid $440,000 out of pocket. That sum should be allowed. Whether a further sum should be allowed as a deduction needs to be considered in light of the aggregate deductions proposed. For its professional fees alone (including the uplift but excluding disbursements), Slater and Gordon seeks an aggregate of $10,126,666.24.

200    I consider that a discount to the balance of the ATE insurance deduction, that would take the total allowed to $880,000, is sufficient to account for the fact that the evidence does not satisfy me that the entire amount should be allowed. That is 50% of the total deduction sought.

201    In the scheme of the total funds being paid over to Slater and Gordon in respect of its professional fees alone — which exceeds $10 million in fee revenue (ie excluding disbursements) — a reduction of $880,000 in the amount allowed for the ATE insurance is a modest reduction. I also take into account that, with this modest reduction, the approved deductions will total $17,199,321.94 (once the $195,000 counterbalancing payment is included), which still leaves the proportion of the settlement sum being absorbed by deductions at the high end of what would ordinarily be regarded as acceptable and proportionate.

202    Having regard to all of these matters, and having regard to the quantum sought be deducted overall, I will approve a total deduction of $880,000 in respect of ATE insurance costs.

OTHER ISSUES

Payments to the Applicants

203    Approval has been sought for the payment of $20,000 to each of the Applicants on account of their time and expenses in acting as lead Applicants for the benefit of the group. As I noted in Ewok, at [93], payments of a similar kind have been approved in many other cases: see, eg, Yasmin v Commonwealth [2023] FCA 1661 at [7] and [85] (Horan J); Ghee at [156]–[157] (Murphy J); Sadie Ville Pty Ltd v Deloitte Touche Tohmatsu (A Firm) (No 7) [2023] FCA 1273 at [51] (Moshinsky J); Bradshaw at [232] (Bromberg J).

204    The payments in respect of which approval is sought were also disclosed to Group Members by the NoPS.

205    I consider that the deductions proposed are fair and reasonable.

Costs to be paid by OnePath arising from the Omitted Group Members

206    The background to the OGM error is outlined at paragraph 11 above. I made the Omitted Group Members Orders on 9 May 2025 providing that the Combined Notice be sent to the cohort of Omitted Group Members. This Combined Notice was sent on 26 May 2025.

207    To allow for Omitted Group Members to register to participate in the proposed settlement, Slater and Gordon, with the assistance of Deloitte, reactivated and reoperated the online registration portal (OGM Registration Process). Reactivation included Deloitte customising the wording of the registration portal for the Omitted Group Members and paying licensing fees for the additional duration to operate the registration portal. Reoperation required Deloitte having to resource the contact centre and having to pay telephone charges and fees to update specific operational tools like the Frequently Asked Questions tool.

208    In administering the OGM Registration Process, both Slater and Gordon and Deloitte incurred additional costs. The Applicants applied for an order that the First Respondent pay these costs as they would not have been incurred had the OGM error not occurred. In making this claim, the Applicants did not press the costs incurred by Slater and Gordon and rather only sought reimbursement of Deloitte’s costs in the amount of $316,145.24.

209    OPC accepted that the OGM error caused some duplication of costs. However, it contended that not all the costs claimed by the Applicants were duplicated. OPC submitted that certain costs would have been incurred in the first stage of Deloitte’s work in any event, had the Omitted Group Members been properly included from the outset. And that these specific costs were therefore not caused by the OGM error. As a result, OPC proposed paying the Applicants $150,000 of costs to cover Deloitte’s extra work.

210    While initially apart, the Applicants and OPC subsequently agreed that OPC would pay an additional $195,000 in respect of the costs occasioned by the OGM error. The Contradictor supported the Applicants’ decision to compromise this costs claim at that level. I consider it a reasonable and sensible compromise.

Appointment of Slater and Gordon as Settlement Administrator

211    Slater and Gordon has acted as provisional settlement administrator pursuant to the Preliminary Orders. In that capacity, the firm has, assisted by Deloitte, distributed the various notices of proposed settlement to Group Members, overseen Group Member registration and prepared preliminary loss calculations. This is not a case in which there are efficiencies to be had by conducting a tender for the settlement administration role, or conducting enquiries with a view to appointing a third-party as settlement administrator. Having run the proceeding, and having undertaken all the work to date (with Deloitte’s assistance) to develop the portal for registration, Slater and Gordon is well-placed to finalise administration of the settlement efficiently.

De minimis threshold, limited payment attempts and surplus funds

212    The average sum that may be received by Registered Group Members is modest — approximately $440 — so it is important that the settlement administration be conducted as efficiently as possible. This also supports the adoption in the Amended SDS of a $10 de minimis threshold in payments that will be made, and provision for a cut-off point of two attempts to make payment.

213    The large size of the cohort of Registered Group Members, together with the relatively modest amounts in question (on average) also support the provision, in the Amended SDS, for a mechanism whereby unclaimed payments (and any surplus funds) will be paid over to OPC, to form part of its “operational risk financial requirement” in accordance with Prudential Standard SPS 114 — Operational Risk Financial Requirement.

Late registration by some Group Members

214    The Applicants seek orders pursuant to ss 33V and/or 33F of the Act that 43 people be deemed to have registered, despite them not having registered by the Court-ordered registration date. The Applicants identified this cohort of intending late registrants through objections that were filed.

215    In the context of a group of Registered Group Members that already exceeds 76,000 members, the addition of 43 individuals is unlikely to have any significant impact on the return to Group Members who did register by the deadline, notwithstanding that counsel for the Applicants stated that nothing was known about the potential claim size of the late registrants. Nor were any submissions made about the circumstances of the 43 individuals who did not register by the deadline.

216    In many circumstances, a court will require an application to be made where late registration is sought, and will examine the circumstances explaining the failure to register by the deadline: see, eg, Bopping v Monash IVF Pty Ltd (No 2) [2025] VSC 8 at [11]ff (Watson J), referring to Andrianakis v Uber Technologies Inc [2024] VSC 733 at [61]–[63] (Matthews J); Money Max Int Pty Limited (Trustee) v QBE Insurance Group Limited [2018] FCA 1030; (2018) 129 ACSR 1 at [21]ff (Murphy J). However, where the number of individuals is very low relative to the group size, and the average sum to be received by Registered Group Members is modest, adopting a process by which the circumstances of each of these individuals were to be examined would impose a disproportionate cost. Given these matters, and the fact that it is highly unlikely that the inclusion of these individuals will dilute the return to Group Members who registered by the deadline, I consider it appropriate to make the order sought.

CONCLUSION

217    I will make orders generally in accordance with the orders proposed by the Applicants, but limiting the approved deduction in respect of the ATE insurance to $880,000.

Associate:

Dated:    20 March 2026

Annexure

    Annexure A Confidentiality

    Material that is to remain confidential and is not to be published or made available to any person other than the Court, the Applicants and their legal representatives and the Contradictor until further order

    Annexure B     Confidentiality

    Material that is to remain confidential and is not to be published or made available to any person other than the Court, the Applicants and their legal representatives, the Contradictor and the Respondents and their legal representatives until further order