Law firm Corrs Chambers Westgarth is following in the footsteps of Squire Patton Boggs, with both now challenging a ruling that halted their shareholder class actions against logistics startup GetSwift.
Corrs filed an application on Wednesday in the Federal Court, seeking leave to appeal Justice Michael Lee’s decision to pick Melbourne-based boutique Phi Finney McDonald to lead a single action against GetSwift.
A spokesperson for Corrs did not immediately return requests Thursday to detail their appeal arguments.
Squire Patton Boggs, whose case was stayed alongside the action filed by Corrs, sought leave to appeal last week. The firm said it was challenging the Federal Court’s power to choose one representative proceeding over others.
Judge Lee handed down his ruling on May 23, choosing PFM’s case on the grounds that its funding arrangement was “clearly preferable” to the other two.
Squire Patton Boggs says Judge Lee erred in concluding that the continuation of more than one open class representative proceeding would unnecessarily increase costs to group members.
The firm said the decision to permanently stay its case “involved errors in the exercise of discretion” and was handed down “in the context of a multiplicity of proceedings being commenced in the shareholder class action space”.
It also came just before the May 31 release of the Australian Law Reform Commission’s discussion paper, which recommended that judges choose one among competing class actions.
Squire Pattong Boggs said PFM had not filed a statement of claim when its case was selected, and that its pending claim would be “similar” to its own.
“Squire Patton Boggs has been working in this extremely complex and difficult area of class action litigation for a number of years,” said firm partner Amanda Banton. “We have developed a very competitive funding package based on years of experience and familiarity with how these disputes play out.”
GetSwift, and its managing director, Joel Macdonald, are alleged to have breached their continuous disclosure obligations and misled shareholders with overhyped announcements about business contracts.
PFM, founded by three former Slater & Gordon lawyers, is partnering with litigation funder Therium Australia in bringing its action.
The proposed funding model would entitle Therium to the lesser of a multiple of expenses the funder had paid during the proceeding (either 2.2 times if settlement was reached on or before April 12, 2019 and 2.8 times after that date) or 20% of the net litigation proceeds.
In comparison, the Squire Patton Boggs class action proposed paying International Litigation Partners the lesser of 25% of net proceeds or 22.5% of gross proceeds; while Corrs Chambers Westgarth had proposed a flat commission to backer Vannin Capital of 10% if proceeds were received by the end of the year, 20% if received before September 26, 2019, or 30% if received after that date.
Judge Lee described PFM’s proposed funding model as superior because it aligned the funder’s reward with their increased risks as legal costs rose. The mechanism also prevented windfalls by capping the commissions earned, he said.
GetSwift is represented by Quinn Emanuel.
The PFM case is Raffaelle Webb v GetSwift & Anor.
The Corrs case is Samantha McTaggart & Anor. v GetSwift Limited.
The Squire Patton Boggs case is Dwayne Perrera v GetSwift & Anor.
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