Sunita Somvanshi
Slater and Gordon law firm announced an in-principle $249 million settlement reached between the firm, Commonwealth Bank of Australia, Colonial First State (CFSL), and Avanteos. The settlement addresses allegations that retirement fund members’ cash balances were retained in lower-yielding CBA deposits rather than being placed in competitive third-party investment options, along with alleged conflicts, trustee conduct, low interest rates and undisclosed payments. More than 500,000 Australians could potentially be eligible to receive compensation, subject to Federal Court approval.
The settlement is in-principle only, a legal term meaning the parties have reached agreement in concept, but the deal is not final. Federal Court approval is required before any payments are distributed.
A critical element of the settlement is the phrase “without an admission of liability.” The settlement was reached without an admission of liability. This means that CBA and other defendants are not officially admitting wrongdoing, even though they have agreed to pay the settlement amount.
The settlement covers members of FirstChoice and FirstWrap products spanning November 2008 through September 2021. Slater and Gordon will identify members from historical records and process eligible claims. Most group members are expected not to need to take active steps, but the final distribution arrangements will depend on Federal Court approval and the scheme ultimately approved by the Court.
Eligibility will be determined through the court-approved scheme, which will establish how eligible members are identified and how entitlements are calculated. Slater and Gordon will provide detailed criteria as the Federal Court process advances.
Federal Court approval remains the critical next step. The judge must review the settlement terms and determine they are fair to affected members.
Once Federal Court approval is granted, communications will explain any steps members may need to take. Eligible members will have a defined window to submit claims if they are not automatically credited. For members who held FirstChoice or FirstWrap accounts during the alleged period, monitoring official statements from Slater and Gordon or CBA is essential.
