More than 500,000 Australians could receive a share of a $249 million class action settlement involving Commonwealth Bank and two of its fund management subsidiaries. The settlement, brought by law firm Slater and Gordon, resolves allegations that the companies prioritized their own profits over the interests of superannuation fund members.
The class action focused on dealings between Commonwealth Bank, Colonial First State Investments, and Avanteos Investments between 2008 and 2021. The lawsuit alleged that members were paid low interest rates on their savings, suggesting the companies placed their financial gains ahead of their duty to safeguard retirement accounts.
Slater and Gordon announced on Monday that the case had been settled for $249 million. However, the companies involved have not admitted any liability or wrongdoing as part of the agreement, which still requires approval from the Federal Court of Australia.
Individuals eligible for a portion of the settlement will have the payment automatically deposited into their superannuation accounts. Lead applicant Wendy Gibson, who has held superannuation and term deposits with Colonial First State since 2005, expressed surprise at the alleged conduct and satisfaction with the case's conclusion.
Another lead applicant, Peter Currie, stated his hope that the banking institutions have learned from this situation and will operate more honestly in the future. He also expressed hope that the group members will be pleased with the outcome.
Commonwealth Bank and Colonial First State confirmed the in-principle settlement in a statement to the ASX last week. The bank had reportedly already accounted for this payout in a prior financial period.
Slater and Gordon's class actions lead, Nathan Rapoport, suggested the settlement would provide a significant boost to many members' retirement savings. He emphasized that when superannuation trustees fail to secure optimal interest rates on cash and deposit investments, members can lose substantial amounts by retirement, as small differences compound over time.
Rapoport also indicated that the settlement serves as a cautionary reminder to financial firms, particularly in light of the lessons from the Banking Royal Commission. The class action was financially supported by litigation funder Augusta Ventures Limited.
