In a statement on the ASX on Thursday, E&P Financial Group Limited announced that the Federal Court of Australia has approved the settlement of the class action filed by Shine Lawyers in December 2021 against Dixon Advisory & Superannuation Services Pty Ltd (DASS), E&P, Alan Dixon and Christopher Brown.
The settlement, as announced in November 2023, is $16 million. E&P said a provision of $4 million has “previously been recognised in relation to the mechanism for settlement as contemplated in the Deed of Company Arrangement for DASS”, and was reflected in E&P’s financial report for the half year ended 31 December 2023.
“The balance of the settlement amount is comprised of remaining available insurance proceeds,” E&P said.
“Consequently, the Shine Proceeding will be dismissed against E&P, Mr Alan Dixon and Mr Christopher Brown, and permanently stayed against DASS, without admission of any liability (subject to any appeal).
“The representative proceeding filed by Piper Alderman in the Federal Court of Australia in November 2021 will also be dismissed against E&P and Mr Alan Dixon, and permanently stayed against DASS (subject to any appeal).”
On 3 April, the Federal Court pushed back a decision on the class action settlement for two weeks to “allow the applicant to provide further information to the court”.
The group did not provide further detail on exactly what kind of information the court is seeking.
In November 2023, the class action, which alleged DASS financial advisers gave unsuitable advice and failed to address conflicts of interest, was settled for $16 million.
At the time, Shine Lawyers, representing the class action, said a conditional settlement had been reached between E&P Financial Group and the estimated 4,000 customers allegedly affected by the conduct.
The settlement was reached without admission of liability.
The class action alleged E&P advisers, working under DASS – which went into liquidation in January 2022 – gave unsuitable advice that did not reflect their clients’ needs or their financial circumstances.
It was also alleged the advice was not in the clients’ best interests and, when there was a conflict, it was not adequately addressed.
The affected clients will retain the ability to claim with AFCA or Compensation Scheme of Last Resort (CSLR).
“We are pleased to have been able to reach a conclusion in this class action for group members subject to the court’s approval, and that group members will retain their rights to bring a claim against DASS, pursuant to the financial compensation scheme of last resort,” Shine Lawyers’ head of class actions, Vicky Antzoulatos, said at the time.
In September 2022, the Federal Court imposed a $7.2 million penalty on Dixon Advisory over its investment advice.
The court found that on 53 occasions between October 2015 and May 2019, Dixon Advisory was the responsible licensee of six representatives who did not act in the best interests of eight clients when they advised these clients to acquire, roll over or retain interests in the US Masters Residential Property Fund (URF) and URF-related products.
Representatives of Dixon Advisory were also found to have failed to conduct a “reasonable investigation” of the clients’ circumstances before providing advice.
Where can we report all the innaprorite smsf that accountants set up, where there is actually some detriment to the accountant?