City of Swan v McGraw-Hill Companies, Inc [2016] FCA 343

City of Swan v McGraw-Hill Companies, Inc [2016] FCA 343

The settlement was approved because, having regard to the complexity of the proceeding, the remaining liability, damages and appeal risks, the likely costs and delay if the matter proceeded to trial, the confidential counsel opinions, the settlement sum, the potential further dividends in the Lehman Brothers Australia winding up, the reasonableness of the legal costs, the orthodox and uncontroversial distribution scheme, and most significantly the fully informed absence of objection or opt-out by any group member in a closed-class proceeding, the settlement was fair and reasonable and in the interests of group members as a whole.

Jurisdiction
Australia
Judgment Date
12 April 2016
Procedural Posture
Representative Proceeding Under Part IVA of the Federal Court of Australia Act 1976 (cth) Concerning Alleged Misleading and Deceptive Conduct and Negligence in Credit Ratings of Synthetic Collateralised Debt Obligations / Application for Approval of Proposed Settlement Pursuant to S 33 V of the Federal Court of Australia Act 1976 (cth)
Outcome
Settlement approved; principal proceedings ordered to be dismissed with no order as to costs, with dismissal and vacation of prior costs orders to take effect immediately after the Effective Date defined in the Settlement Deed.
Legal Topics
['approval of Class Action Settlement' 'closed Class Representative Proceeding' 'misleading and Deceptive Conduct' 'credit Ratings for Synthetic Collateralised Debt Obligations' 'settlement Distribution Scheme' 'litigation Funding' 'suppression and Confidentiality Orders' 'legal Costs in Representative Proceedings']
['corporations' 'representative Proceedings' 'financial Services' 'class Actions' 'settlement Approval'] ['approval of Class Action Settlement' 'closed Class Representative Proceeding' 'misleading and Deceptive Conduct' 'credit Ratings for Synthetic Collateralised Debt Obligations' 'settlement Distribution Scheme' 'litigation Funding' 'suppression and Confidentiality Orders' 'legal Costs in Representative Proceedings']

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Procedural Posture

Representative Proceeding Under Part IVA of the Federal Court of Australia Act 1976 (cth) Concerning Alleged Misleading and Deceptive Conduct and Negligence in Credit Ratings of Synthetic Collateralised Debt Obligations / Application for Approval of Proposed Settlement Pursuant to S 33 V of the Federal Court of Australia Act 1976 (cth)

Legal Issues

  1. 1 ['Whether the proposed settlement should be approved under s 33V of the Federal Court of Australia Act 1976 (Cth).' 'Whether the proposed settlement was fair and reasonable and in the interests of group members considered as a whole.' 'Whether the settlement distribution scheme, including deductions for litigation funding and legal costs, was appropriate.' 'Whether confidentiality and suppression orders should be made in respect of settlement-related material.']

Ratio Decidendi

The settlement was approved because, having regard to the complexity of the proceeding, the remaining liability, damages and appeal risks, the likely costs and delay if the matter proceeded to trial, the confidential counsel opinions, the settlement sum, the potential further dividends in the Lehman Brothers Australia winding up, the reasonableness of the legal costs, the orthodox and uncontroversial distribution scheme, and most significantly the fully informed absence of objection or opt-out by any group member in a closed-class proceeding, the settlement was fair and reasonable and in the interests of group members as a whole.

Court Disposition

Settlement approved; principal proceedings ordered to be dismissed with no order as to costs, with dismissal and vacation of prior costs orders to take effect immediately after the Effective Date defined in the Settlement Deed.

Orders

  • ['Pursuant to ss 33V and 33ZF of the Federal Court of Australia Act 1976 (Cth), the proposed settlement and dismissal of the proceeding on the basis of no order as to costs and otherwise upon the terms of the Settlement Deed and Settlement Distribution Scheme was approved.' 'Pursuant to s 33ZF of the Act, the...