Wine chief a whine chief on shareholder actions, lawyers say
Maurice Blackburn has dismissed the chief of Treasury Wine Estates' criticism about shareholder class actions as a "glass-jaw reaction".
Treasury Wine chief executive Warwick Every-Burns told BusinessDay last week litigation funds and their law-firm partners were usurping the role of regulatory authorities in their pursuit of boards, while companies could shy away from growth plans for fear of being slapped with a shareholder class action lawsuit.
But law firm Maurice Blackburn managing principal Ben Slade said Mr Every-Burns had missed the point.
"If directors and corporations fulfil their proper duties and comply with the Corporations Act they will have nothing to fear from a robust class actions regime," Mr Slade said.
He said class actions accounted for 0.1 per cent of all litigation in Australia. About 14 class actions started on average each year, with about half being supported by litigation funders.
"There is strong anecdotal evidence that business practices are becoming more rigorous and ultimately benefiting shareholders and institutional investors alike because companies know they can be held to account via class actions," he said.
"This has become blatantly evident ... with the glass-jaw reaction from Treasury Wines Estate chief executive Warwick Every-Burns."
Treasury Wine is the target of two legal actions flowing from its damaging $160 million write-down in July of wine inventories in the US. Litigation funder IMF and Maurice Blackburn are representing aggrieved shareholders for a potential $100 million class action, while a separate lawsuit is being pursued by former Minter Ellison partner Mark Elliott.
"On its face, it looks pretty bad. ASIC will not get money back for those superannuants who have lost so much, so it's left to them to take private action," Mr Slade said.
"Big business affects many people. Those that fail to do the right thing should be held to account. They should compensate their victims. ASIC is able to force compliance only too rarely.
"The class action mechanism helps victims to make that happen; otherwise thousands of people would not be able to stand up to corporate wrongdoing."
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