The initial trial of the Woolworths Class Action was scheduled to commence on 2 February 2021. Shortly prior to that date, the parties agreed to a proposed settlement of the Woolworths Class Action under which Woolworths will, without admission of liability, pay $44.5 million inclusive of interest and costs (Settlement Sum) in full and final settlement of the claims of the Applicants and Group Members.

The proposed settlement does not come into effect unless it is approved by the Federal Court. If the proposed settlement is approved by the Court, there are likely to be some substantial deductions from the Settlement Sum before distribution of any monies to eligible Group Members:

• Legal costs and disbursements: Maurice Blackburn will seek payment of the reasonable legal costs incurred in conducting the Woolworths Class Action, estimated at approximately $13.6 million up to 31 January 2021 (and, as indicated above, so that they are shared on an equitable basis by all Group Members). It will be a matter for the Court to determine the amount of legal costs which it considers is fair and reasonable, and which may therefore be deducted from the Settlement Sum.
• Litigation funding charges: The costs and adverse costs risks of the Woolworths Class Action (including the provision of security for costs in the amount of $2.5 million) have been funded by ILFP pursuant to various Funding Agreements between ILFP and the Applicants and between ILFP and some of the Group Members. The Applicants will seek Court approval for a payment of approximately $7.42 million to ILFP (representing approximately one-sixth (or 16.67%) of the Settlement Sum) in return for its funding of the Woolworths Class Action. Again, it will be a matter for the Court to determine the amount of litigation funding charges which are reasonable in the circumstances of the case, and which may therefore be deducted from the Settlement Sum.
• Applicants’ reimbursement payment: The Applicants will seek payment of an amount of up to $40,000 for the time, inconvenience and expense incurred by them in conducting the Woolworths Class Action on behalf of, and for the mutual benefit of, all Group Members, to be deducted from the Settlement Sum. Again, any such payment is subject to approval by the Court.

If the Court approves the proposed deductions from the Settlement Sum referred to above, there will be approximately $23.44 million available for distribution to Group Members (plus any interest accrued on the Settlement Sum, less any further legal costs incurred in obtaining Court approval of the proposed settlement and distributing the Settlement Sum to Group Members (with all such further costs likewise being subject to the Court’s approval)).

At the present time, it is not possible to estimate how much (if any) each registered Group Member will receive by way of a distribution from the proposed settlement, because that will depend on a number of factors including:

• the amount of the payments to Maurice Blackburn and ILFP on account of legal and funding costs which the Court approves as fair and reasonable;
• the number of Group Members who ultimately register to participate in the proposed settlement before the Court-imposed deadline; and
• the time(s) at which, and the price(s) for which, each registered Group Member acquired and sold their Woolworths Shares during the Relevant Period.

The amount of the Settlement Sum which is ultimately available for distribution to registered Group Members will be distributed in accordance with a Settlement Distribution Scheme to be approved by the Court (Scheme), including a proposed Loss Assessment Formula (LAF) (which details how each Group Member’s entitlement to a share of the Settlement Sum will be calculated). A copy of the Applicants’ proposed Scheme (excluding the confidential LAF) can be downloaded from this page (under the heading ‘Relevant documents’ below), or by contacting Maurice Blackburn, whose contact details are set out below. If you wish to obtain a copy of the confidential LAF, you may do so by requesting a copy from Maurice Blackburn and by signing and returning to Maurice Blackburn a confidentiality undertaking.

In addition, the settlement deed also provides for all Group Members to release and discharge Woolworths and its related parties (which includes Woolworths’ current and former directors and officers) from:

1. each and every claim made by or on behalf of the Applicants or any Group Member in the Woolworths Class Action, including each of the claims articulated in the Applicants’ Further Amended Originating Application and/or Further Amended Statement of Claim; and
2. any and all claims arising from, in connection with, in respect of or related to:

a) any matter which is or ever has been the subject of the Woolworths Class Action, including any matter specified in the Applicants’ original Statement of Claim or Amended Statement of Claim filed in the Woolworths Class Action; and

b) the Woolworths Class Action itself, including the administration of the Scheme and the costs of, and incidental to, the Woolworths Class Action.

Thus, if the proposed settlement is approved by the Court, Group Members (whether they register to participate in the settlement or not) will be bound by the settlement, and will not be permitted to make any subsequent claim against Woolworths in relation to the above matters.