IMPORTANT NOTE TO CLASS ACTION GROUP MEMBERS 

The comments below endeavour to answer the most common questions asked by shareholders in a class action (shareholders). The answers given below are therefore in very general terms. The answers are not given by way of, or in substitution for, legal, financial or any other sort of advice. They are not tailored in any way to any individual circumstances. If you need legal, financial or other advice, it is strongly recommend that you speak to your solicitor, accountant or financial adviser.

What is a group proceeding and is it the same as a class action?

Class actions and group proceedings are really the same thing.  They are different ways of describing legal proceedings whereby one or a small number of representative plaintiffs can take legal action on behalf of all persons who have similar claims.  The WorleyParsons class action is a good example of such proceedings.  Many shareholders in WorleyParsons (the shareholders) have essentially the same claims against WorleyParsons.  The only difference between them is the amounts they have lost.

Can I opt out?

Yes.  A member of a class action can opt out of the class action at any time.  You will be notified in due course of a more formal opt out procedure and documents will be sent to you to enable you to opt out, if you wish to do so. You are urged to think very carefully and to take independent legal advice before you decide to opt out.

Why would I opt out?

The only reason to opt out of a class action is if you consider either that you have no basis for any claim against any of the defendants, or alternatively, if you consider that you have a different sort of claim against the defendants and you would prefer to pursue that claim by yourself, paying for the costs of your claim and assuming the risk of adverse costs orders in the event that you lost your claim. It is strongly recommend that you do not opt out of any class action before you have taken legal advice from an expert.

Could I be liable for costs?

No.  Represented class members cannot be made liable for the costs of a class action.  Only the named plaintiff can be liable for adverse costs orders.  If the case is successful, the legal costs incurred in running the case will be recovered from the amount paid by the defendants. No member of the represented class will be asked to pay anything by way of legal costs out of their own pocket.

What will I get if we win?

If the case is successful (whether by court judgment or settlement), there will be an amount of money to be paid by WorleyParsons.  It is not possible at this stage to estimate how much the amount of money may be.  In due course, when the likely amount is better known, further information about what amount might ultimately be recovered will be provided to you. The amount recovered (less the costs of running the case and any fee payable to a litigation funder, which is typically 30-40% of the settlement proceeds/judgement amount) will be shared pro-rata between all the members of the WorleyParsons class. In other words, all members of each class will likely receive the same number of cents in every dollar they have lost in the collapse of WorleyParsons.

How long will the case take?

How long the case will take depends upon a number of variable factors which are presently unknown. It is currently estimated that the case will take at least 18-24 months to conclude.  If the case goes to a fully contested court hearing at trial, it might be a further 2 years before a judgment is delivered.  There is then the possibility of an appeal, which might extend the time for resolution of the case to as much as 3 or 4 years.

Is the case likely to go all the way to Court or to settle earlier?

The overwhelming majority of cases that are issued in the Supreme Court of Victoria (and in every other court) do not go to trial or judgment, but settle earlier.  However, this case is unlikely to settle before judgment .  There is a strong probability that this case will go to a contested trial and to a judgment and the case is being prepared by the legal team on that assumption.

What will the plaintiff’s legal fees be and who will pay them?

If the case is successful, then the professional costs of the proceeding (solicitors’ costs, barristers’ fees and the costs of expert witnesses, etc.) will be recovered from the total amount which is recovered from the defendants by judgment or settlement.

Will there be a litigation funder involved in the case and what will their fee be?

Joanne Walsh, in her capacity as representative plaintiff and following receipt of independent legal advice, has entered into a Litigation Funding Agreement with BSL Litigation Partners Limited (“BSLLP”).  The indemnity previously provided by Melbourne City Investments Pty Ltd (MCI) in respect of the costs of the group proceeding has been revoked.

The Litigation Funding Agreement contemplates among other things that, subject to Court approval, the litigation funder will be entitled to the recovery of the legal costs and disbursements which it has funded plus a success fee of a maximum 30% out of the net settlement or judgement proceeds, if the class action is successful. If the class action is unsuccessful then the litigation funder will not be entitled to recover any money it has expended on the case.

The litigation funder now pays for all legal costs plus disbursements (such as Counsels’ fees and witness expenses) and will pay any amounts which are ordered against Joanne Walsh by way of security for or payment of costs. Only Joanne Walsh can be made liable to pay or give security for costs, not any other member of the Worley Class Action group.

How can class members be sure that  legal fees are reasonable?

The legal fees that are charged (including all disbursements paid to barristers, witnesses etc.) are subject to a process known as taxation which is undertaken by an Associate Justice of the Supreme Court of Victoria whose job it is to ensure that the fees charged are reasonable and proper.

Who is the plaintiff suing?

The plaintiff is suing WorleyParsons Limited (the company in which you own/owned shares).

Why is the plaintiff suing WorleyParsons?

The case alleges a failure by WorleyParsons to fully and properly disclose to ASX in a timely manner that it would have significantly reduced earnings, reduced professional services revenue and be required to implement a rigorous cost reduction program across the entire group which would include significant restructure costs.

What 3 things make the plaintiff confident of winning?

  1. WorleyParsons made three announcements predicting increased earnings in FY2014:  on 14 August, 9 October and 15 October 2013.
  2. On 20 November 2013, without any warning, WorleyParsons announced an expected significant decline in 2014 earnings.
  3. The market was shocked and wrote down the market capitalisation of WorleyParsons by more than $1 billion on that day.  Its share price has not recovered since.

How much is the plaintiff claiming?

The plaintiff is claiming all of the losses which will have been suffered by all affected shareholders.  The losses will be the subject of expert evidence at the trial and will represent some part of the $1 billion of losses in WorleyParson’s market capitalisation post-announcement. The best estimate at this stage of our investigations is that the claim is for in excess of $300M

How much of these losses do you think the plaintiff will recover if she wins?

It is not possible to estimate how much will be recovered in the class action at the moment. Updates will be periodically provided to class members as and when they are available.

Will the plaintiff be writing to me personally?

No.  The plaintiff is presently unable to write to you as she does not have access to the shareholder register of WorleyParsons.

Who should I go to for legal or financial advice?

You should speak to your solicitor or financial adviser for any particular legal, accounting or financial advice you may need.

Further questions and their answers will be posted on this page as the class action progresses.