Conflict of Interest Disclosure Document

Volkswagen and Audi emission affected vehicles class action

1. General
(a) Grosvenor Litigation Services Pty Ltd (GLS) is a provider of litigation funding services in Australia. It funds the legal costs associated with selected claims and proceedings pursuant to funding agreements with participating members, with the purpose of achieving mutually beneficial outcomes.
(b) GLS seeks to fund some of the costs of (some of) the members (Member/s, You) in a proposed class action against Volkswagen and Audi, which is aimed to recover the damages incurred by the Members as a result of their purchase of vehicles which failed to comply with vehicle emission and pollution regulations in Australia (the Action). In order to receive funding, Members must enter into a funding agreement with GLS in relation to the Action (Funding Agreement).
(c) GLS has appointed Bannister Law (Lawyers) to act in the Action for Members who sign the Funding Agreement. Each Member will be required also to enter into a retainer agreement with the Lawyers in relation to the Action.
(d) The purpose of this document is to provide You with information to assist you to understand the different interests of GLS, the Members and the Lawyers in the Action, specific situations where conflicts may arise and how disputes may be resolved. GLS will notify the Members if it becomes aware of any conflict of interest that may arise during the course of the Action.

2. The Funding Agreement and the parties benefits under it
(a) A copy of the Funding Agreement can be viewed and downloaded here.
(b) Terms defined in the Funding Agreement and used in this document will have the meaning given to them in the Funding Agreement. Any reference to the Funding Agreement in this document is for general information purpose only and the provisions of the Funding Agreement will prevail if there is any inconsistency with this document.
(c) You should carefully read the Funding Agreement in full and seek professional legal or other advice if necessary to properly understand its meaning and effect. If you wish, you are entitled to withdraw from the Funding Agreement within three business days of signing it (the Cooling Off Period).
(d) Under the Funding Agreement, GLS agrees during the term of the Funding Agreement to:
(i) Pay 40% of the Lawyers’ fees per month and 100% of the fees of counsel retained by the Lawyers with GLS’s approval, up to a cap amount contained in the Lawyers budget; the remaining 60% will be paid if there is a successful resolution of the Action and GLS’s share of the aggregate amounts received by the Members in relation to the Action (the Net Proceeds) is sufficient to meet this amount. The total fees payable will not exceed the Net Proceeds (which are defined as the aggregate amounts received by the Member/s from or on behalf of the Respondent/s in relation to the Action exclusive of GST and whether in terms of a court judgment, a settlement or otherwise after deducting all and any expenses of any nature whatsoever incurred in relation to the Action);
(ii) Indemnify the Members in respect of the Lawyer’s fees and disbursements (including counsel fees incurred with GLS’s approval) under the retainer agreement concluded between You and the Lawyers (Retainer Agreement); and
(iii) Indemnify the Members in respect of costs orders issued by a court in relation to Action costs incurred during the term of the Funding Agreement.
(e) In consideration for the funding, the Members agree that GLS will be paid out of the Net Proceeds an indemnity fee equal to 25% of the Members’ share of the Net Proceeds in Stage 1 from the date of the Funding Agreement until 31 December 2017) and 30% of the Members’ share of the Net Proceeds in Stage 2 (from 31 December 2018 until the Action is finalised) (Indemnity Fee).
(f) In consideration for GLS providing funding for Stage 1 (and the above indemnities), the Member also grants GLS an option to fund Stage 2 of the Action.

3. Members obligations
(a) As set out in this document, GLS’s funding obligations are not unlimited, and are qualified by and conditional on certain matters, including for example the funding cap per the Lawyers’ budget, the receipt of a sufficient portion of the Net Proceeds to fund the remaining 60% of the Lawyers’ fees, and the Funding Agreement being in force and not terminated.
(b) The Members have various obligations in relation to the conduct of the Action, including, to:
(i) provide all information and assistance reasonably requested by GLS;
(ii) follow all reasonable advice given by the Lawyers;
(iii) not without GLS’ prior written consent, discontinue, abandon, withdraw from, settle or reject a settlement of the Action; and
(iv) not opt out of the Action.

(c) Notwithstanding the above, GLS does not have unilateral control over or the power to make a determination in relation to the conduct of the Action (except in relation to settlement).
(d) Any breach by the member of its obligations that is not rectified within 7 days of notice may result in the termination of the Funding Agreement.

4. Relationships between GLS, Members and Lawyers
(a) As a litigation funder, GLS chooses which litigation proceedings to fund and on what terms. In addition to funding the Action, GLS may fund other claims and proceedings.
(b) The Members enter into the Funding Agreement with GLS and also enter into the Retainer Agreement with the Lawyers. GLS has not separately entered into an agreement with the Lawyers, but has agreed under the Funding Agreement to pay the Lawyers on behalf of the Members as specified in clause 2 above. Accordingly, You remain liable under the Retainer Agreement to pay to the Lawyers any amount payable under the Retainer Agreement that is not payable by GLS under the Funding Agreement.
(c) The Members have agreed that the Lawyers will hold the Net Proceeds on trust for the Members and GLS and distribute them in accordance with the Funding Agreement.
(d) Whilst GLS’s decisions in relation to the Action will be based on its own funding interests, the Lawyers act on behalf of their Member clients in conducting the Action. The Members have certain obligations in relation to the conduct of the Action under the Funding Agreement, as specified in clause 3 above.

5. Action Settlement
(a) Under the Funding Agreement the Member authorises the Representative Applicant to make any decisions in relation to settlement of the Action. The Representative Applicant may not make any decision unless the Lawyers advise it is reasonable.
(b) Note that if GLS disagrees with a settlement decision, it may appoint a senior counsel to determine whether the settlement is reasonable and should be accepted. The counsel’s determination will be binding both on the Member and GLS.
(c) Each of the Members and/or GLS may have different views in relation to a settlement offer, even though both are likely to be interested in minimising the legal costs associated with the Action and maximising the amounts payable under it.

For example, GLS may prefer an early settlement or a settlement on specific terms, while some members may prefer for the Action to continue in order to achieve a certain monetary or non-monetary outcome, and vice versa.

(d) In any event, ultimate settlement of a class action can only occur with the court’s approval. The court must be satisfied that the settlement is in the interests of all Members.

6. Termination of the Funding Agreement
(a) A Member may terminate the Funding Agreement if GLS fails to make payments due within 30 days of being requested in writing to do so.
(b) GLS may terminate the Funding Agreement if:
(i) a Member breaches the Funding Agreement and fails to rectify the breach within 7 days of written notice to do so;
(ii) by giving a Member 7 days’ notice in writing of its intention to terminate; or
(iii) within 7 days of a Material Adverse Change which at GLS’ sole discretion renders uneconomic the continuing prosecution or the merits of continuing the Action or (in its opinion) its prospects of success materially change.
(c) GLS will not fund any costs incurred after termination of the Funding Agreement.
(d) After termination of the Funding Agreement GLS will continue to be entitled to receive out of any Net Proceeds received by a Member a sum equal to the Member’s share of four times the total amount advanced by GLS up to the date of termination.

7. Dispute resolution
(a) In the event of any dispute between GLS, the Members or the Lawyers in relation to any matter arising out of or in connection with the Funding Agreement, in particular as to the level of costs, progress with the prosecution of the Action or its settlement, the dispute will be referred to an independent third party agreed to by the parties to the dispute and if none is agreed – by a person nominated by the President of the Law Society of New South Wales.
(b) The parties to the dispute shall in the first instance use reasonable endeavors to resolve the dispute.