The Sydney law firm Levitt Robinson was one of several opportunistic groups to attempt a class action against the old Aveo, back in September 2017, ten weeks after the Four Corners “Bleed them dry before they die” TV program centred principally on Aveo.
The lawyers claimed the new contract launched in 2015 titled “The Aveo Way”, which simplified contract terms, was not in the resident’s favour, despite many thousands of new residents accepting the contract.
They took out ads in press, radio and social media, offering Aveo residents the opportunity to share in any financial wins of a class action against Aveo. Five years later and the lawyers on both sides are still battling it out and making big fees.
Levitt Robinson early on got New York litigation funder Galactic to put up risk funding of its action with the promise that Galactic would receive 25% of any winnings.
But their confidence (and Galactic’s) of a win must have been shaken, because they have taken the extraordinary step of wanting the Aveo residents who are still in an Aveo home under an original Aveo Way contract to commit to paying a share of the 25% win fee to Galactic.
The courts are saying he has to give Aveo 72 hours’ notice of his arrival.
Levitt is suggesting residents take a lien over their village homes to make sure Galactic and Levitt Robinson get their cash as a priority when the resident dies or goes into aged care.
There are 4,000 contracts and residents that this complex concept has to be explained to.
Imagine the distress and disharmony within a village that this can create. They arrive on site, talk about concepts residents don’t understand, and then ask those residents to sign over control of their homes – all the while in effect saying that Aveo duped them into signing a bad contract.
Demonstrating the confusion, the courts have heard that 42 residents have signed paperwork to say they don’t want to be involved (they have opted out of the class action), when they did not even have an Aveo Way contract.
The courts did appoint a barrister, Meg O’Sullivan SC, to represent the 4,000 – and her advice was clear: “I would advise them not to have anything to do with the proceedings”, saying “the risks are so far on the extreme”.
The risks are one thing, but the confusion and fear amongst residents and their family are another. We would say they are cruel to inflict this complex “demand” on late-aged residents.
Remember too, this class action wasn’t created by disaffected or damaged residents. It was conceived by lawyers who saw an opportunity to make big fees and cash from what was then a public company, whose mum and dad shareholders would have had to pay.
If Aveo does lose, it will be the mum and dad investors in Brookfield funds who will pay.
None of this is laudable.