Change begets change
Customer needs evolve. Our industries change. Markets change. Regulator and consumer expectations rise.
Like every business, at McGing we need to keep on our toes, anticipating, recognising and responding to meet those changes. All the while continuously striving to improve the direct relevance, quality and speed of delivering those services.
McGing expert evidence diversification opportunity
As any investment advisor will tell you, the one free lunch in Investments is diversification! Another good investment principle is to recognise and grab an opportunity when it presents itself.
In 2019, via a referral from one of our wealth management clients, we received a call out of the blue, from a barrister on behalf of a Court appointed Contradictor, in the Banksia Securities class action remitter trial (Bolitho v Banksia Securities Ltd (No 18) (remitter) [2021] VSC 666). This led to us being engaged as an Independent Expert Witness to provide a report advising on what would be a reasonable return to a litigation funder in this case. Drawing on our extensive experience in investment and insurance, we developed a principles-based methodology applicable to the question at hand. We applied this approach to the facts as known at the time and produced a report setting out our methodology and findings.
After my public appearance in court in August 2020, McGing was asked to make a submission to the Parliamentary Joint Committee on Corporations and Financial Services’ Inquiry into Litigation Funding. We did so, setting out the Principles for a Reasonable Return for Funding Litigation in Class Actions.[1]
Continuing the journey
The work was very satisfying as it applied so many of our actuarial skills and experience including investments, insurance, time value of money, risk assessment, fairness and equity, evidence-based data assessment, attention to detail, clear communication and report writing. Clearly, we could do more of this type of work for other lawyers! Thus, diversifying our client and work base.
Spreading the word in this new legal support services market, was greatly supported by the huge publicity this case received – unrelated to our piece. There were alleged breaches of the overarching obligations, fiduciary duty, professional conduct rules and the funding agreement, such that the funding provider ought not be entitled to recover any or all of all the legal costs and settlement amount previously awarded. As the case progressed, the scale of fraudulent activity unfolded in the public arena. To this day, when we talk to lawyers, they are aware of the Banksia case.
Since then, we’ve built a reputation continuing to bring our court experience and expertise on investments, insurance, risk, superannuation and wealth management to assist lawyers and the courts in expert assessment and testimony in class actions and loss calculations. The latter has benefited from our remediation experience arising from assessing and rectifying unit pricing errors.
Top 3 Learnings and outlook
In an ever-increasing complex, changing and litigious world, we expect this type of work to continue, and both class action lawyers and financial institutions to benefit from support from the right experts.
Our top three learning takeaways for financial institutions are:
- Continue to / always put members’ / policyholders’ interests first, and have that at the heart of all your decision making
- Document your process and rationale for every decision you take
- Get periodical independent review of processes and models you use that can affect the financial position of and service quality to your members.
Sean
Sean and the team at McGing Advisory & Actuarial provide a wide range of consulting services to life insurers, friendly societies, wealth managers and super funds. We combine deep actuarial and industry expertise to help financial services players meet these challenges to optimise growth.
[1] https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/Litigationfunding/Submissions