Slater & Gordon Limited Case Study - Business Law

Running head: BUSINESS LAW
Slater & Gordon Limited case study
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Table of Contents
Introduction:....................................................................................................................................2
Answer to question 1.......................................................................................................................3
Issue:............................................................................................................................................3
Rules:...........................................................................................................................................3
Application:.................................................................................................................................4
Conclusion:..................................................................................................................................4
Answer to question 2.......................................................................................................................4
Issue:............................................................................................................................................4
Rule:.............................................................................................................................................4
Application:.................................................................................................................................5
Conclusion:..................................................................................................................................6
Answer to question 3.......................................................................................................................6
Issue:............................................................................................................................................6
Rules:...........................................................................................................................................6
Application:.................................................................................................................................7
Conclusion:..................................................................................................................................8
Conclusion of the case (final):.........................................................................................................8
Reference:........................................................................................................................................9

2BUSINESS LAW
Introduction:
In this case, it has been observed that certain class actions have been taken against some
companies that are suffering from financial problems. It has been observed that the shareholders
of the Slater and Gordon have the possibilities to take active part in the class actions as the
company is alleged to become a part of the financial problems. The term class action denotes
certain legal process where certain group of people forms a party to such case and they are
representing them as a member of a group1. The term class action has derived its origin from
United States and it becomes a part of the Australian Judicial system after the Federal Court of
Australia Act has been amended in the year 19922. In the given case, it has been observed that
the rival law firm Maurice Blackburn has lends $250 million class action and the same legal
action involves 3000 people. Allegation has been made by Andrew Watson as against the Slater
and Gordon that the company has misrepresented the financial outlook towards the market. After
considering all the allegations made against the company, it has been observed that the company
had faced huge financial loss in 2015 and the company has made a promise to the shareholders
that the company will recover all the damages and failed to do so. It has further contended by
Andrew Watson that due to the failure of the company, the shares of the company has been fallen
to 51% and in this regard, he wants to file class action against the company. A plea of
investigation has been formed and it has been alleged that the company has failed to meet all the
requirements to this effect and their activities comes under the purview of misconduct. In this
report, an attempt has been made to identify the real situation of the alleged company, scope of
1 Arena, Matteo, and Brandon Julio. "The effects of securities class action litigation on corporate liquidity and investment
policy." Journal of Financial and Quantitative Analysis 50.1-2 (2015): 251-275.
2 Frumer, Louis R., Melvin I. Friedman, and Cary Stewart Sklaren. Is the Action Time-Barred? Raising or Avoiding the Defense
of the Statute of Limitation or Statute of Repose. Vol. 4. Products Liability, 2016.

3BUSINESS LAW
their activities and it has also been searched whether the principle of lifting corporate veil will be
applicable here or not.
Answer to question 1
Issue:
There are certain issues cropped up in this regard. The first issue to the effect is to
determine whether the alleged company has to face required legal actions in case of class actions
or not.
Rules:
Certain provisions of the Corporation Act will be imposed in this case. it has been
observed in the provision of section 674 of the Corporation Act that it is the duty of every
company to reveal substantial evidence that are listed under the Act to this effect3. The main
discussed provision in this case is section 728 of the Act. According to this section, a person is
restrained to make any such suggestion regarding the documentary securities to such extent that
can become deceptive and misleading in nature. it has further been stated that all the persons are
restrained to make any statement that concludes in detrimental effect to the shareholders or all
the related person. In this case, person can be included the companies too as companies are legal
person. It has been mentioned in section 728(2) of the Law that all the persons are required to
achieve sufficient knowledge regarding the declaration and in case of any absence of knowledge,
the effect of the declaration could affect the interest of the people to whom such declaration has
been made4. Further, the activities of the alleged company has attracted the provision of section
3 Watts, Peter George. Directors' powers and duties. LexisNexis NZ Limited, 2015.
4 Huggins, Anna, Roger Simnett, and Anil Hargovan. "Integrated reporting and directors’ concerns about personal liability
exposure: Law reform options." Company and Securities Law Journal 33 (2015): 176-195.