Farmers urged to join Fonterra class action

Fonterra class action continues as farmers urged to register

Dairy
ONGOING: Farmers are being urged to register as part of a class action seeking compensation against Fonterra Australia's "clawback" in 2016.

ONGOING: Farmers are being urged to register as part of a class action seeking compensation against Fonterra Australia's "clawback" in 2016.

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Fonterra denies allegations as law firm pushes for class action registrations.

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The law firm leading a class action against Fonterra Australia has renewed calls for farmers to register before it is too late.

The case, which seeks compensation for farmers affected by Fonterra's clawback in 2016, was lodged in the Supreme Court of Victoria in June.

Adley Bursryner is representing the plaintiffs in the case, Lynden and Geoffrey Iddles.

Founder David Burstyner said around 350 farmers had registered so far but it was imperative that more people joined.

"In the nearly five years we've been working up this case, we've heard hundreds and hundreds of farmers who've been in support," he said.

"The support is very, very good on one sense but what we need to make the case go forward, to ensure it continues, is registration."

He stressed that Fonterra did not have a list of names of the people registered.

He was also concerned there were farmers looking to benefit from the outcome from the case without getting involved.

"What the ones who come to the meetings and engage with us tell us, is that pretty much every farmer they know wants to benefit of this case and wants it to go ahead, but they're getting on with their day to day and that is the nature of farmers," he said.

"I also think there's some concern you can be a free-rider and avoid the cut that the funder takes, and that's wrong.

"There is no free riding in this system and the judge doesn't allow a benefit in a class action to go to someone if they don't register.

"What they do is they jeopardise the whole case going ahead, because if there aren't enough registrations the case may have to stop."

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He said about 600 registrations would be enough to proceed, but the case was currently short of that.

"We have a case management conference coming up later this month," he said.

"The judge might then ask us about doing what's called a 'class closure', that's when you confine who's in and who's out.

"If there's not that critical mass that makes it economically worthwhile for the funder, then they pull the plug."

The case is funded by Litigation Lending Services and there is no cost to farmers.

Mr Burstyner said costs were a common theme raised at information sessions.

"Farmers also - like in a lot of class actions - want to make sure that there's enough money in it for them and it's not a lawyers picnic or funders picnic," he said.

"We're working in a dynamic where the courts make sure that a reasonable and fair percentage goes back into the pockets of what are called group members, in this case farmers."

The next stage of the process would see the parties exchange documents related to the case, he said.

"I'd imagine we'd be getting around 100 000 documents from them," he said.

"The documents we're likely to get will be board minutes of that setting of that farmgate price, all the internal papers and emails and minutes of meetings that Fonterra had for the setting the price."

The class action claims Fonterra allegedly breached contractual obligations by implementing a step down in milk price.

It also alleges Fonterra engaged in "misleading conduct about the likelihood of a step down" and acted "unconscionably" towards suppliers, court documents reveal.

In a statement, Fonterra said it denied the allegations in the class action and was defending the case vigorously.

"Over the past four and a half years, we have completely overhauled the relationship with our farmers, starting with the recently formed Fonterra Australia Suppliers Council which replaced BSC, and the benchmark agreement," a spokesperson said.

"We are proud of the good relationship we have today with our farmers and industry."

It noted the ACCC investigated the 2016 milk price reduction and decided not to take any action against Fonterra.

"The class action relates to the milk price step-down in the 2015/16 season following changes in the global market," the statement read.

"The class action is funded by a litigation funding provider whose business is to fund litigation in order to gain a commercial return."

Fonterra also said it had not commenced any new debt recovery proceedings against potentially affected suppliers in light of the class action.

Farmers can register at www.fonterraclassaction.com.au.

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