Victims jump ship Storm clients chase better compo deal with new law firm

MANY of the victims of the Storm Financial disaster are swapping law firms to chase better compensation arrangements from the banks.

Sydney law firm Levitt Robinson conducted a meeting in Townsville on Saturday where about 300 former Storm clients attended to hear the firm's plans to pressure the Commonwealth Bank to improve its resolution scheme offer, as well as proposals for class action and individual actions against the Commonwealth and other banks.

Levitt Robinson has held similar meetings at centres up and down the Queensland coast.

``There's been a lot of instructions changed to us,'' Levitt principal Stewart Levitt said, adding that their client base had grown from about 70 in February to ``a couple of hundred'' now.

``What we are offering is representation by a firm which does not have a stake in the resolution scheme.''

Rival firm Slater and Gordon has been involved in the fallout of the Storm collapse for more than a year, and in February announced the terms of a resolution scheme negotiated with the Commonwealth Bank.

It is thought that many of its 1200 clients have stayed with the firm to negotiate an outcome with the bank.

However, Mr Levitt said there was a sense among the former Storm clients that they had not really got anybody batting for them.

``There was overwhelming disaffection with the status quo,'' Mr Levitt said of the mood of the meetings.

``There were a lot of people that did not feel they were receiving independent advice and felt pressured by the process.

``The CBA resolution scheme is only designed to address people's hardship not to compensate them for the damage suffered over matters which the bank can be held legally accountable.''

Mr Levitt said the Commonwealth Bank was not responding to approaches for negotiations on the way the resolution scheme was structured or to offers to run its proposed class action as a test case with the assistance of retired federal court judge Ron Merkel.

He said the firm would finalise its class action statement of claim this week and likely proceed first with individual actions by former Storm investors with claims including negligent lending and breach of contract on margin loans.

A Commonwealth Bank spokesman said the bank, through the resolution scheme, was honouring its commitment to put right what it had done wrong.

``The scheme operates on a confidential and ``without prejudice'' basis and the bank will not be discussing issues of legal liability in the media,'' the spokesman said.

``We remain committed to constructive negotiations aimed at the speedy resolution of claims under the scheme.

``All borrowers, whether represented by Slater & Gordon, Levitt Robinson or any other borrower lawyer, retain all their rights under the scheme, including the right to make a counter offer to any bank proposal and to have their case considered by the independent panel if they wish.''