Lawyers launching a class action over claims Vodafone did not offer a reliable mobile phone network will seek at least $2.5 million on behalf of thousands of customers.
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Law firm Piper Alderman announced today it would go ahead with the long-mooted class action after it secured funding from Litigation Fund LCM to sue the telco.
Sasha Ivantsoff, a partner with the law firm, said it planned to launch the action in the next three months after emailing 23,000 Vodafone customers who completed a survey and indicated their intention to join the class action.
He said he must first approach Vodafone for mediation before the matter heads to the Federal Court.
"We are confident about liability, they have made their own public admissions,'' he said, referring to former chief executive Nigel Dew's public apology for network problems.
Legal action against Vodafone was first threatened more than two years ago when issues with its network were brought to light by customers and the media.
The action was threatened over dropped calls, bad reception and poor data performance, but stalled after the firm failed to secure funding to back it.
Mr Ivantsoff said the action would cover people who were Vodafone customers in 2010 and 2011.
“They will need to re-enter their details, provide us a bit of information about how much money they were spending each month with Vodafone and that's pretty much it,” Mr Ivantsoff said.
Hundreds of thousands of customers have deserted Vodafone since network issues were first brought to light. Accounts released earlier this month showed its Australian business lost about 128,000 customers in the last three months of 2012.
On its website, Litigation Fund LCM states it “prefers” to undertake projects in which the relevant legal claim is for at least $2.5 million. Mr Ivantsoff said he could not quantify exactly how large the damages claim against Vodafone would be, but estimated it would be “at least” $2.5 million. “I would imagine more than that,” he said.
He said the firm has agreed to give Litigation Fund LCM 15 per cent of the total amount of damages if the matter settles successfully before the end of May or 33 per cent thereafter.
The remainder, 67 per cent minus legal costs, would be shared among 23,000 claimants.
This means the 23,000 claimants won't get the average cost of a 24-month plan refunded unless Vodafone is ordered to pay more than $50 million.
Mr Ivanstoff alleges Vodafone breached Australian Consumer Law through claims that it ''had a network service what was capable of carrying phone calls, messages, and data to 94 per cent of the population'', when this was not the case.
"[Claimant] damages will be the price they paid [per month] less the value of the service they received [from Vodafone],'' he said.
Vodafone said in a statement that Piper Alderman had not contacted it about the action, but it was aware the firm the firm was set to announce a lawsuit. The telco said the law firm was known for promoting class actions, but had not “sought to discuss” claims of any customers with it.
Asked why it took more than two years to put together a class action, Mr Ivantsoff said that it took “a lot of work” to investigate the nature of the claims against Vodafone.
“We envisage being able to approach Vodafone sooner rather than later with the nature of the case, open some discussions and if they are unsuccessful then our objective is to file proceedings within three months," he said.
with Lucy Battersby