The gloves are off as five big law firms shape up to fight for the right to represent aggrieved shareholders in AMP who have seen their investments lose $2 billion in value since April.

The stakes are high as the winning firm stands to pull in tens of millions of dollars in fees.

The AMP share price fall resulted from revelations at the financial services royal commission that the firm had deliberately misled regulator ASIC 20 times about its fee-for-no-service misconduct. So far, those revelations have claimed the scalps of AMP chair Catherine Brenner, CEO Craig Mellor and three other directors.

As the fallout moves towards lawyers at 10 paces, law firms are trying to drum up aggrieved shareholders to join class actions. Some have already released advertising campaigns enticing those investors to sign up for the prospect of a payout if their cases succeed.

So attractive is the prospect of running a class action, that five major firms are battling it out to win the business.

They are Maurice Blackburn, Slater & Gordon, Shine, Quinn, Emmanuel, Urquhart and Sullivan and Phi Finney McDonald. The first two are big-name plaintiff firms with a long history of acting for workers in compensation cases.

Shine is an entrepreneurial outfit launched by one-time Queensland Attorney General Kerry Shine, while Quinn Emanuel is a big Los Angeles-based operator.

Phi Finney McDonald was formed last year by three refugees from Slater & Gordon who left after its share price was trashed as a result of a disastrous UK expansion move.

The legal big-hitters have their eyes on the glittering prize that class actions like the impending AMP case can deliver.

Maurice Blackburn, for example, walked away with more than $100 million for running two successful class actions for the victims of the 2009 Black Saturday bushfires in Victoria. That came out of the $794 million awarded to the victims themselves.

The award by the courts to the lawyers spurred one fire victim, Garry Angus, to observe: “The only winners out of this have been Maurice Blackburn”.

Slater & Gordon earned $10.06 million in fees from the largest shareholder class action, the $200 million Centro Properties case while Maurice Blackburn earned $21 million from the same case. Maurice Blackburn also reaped $12.5 million from the $144.5 million Aristocrat Leisure settlement.

Major Shareholder Class Actions

The firms are all backed by major litigation funders, companies with big balance sheets who take a punt on funding class actions for a slice of the settlement if they win. Quinn Emmanuel has called in the big guns, being backed by Burford, a US group far larger than any in Australia.

So keen are the lawyers to win, they have started a fee-cutting war to get their bids over the line. Slaters on Friday announced it would cut its litigation funder’s fees from 25 per cent to 10 per cent and said it would run its case on a no-win, no-fee basis.

Tim Finney, partner with Phi Finney McDonald, said the firm had dropped its right to “uplift” fees, or add extra charges for fees not paid by its funder while the case runs.  Maurice Blackburn’s funder will charge 12.5 per cent.

The ultimate size of the AMP settlement is just a guess at this point. But lawyers involved told The New Daily it could be larger than the record-setting Centro case.

One report suggested it could be as much as $1 billion, given that more than $2 billion has been wiped off the AMP share price since the scandal broke in April.

The litigation funders are paid a percentage of the settlement so would be heading for a fat payout even if the compensation totals only half that.

A court will decide which law firm gets to run the class action.