Commonwealth Bank customers who lost their life savings with failed financial services giant Storm Financial will receive 90 per cent of the funds they invested under a landmark deal.
Under the agreement, clients who borrowed from CBA to invest with the Townsville-based firm will be offered cash refunds or a reduction to their home loans to compensate them for their losses.
The deal was struck between law firm Slater and Gordon, representing more than 2000 former Storm clients, and CBA on Tuesday.
Lawyer Damien Scattini said the agreement established compensation principles to be applied to claims from customers and expected the bank to begin making compensation offers within days.
Commonwealth Bank CEO Ralph Norris said the bank wanted "a fair, transparent and expeditious resolution" for affected customers.
"Our commitment to our customers was to put things right where we had done wrong - and we are honouring that commitment," Mr Norris said.
Mr Scattini said customers who took out margin loans to invest with Storm would be remunerated for 90 per cent of the funds they used as security on the loan, provided the value of their investment slipped below the margin call level in the second half of 2008.
Thousands of Storm customers were left financially destitute after the global financial crisis took hold from September 2008 because margin calls, which would have saved most of their invested funds, were not made - either by the bank or Storm.
Mr Scattini said clients who were left in negative equity, meaning they were left owing money on their loan, would have the debt wiped and any contribution they made to reducing that amount would be refunded with interest.
In addition customers whose homes were overvalued by the bank would have their loan reduced and those who were still unable to make sufficient repayments would be offered hardship assistance, including reduced interest rates or a moratorium on repayments for a period of time.
Mr Scattini said the agreement was as good a result as clients could have hoped for "on a good day in court".
"No matter what their circumstance, no one will loose their home, which is beyond anything that would be recovered in a court case," he told AAP.
However, clients are not bound to accept the deal and can pursue the bank in court if they choose.
"This will suit the great bulk of people I'm sure but there will be some who want to try their chances somewhere else and they are perfectly entitled to do that."
Storm Investors Consumer Action Group chairman Noel O'Brien said the scheme was a mixed bag.
He welcomed the agreement regarding home loans but said the outcome in relation to margin loans was "not so palatable" and urged investors to read detailed documentation being sent to them by Slater and Gordon.
The agreement was reached following an assessment of six test cases by an independent panel led by former High Court Justice Ian Callinan.
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