The Melbourne solicitor co-ordinating the class action, Mark Elliott, said the mediation talks had been initiated by the 15 defendants, who included the Banksia directors, auditors and Banksia’s trust company.

The talks will start on July 21 with former Federal Court judge Ray Finkelstein as the mediator between the defendants and investors who are seeking up to $150 million for funds they lost when Banksia collapsed in October 2012.

If no resolution is achieved, the case is scheduled to be heard in the Victorian Supreme Court next year.

Mr Elliott said he had been contacted by hundreds of Banksia investors who indicated that if the class action could get a “reasonable” payout from the defendants, it would be helpful to their financial situation.

Mr Elliott said the Supreme Court has asked for a report on the outcome of the mediation talks by early August.

He said all of the defendants presently denied liability and appeared to be waiting to see how long the investors were willing to persist with the class action.

However he was optimistic mediation would progress the class action because it would allow each of the defendant groups “to come into the courtyard and throw all their bits together and see if we can make a salad”. If the mediation was successful, Mr Elliott doubted it would return 100 cents in the dollar to investors.

Without some compromise, it would be in no one’s interest to settle the case in mediation, he said.

Those involved in the class action would visit Warrnambool and other regions after the mediation talks with updates on its progress.