Australia
Answer ... The court can order a wide variety of relief in class actions. For example, it may:
- determine an issue of law or fact;
- make a declaration of liability;
- grant any equitable relief; or
- award damages. In awarding damages, the court may:
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- identify a specific amount for individuals or particular pools of group members;
- identify methods of calculating a specific amount for individuals or particular pools of group members; or
- determine an aggregate amount without specifying how much must be paid to individual group members.
Australia
Answer ... Punitive (or exemplary) damages are rarely awarded in Australia.
Punitive damages are available at common law for a wide range of intentional torts; however, they are not available for claims of:
- defamation;
- breach of equitable obligations; or
- breach of contractual duty of confidence.
Aggravated damages are a different form of damages which are also available in Australia. Aggravated damages are awarded to a plaintiff that has suffered distress as a result of the defendant’s actions. Conduct that causes the plaintiff to suffer shame or humiliation and causes injury to dignity or pride may attract an award of aggravated damages.
Australia
Answer ... The fundamental principle in assessing quantum of damages is that the quantum should only be that which is required to place the plaintiff in its original position.
The plaintiff bears the onus of proving that the defendant’s conduct caused the loss claimed. At common law, the defendant bears the onus of proving:
- a failure to mitigate on the plaintiff’s behalf; and
- any contributory negligence.
The onus is on the plaintiff to quantify damages. This may be done by presenting a report from an expert regarding the quantum and methodology for calculating the damages. For example, in a shareholder class action, there are a number of methodologies that can be adopted when quantifying losses, including the following:
- ‘No transaction’ case: But for the alleged conduct, the shareholders would not have entered into any transaction;
- ‘Inflation’ case: But for the alleged conduct, the shareholders would still have traded, but at an alternative hypothetical price;
- ‘Alternative transaction’ case: But for the alleged conduct, the shareholders would have entered into an alternative transaction, such as an entirely different investment; or
- ‘Fundamental value’ or ‘true value’ case: This considers the question of what the shares were ‘truly’ worth, using more traditional valuation methodologies such as a discounted cash-flow analysis when quantifying loss.
The quantum of damages is entirely dependent on the loss that has been suffered by the group members and the calculation of damages will depend on the facts of the case.
Australia
Answer ... Under Section 33Z(1)(e) of the Federal Court of Australia Act 1976 (Cth), the court may award damages for group members, sub-group members or individual group members consisting of specified amounts or amounts worked out in such manner as the court specifies.
Under Section 33Z(1)(f), the court can award damages in an aggregate amount without specifying amounts awarded in respect of individual group members only if a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment (see Section 33Z(3) of the act). The first instance of aggregate damages being awarded to a funded litigant in Australia occurred in 2022 in Williams v Toyota Motor Corporation Australia Limited (Initial Trial) [2022] FCA 34.
The first instance of aggregate damages being awarded pursuant to Section 33Z(1)(f) was in ACCC v Golden Sphere International [1998] FCA 598. The next award of aggregate damages was some 24 years later, in Williams v Toyota Motor Corporation Australia Limited (Initial Trial) [2022] FCA 34. That case is subject to appeal, including a challenge to the factual and legal basis for the award of aggregate damages. That appeal was heard in November 2022 and judgment is reserved.
Once the approach is determined, how damages are allocated depends on how the proceedings were resolved – that is, whether a settlement was reached or the matter proceeded to final judgment. In the former case, there is a set sum of money to be distributed to group members.
If there is a litigation funder involved, depending on the funding arrangements in place, the funder will usually be reimbursed for the costs it has spent in the proceedings. The funder will usually also be entitled to a portion of the settlement sum by way of a common fund order, a funding equalisation order or a group fund order (see question 11). Following that, the remainder of the settlement sum is distributed to group members.
If the case proceeds to a final judgment and a determination is made on the common questions, if a settlement is then not reached to determine the claims of the class, there is then a second stage of the proceedings in which individual group members need to come forward and prove their individual loss. At this stage, if a group member is unable to prove its individual claim, it will not be entitled to any damages.