This is Jones Day's fifth review of Australian class actions developments. The White Paper reviews the class actions that were commenced and settled in 2018–2019. The White Paper also examines the types of novel claims that may be commenced as class actions in the future. This analysis aims to assist readers in identifying both current and potential areas of risk for class actions.
The 2018–2019 White Paper also discusses the important topics of competing class actions, common fund applications, class action settlement practices and litigation funding fees.
CLASS ACTIONS COMMENCED IN 2018–2019
Shareholder Class Actions
Shareholder class actions attracted the most attention in 2018, as their numbers continued to grow and the Australian Law Reform Commission ("ALRC") put them under the microscope.
Shareholder claims, frequently through multiple class actions, were commenced against AMP, BHP, Brambles, Commonwealth Bank of Australia, Dick Smith, GetSwift, Quintis and Woolworths in 2018, relying on alleged contraventions of Australia's continuous disclosure regime for listed corporations. Similar shareholder class actions were launched against Vocus Group and Lendlease in April 2019.
The ALRC found that for all finalized shareholder claims between 2013–2018, the median percentage of the settlement used to pay legal fees was 26%, and litigation funding fees was 23%. As a result, the median percentage of a settlement that was paid to group members was 51%.
The combination of shareholder class action frequency and the large transaction costs saw the ALRC recommend that the Australian government commission a review of the legal and economic impact of the operation, enforcement and effects of the continuous disclosure regime. However, this type of claim shows no sign of abating at present.
Claims Against Government
Class actions against various levels of government also continued to be pursued. This included a class action commenced in 2018 against the Department of Defence over firefighting foam used in Katherine in the Northern Territory. An earlier class action was commenced for contaminated soil and groundwater in and around Oakey in Queensland due to the use of firefighting chemicals. Similar claims in relation to other firefighting materials and methods employed elsewhere in Australia are expected to follow.
Class actions have also been brought over the charging of public hospital fees and losses due to delays in the construction of a light rail project in New South Wales.
Personal Injury / Product Liability
2018 saw three types of product liability or personal injury class actions commenced. Each is an example of a recognised category of class action that has been brought in the past.
A class action alleging negligence and breach of consumer guarantees against the manufacturer of medical implants for the purpose of treating pelvic organ prolapse and stress urinary incontinence was commenced in 2018. A similar case went to trial in 2017. Pharmaceutical and medical device class actions have been a feature of Australian class actions since the commencement of class actions legislation.
Takata airbags class actions continued to be filed in 2018, with seven carmakers now defendants in the Supreme Court of New South Wales. Faulty consumer products have also been a staple of the Australian class action environment. In addition, 2018 saw bushfire class actions against power companies persist. Since the Black Saturday bushfire class actions in Victoria resulted in record-breaking settlements, this type of class action has become more prevalent.
In February 2019, a product liability class action was commenced in the Federal Court of Australia in relation to combustible cladding. The Melbourne Lacrosse Tower fire in 2014 (liability for which was recently decided in Lacrosse Tower Fire case: Owners Corporation No.1 PS613436T v LU Simon Builders Pty Ltd & Ors  VCAT 286) first highlighted the prevalence of the issue in Australia, and this class action was a likely progression. The class action was against Alucobondbranded polyethylene cladding manufacturers. However, further proceedings may be brought against manufacturers of other brands of combustible cladding.
Class actions alleging sham contracting, where an employer misrepresents an employment relationship as an independent contracting arrangement, are underway in the Federal Court. These cases are discussed in our Commentary, "Australian Workplace Class Actions on the Rise".
A further class action was commenced in 2018 over the legal right of coal companies to use casual labour in their mines and seeks the recovery of alleged unpaid benefits.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.