AUSTRALIA: An Introduction to Dispute Resolution: Class Action (Plaintiff)

Class Actions Remain a Prominent Feature of Australian Litigation in 2024

Although some commentators considered that the tide had turned against class actions with notable victories for the defendants in the CBA and Worley class actions, new claims continue to be filed. Shareholder class actions continue to remain a key focus, with class actions filed against Phoslock Environmental Technologies, WiseTech Global, and Domino’s Pizza.

Class actions on behalf of consumers have also been filed, including claims against Australia’s two largest supermarket chains for alleged misleading discounts and a claim against a large retailer who sold extended warranties that allegedly gave consumers no more than their existing statutory rights.

Class actions against Apple and Google

The trial of the long-running class actions against Apple and Google was completed. These claims concerned the alleged anti-competitive practices and excessive commission fees charged by Apple and Google in their respective app stores. The outcome of this case is keenly awaited as it will shape the approach to class actions under Australia’s competition law in years to come.

The Ford and Toyota class actions

The High Court of Australia gave its judgment in the Ford and Toyota class actions concerning the assessment of damages under the Australian Consumer Law for defective goods. In a significant victory for consumers, the High Court ruled that damages must be assessed based on the diminished value of the defective vehicles at the time of supply, without considering subsequent repairs or usage, including any recall programme. The High Court’s decision gives certainty to consumers that they can obtain compensation for defective vehicles and provides clarity on how compensation is to be calculated. The certainty will likely encourage an influx of consumer class actions, particularly for vehicle defects, but should also encourage faster settlement of claims by manufacturers now that there is a defined method of calculating consumer loss.

R&B Investments Pty Ltd (Trustee) v Blue Sky

The Federal Court of Australia confirmed its authority to award a “Solicitors’ Common Fund Order” (SCFO) upon settlement or judgment in representative proceedings in R&B Investments Pty Ltd (Trustee) v Blue Sky (Reserved Question) [2024] FCAFC 89. This was a groundbreaking development, marking the first time that the Federal Court has substantively addressed the matter of an SCFO – an issue that has stirred considerable debate within the legal community. An SCFO facilitates the distribution of funds to a solicitor other than payment for costs and disbursements incurred in relation to the conduct of a class action, in return for the risks taken on by funding the proceedings. While the concept of a solicitor being remunerated this way is already conventional in class actions at the Supreme Court of Victoria, it is a grey area in other states that lack respective legislation. However, handing down this decision, the Full Court of the Federal Court of Australia, comprising Justices Lee, Murphy and Beach, affirmed that Sections 33V and 33Z of the Federal Court of Australia Act 1976 (Cth) (FCA) confer power on the court to grant an SCFO. The decision significantly enhances access to justice, providing greater certainty for parties, group members, and stakeholders involved in class actions across various jurisdictions.

Key issues coming up in 2025

Looking ahead, 2025 is shaping up to be another important year for class action jurisprudence in the High Court with three key issues to be decided:

• First, argument was heard in Lendlease Corporation Limited ACN 000 226 228 & Another v David William Pallas and Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund & Another [2024] HCATrans 76 (5 November 2024). This case will resolve the split between the Federal Court and the Supreme Court of New South Wales as to the power of the court to make orders for “soft class closure”. Both sides argued in favour of the court having the power to make such orders, which resulted in the High Court appointing a contradictor to take the opposing view.
• Second, argument was heard in Bogan & Another v The Estate of Peter John Smedley (Deceased) & Others [2024] HCATrans 79 (12 November 2024). The underlying proceeding is the Arrium class action, which was commenced in the Supreme Court of Victoria, where the Supreme Court of Victoria granted one of the first group costs orders (GCOs). One of the defendants applied to transfer the proceedings to the Supreme Court of New South Wales pursuant to the Cross-Vesting legislation. The issues the High Court will determine are:
  • Where a court is deciding whether or not to transfer the proceedings to a different court, is it permissible for the court to take into account a GCO made under Section 33ZDA of the Supreme Court Act 1986 (Vic) and the impact of the transfer upon access to justice?
  • What is the proper construction and operation of Section 1337P(2) of the Corporations Act in circumstances where the transferor court has made an order which the transferee court lacks the power to make, and lacks any domestic apparatus to administer?
• Third, special leave was granted in Kain v R&B Investments Pty Ltd as trustee for the R&B Pension Fund & Others [2024] HCASL 286. This is the appeal from R&B Investments Pty Ltd (Trustee) v Blue Sky (Reserved Question) [2024] FCAFC 89 discussed above.