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Cashman, Peter --- "Consumers and Class Actions" [2001] UWSLawRw 2; (2001) 5(1) University of Western Sydney Law Review 9

CONSUMERS AND CLASS ACTIONS

Peter Cashman

Introduction

What is a class action? The terminology may be familiar to you, but most people are not aware of the formal legal requirements. Class actions were first introduced into Australia by provisions adopted in the Federal Court of Australia Act 1976 (Cth).

They provide that:

where there are seven or more people who have claims against the same person; and
where those claims are in respect of, or arise out of similar or related circumstances;

the claims of those people may be brought by one or more people on their behalf. Extra provisos apply that there must be a substantial common issue of law or fact, and that the cause of action relied upon arose after the Federal Court of Australia Amendment Act 1991 came into force (5 March 1992). There are some other technical and procedural (including pleading) requirements, but I do not propose to dwell on those.

The size of the class is ultimately as large or small as one wants to define it, provided there are seven or more people. Beyond that, the class can comprise as many people as are affected, or a limited subset of those people if the person bringing the action decides to limit the proceedings in some way. According to research conducted by Maurice Blackburn Cashman, over 90 cases have been commenced in the Federal Court since the new legislation was introduced.

Selected current litigation

Those 90 actions encompass a wide range of issues, including actions brought on behalf of consumers in respect of defective products, actions brought in relation to discrimination and actions arising out of misleading and deceptive conduct.

Class actions handled by Maurice Blackburn Cashman encompass quite diverse issues.

An action brought by shareholders against the GIO over certain misleading and deceptive conduct during a takeover, which resulted in shareholders retaining shares at a much lower value than was on offer.
An action in Victoria on behalf of a significant number of people arising out of the Longford gas explosion. Claims have been made for economic loss suffered by individual consumers, businesses, restaurants and hotels as a result of the interruptions to the supply of gas. This case is being conducted jointly with Slater & Gordon.
An action against three multinational companies, alleging that they engaged in price fixing in relation to vitamins. These three companies have been sued on the basis that they effectively entered into a conspiracy to rig the price of vitamins worldwide, which resulted in artificially high prices being paid by consumers in Australia and throughout the world. The United States Justice Department prosecuted the companies and fined them $1.2 billion and a civil action was settled in the United States for about a billion dollars. One of the other companies involved in the price fixing, in consideration of immunity from prosecution, decided to give evidence against the others. Thus the remaining companies are being sued in the United States, in Canada, in Australia and elsewhere, which reflects the often-international dimension of class action litigation.
Another case arises out of the contamination of aviation fuel and the resulting interruption of aviation services throughout the country, particularly in rural regions. This case is also being conducted jointly with Slater & Gordon.
Proceedings on behalf of about 2,000 women against the Dow Corning Corporation and other breast implant manufacturers arising out of what we contend to be defective breast implants.
An action some years ago for personal injuries on behalf of passengers on Qantas airplanes as a result of exposure to cigarette smoke on flights. The case succeeded at trial but the judgment was overturned on appeal.

Other cases include:

An action on behalf of people who had pacemaker leads which were defective and who had to undergo surgery for replacement or repair of those leads.[1]
An action on behalf of women who became pregnant following laparoscopic sterilisation using a particular clip, called a ‘Filshie Clip’, which is put on the fallopian tube and is intended to prevent conception. These were often women who had not wanted to become pregnant because they already had families and were returning to the work force.
An action against GIO on behalf of borrowers who were misled into believing that the terms of a particular loan offered to them would result in fixed interest or a fixed margin on the interest calculated during the period of the loan. When the loans were entered into, the borrowers found that the company sought to use a provision in the contract to vary the margins of the loan. That case had a mixed outcome - although we won it at trial we lost in the Court of Appeal and in the High Court. That was quite an interesting case where a corporation escaped liability, even though it was found to have engaged in deceptive conduct by making representations to borrowers who had entered into the loans on the strength of those representations.
A case against a company in relation to defective home security devices.

Current problems for class actions

Three legal controversies have been before the courts. Two relate to cases in which we are involved and another case involves tobacco.

Constitutionality of class actions

The first legal controversy is an argument that the Australian Constitution does not permit class actions. That argument is being run in one of our cases, the case of Bright v Femcare[2] . We are suing a British company and its Australian distributor on behalf of women who had fallopian tube clips applied to them, but which later failed. The defendants in that litigation argued that the entirety of Part IVA of the Federal Court of Australia Act 1976 is constitutionally invalid. The trial judge handed down a decision in our favour, and the matter has been argued before the Full Federal Court. That decision is reserved, and depending on the outcome, may go to the High Court.[3]

The argument being put is that class actions are constitutionally invalid because they give somebody the right to represent other persons, described by the respondent as the ‘ignorant passive losers’. The argument is that those persons whose rights are being litigated by another do not have a right to be informed, nor do they have a right to participate. Further, it is contended that the way in which the Federal Court has been given power to determine these issues involves something other than judicial power, and is therefore unconstitutional.

There is also an argument based on a technical provision in the Constitution to do with acquiring peoples’ property. It is argued that class actions amount to the taking of property of the class members. This is an interesting argument that I do not have time to elaborate on, although I suspect the prospect of that argument succeeding is close to zero.

The importance of pleadings

Assuming that class actions are constitutional, then of course many of these actions can continue. However, there remain some impediments.

One problem came to light in the tobacco litigation case of Phillip Morris v Nixon[4] . In that case, a class action was brought against each of the major manufacturers of cigarettes in this country on behalf of people who smoked and who suffered injuries as a result. The case was struck out by a 2-1 majority of the Federal Court. The minority judge made findings adverse to the class, but would have given the applicant permission to re-plead the case. The other judges decided that class actions were not appropriate for trying to sue each of the cigarette companies, for a number of different reasons.

One of the concerns of Spender J was that each of the plaintiffs was trying to sue all of the defendant manufacturers by alleging collective conduct. Spender J had some difficulty in comprehending how it could be that the various strategies of the tobacco industry over the years, which were not part of any single campaign, could be the subject of litigation in a class action. His Honour also had some difficulty with the assertion that each class member would be able to establish a causal connection between their individual condition and the collective conduct of each of the defendants. In his opinion, the plaintiffs' case required detailed examination of every instance of advertising, promotion and lobbying by the companies over a period of four decades, and he had some difficulty with allowing the case to proceed on that basis. In his view, these were disparate claims caused by different statements made at different times by different people.

Hill J also had a problem with each class member bringing a claim against all the respondents as principal defendants. He was concerned that the conduct in question, which extended over 40 years in the case of the tort claims and over 24 years in the case of the trade practices claims, was diverse in its nature and involved many different companies. Ultimately he was not persuaded that each class member was able to sue in respect of the conduct of all the defendants.

Sackville J also had some difficulty with the case, particularly with the way in which it had been pleaded. He was not satisfied that the ‘claims against the same person’ requirement had been met, because there were in fact claims against a number of defendants. There was also doubt expressed whether each class member had claims against each of the defendants. His Honour also questioned whether each member’s claim arose out of the same, similar or related circumstances, being another prerequisite for commencing class actions.

Sackville J found there had been diverse conduct over 40 years involving advertising, promotion, lobbying and various other activities, so that there was some difficulty in establishing that that conduct was sufficiently similar or related in order to satisfy those legal requirements. He also had some difficulty in comprehending how it could be said that the claims of each class member gave rise to a substantial common issue of law or fact for the class. Notwithstanding these problems, Sackville J was sufficiently satisfied that it was possible to circumnavigate some of those pleading difficulties and he was prepared to give the representative applicant leave to continue the case if the pleadings were reformulated. However because he was in the minority, the proceedings were struck out.

Claims for medical monitoring

The third current legal controversy arises in one of our current cases, Spice v Pacific Dunlop, involving defective pacemaker leads. The defendants have agreed to settle the claims of those class members who had to undergo surgery. Obviously that is a serious thing to undergo - not necessarily life-threatening, but not something that you would volunteer for. The settlement, which has now been approved and implemented by the Federal Court, provides for a payment scheme for people who satisfy that requirement of injury. A certain amount was offered to each of the class members. If they did not like that amount, they had a right to individualised assessment. There was no limit on the damages which they could recover under the terms of that settlement.

The legal controversy arises in respect of the remaining members of the class who have not yet suffered a fracture of the lead, but who are undergoing medical monitoring. Those people undergo medical examinations twice a year, and our contention is that this is loss or damage which is compensable, even if they have not as yet suffered a fracture of the lead and have not had to undergo surgery. We say they should be entitled to compensation for the stress, anxiety and cost of having to go out of their way to submit to routine medical testing, which is only necessary because of the potential defect in the pacemaker. It is not the routine monitoring that anyone with a prosthetic device, such as a pacemaker, would need to undergo. The defendants say that the law does not permit recovery of damages for that type of loss except in the case of nervous shock. However the law on nervous shock is quite restrictive, it does not extend to ordinary responses of grief, it only compensates people who have suffered quite serious abnormal psychiatric type reactions. Most of these people do not fall into that category.

We have recently reached an agreement to settle those claims. This will allow for some money to be paid to each of the class members, even though the defendants do not admit that they are entitled to be compensated for medical monitoring. The company has been paying the medical costs of this monitoring ever since the problem came to light.

Policy issues

I want to say something more broadly about the policy or political controversy that is taking place, both in this country and in the United States, in relation to class actions. On one view the class action is not particularly radical. It is merely a procedural reform that enables lots of people who have a claim to sue in one case rather than sue by way of separate, independent claims. So, in other words, class action laws do not create any new rights, they do not give rise to any additional grounds for suing a defendant, they just simply provide a procedural mechanism for aggregating claims.

Why is there all this controversy? I refer to a comment made in a recent US review which talks about the political controversy in the United States:

The debate over damages class actions is characterised by charges and countercharges about the merits of these lawsuits, the fairness of settlements and the costs or benefits to society. Anecdotes abound and certain cases are held up repeatedly as exemplars of class actions’ great value or their worst excesses. In the fervour of debate it is difficult to separate fact from fiction, aberrational from the ordinary. The debate implicates deep beliefs about our social and political systems; the need for regulation, the proper role of the courts, what constitutes fair legal process. These beliefs exert such strong influence of the people’s reactions to class action lawsuits that different observers sometimes will describe the same lawsuit in starkly different terms. The protagonists disagree not only about the facts, but also what to make of them.[5]

I believe that statement is true in the Australian context as well.

There are two sides to the debate - crudely, the plaintiffs’ side and the defendants’ side, although the political controversy is much more complex than that would suggest. On the plaintiffs’ side there are those who would identify the benefits of class actions and, for the sake of simplicity, I shall outline what I regard as 12 benefits.

The advantages of class actions

First of all, class actions provide access to justice for people who may not otherwise get such access. Second, they reduce the expense of litigation because in aggregating claims it is possible to resolve them more cheaply than it would be to sue separately for each of the individual members of the class. Third, class actions result in a shift in the balance of power between individual litigants and corporate defendants. Often in individual litigation a single litigant or consumer is faced with a powerful defendant (usually a large corporation, often a multinational corporation, frequently backed by an insurance company) with the benefit of tax deductibility for the expenses incurred in defending the claim. Not many people, as individuals, want to go into battle in court or otherwise against such a formidable adversary.

The fourth benefit of class actions is that they provide a more efficient mechanism for resolving large numbers of claims. The fifth benefit is that they arguably deter corporations from engaging in unlawful conduct because of the realisation that they may be sued. The sixth benefit is they promote positive changes in financial practices, employment practices and in product design. The seventh advantage is that they provide individual members of the public with a mechanism for regulatory enforcement, which is all the more important in an age where government regulators have both budgetary and political constraints. An eighth advantage is that they provide a mechanism for the resolution of claims thus enabling business people to get back to doing business and not spend all of their time in court defending a large number of individual claims.

The ninth benefit is that the class members get a free ride. People often do not appreciate that if you are a member of the class you can sit back and have someone else litigate your claim without cost and without any potential liability for having to pay the other side’s costs if the case is lost. So in other words, if it is a winner, you get the benefit at no cost, if it is a loser, you do not pay the costs. That is not something you customarily get in ordinary litigation, where parties are potentially liable and are often ordered to pay the costs of the successful party. The tenth advantage is that there are certain logistical and procedural advantages of concentrating claims in a particular forum, whether it is the Federal Court or the State Supreme Court.

An eleventh benefit is that there are procedural advantages in conducting class actions, such as the broader discovery of documents, which may not exist in cases being pursued on behalf of an individual litigant. And finally, one often-unrecognised advantage is that the mere commencement of a class action stops the limitation period running for all of the members of the class during the pendency of the litigation. The members of the class do not have to file their own suit, so time is suspended for the purpose of any claim they may wish to pursue. If at a later point they want to opt out of the class action (and it is important to bear in mind people are not bound to stay in) they can elect to opt out if they want to. If they later opt out and pursue their own claim, time only starts to run again after opting out.

Those are, in my view, significant benefits. If I were speaking to you as a defence lawyer, I would tell you about all the disadvantages of class actions. In the interest of fairness, I will outline 12 disadvantages.

The disadvantages of class actions

Defendants will maintain that class actions are objectionable because they allow a few individuals to litigate on behalf of others who do not participate, may not be aware of the litigation, whose consent is not required and who will be bound by the outcome - the problem of the ‘ignorant passive loser’ referred to before. Second, the argument is sometimes made that the proceedings which are brought lack legal merit. Third, it is suggested that the increased exposure of defendants to mega-damages often forces settlements of even unmeritorious claims, including in circumstances where there is no scientific evidence to establish a connection between the product used and the injury in question. The best and most popularly debated example of that is in the breast implant litigation. Dow Corning would have you believe that there is no scientific link between breast implants and auto-immune disease, and that therefore it is the victim of an unmeritorious process of litigation worldwide where there have been numerous class actions and 300,000 individual claims brought against it.

A fourth disadvantage is that individual damages for class members may ultimately be less, even if the case is successful, than if those people had pursued a personal claim and had damages assessed at an individual level. A fifth disadvantage, or so it is said, is that class actions provide a mechanism for mass recovery of individual amounts which may be relatively small and relatively inconsequential, but provide substantial fees for class action lawyers. Understandably, corporations do not like being on the receiving end of mega-claims that are individually small but which in the aggregate might be very substantially large.

A sixth disadvantage is said to be that the mechanism of class actions has resulted in an increase in entrepreneurial lawyering, due to substantial financial incentives to lawyers. It is contended that some plaintiff’s lawyers go around drumming up cases in circumstances where they are primarily motivated by self-interest rather than the interests of their clients. It is also said that this has resulted in a fundamental change in the way in which lawyers act: rather than being reactive to clients coming to see them, they are pro-active in looking to generate litigation. The by-product of course is an increase in work for defence lawyers, so in one sense there could be perceived to be an unholy alliance between both plaintiffs’ and defendants’ lawyers insofar as class actions are good for legal business.

An eighth disadvantage is that there is little real participation by class members in the conduct of the litigation and in relation to terms of settlement, which are said to be negotiated by lawyers without involving clients in the way that one would traditionally involve a client in settling a case. Class actions are often settled for mega-dollars without any members of the class (other than the representative applicant) giving authority to settle and with often quite limited legal entitlements under the terms of that settlement.

A ninth difficulty is that there is potential for intra-class conflict where the interests of certain members of the class differ from other members of the class. This is a live issue in a number of the international class actions in which we have been involved.

A further difficulty is said to be finding a means to allocate damages which are proportional to the loss of each class member, without substantial administrative or transactional costs. This has resulted in what United States commentators would term a 'cookie cutter settlement'. This is where agreement is reached that the individual damages for the member of the class would be $X, without regard to whether a person’s claim would be worth more, including by reference to the severity of the injury, the magnitude of the economic loss or the quantum of medical expenses. These are all the things that are individually taken into account in determining the quantum of claims in individual cases, and it is said that they often go out the window in class action settlements.

The Dow Corning settlement is a classic example of this. Although Dow Corning denies liability and says its implants do not injure anyone, it is offering to pay over US$2 billion to women worldwide if they can prove they have a Dow Corning implant. But the benefits that are being offered to the people are 'cookie cutter' benefits. You get $X if you had a rupture, you get $Y if you are classified on a grid having a particular disease, you get $Z if you fall into another category. There is little allowance for differences in severity of injury, for psychiatric injury or for economic loss; you just get a fixed sum within certain injury categories. The advantage is that there are no transaction costs, at least for the class member, who only has to agree to the settlement and gets a cheque in the mail.

An eleventh difficulty is the assertion that allocation decisions are made by people who are not truly independent. If you bring a case to court and you are tried before a judge, the judge obviously does not have any personal interest in the outcome of the case. A judge will make a decision based on the evidence and will allocate damages based on the quantification of loss and the principles of law that are legally acceptable. If the judge gets it wrong there is the Court of Appeal, and if the Court of Appeal gets it wrong, there is a High Court. These are the mechanisms for review, assessment and accountability. Class action settlements require judicial approval but once they are implemented there is very little class members can do other than reject the benefits or try and opt out after the event to litigate their own claims. Yet conventional legal wisdom accepts that this is not possible if they have not already opted out; they are bound and can either accept or reject the benefits, but do not have the right to litigate their own claim.

A further disadvantage, so it is said, is that certain lawyers or law firms may acquire a monopoly on the right to represent people. Certain law firms may effectively achieve a monopoly on the right to represent people by virtue of filing a class action before anyone else does. It is said that this encourages a race to the courthouse so that the law firm which gets in first acquires a monopoly to represent anyone from the class. The class can be an Australia-wide class, a state-wide class, or anyone who uses that particular product. In many instances, world-wide class actions have been filed.

Adequate control of class actions?

The Australian position

There are provisions in the Federal Court of Australia Act 1976 designed to provide for mechanisms of judicial control and accountability, giving judges control over the conduct of the proceedings. In the United States context, certification is required before you can bring the case, although that is not the case in Australia. Class members are notified, although often the notice is a public notice rather than individual notice. If class members do not want to participate they can opt out, and if they want to intervene they can come forward. Settlements cannot be implemented without approval of the court.

Are those mechanisms working satisfactorily? That is an interesting question. The Law Reform Commission (LRC) has recently produced a report reviewing the operation of the class action provisions since they came into force in March 1992. The LRC found there was little, if any, evidence of unmeritorious claims or of a litigation explosion. The LRC found that most cases were conducted by lawyers on a speculative basis. In other words, lawyers representing the class were acting in circumstances where they only expected to be paid at the conclusion of the case if successful. The LRC accepted that this could often be a good thing, because lawyers have an interest in screening out unmeritorious cases. Defence lawyers, however, have the luxury of being paid win, lose or draw.

In the period from 1992 to 1997 in the first period of operation of the legislation, only 30 cases were filed. According to the LRC’s report, in the last period since 1997 only a further 20 actions were filed. As stated earlier, however, over 90 have been identified.

The LRC focused on some of the procedural and ethical issues that it thought needed attention: the problem with competing representation, the problem with notice, the problem of how you come up with acceptable terms of settlement, the problem that the court has in trying to assess damages for a large class and problems in relation to costs. The Commission also addressed a number of ethical concerns, such as where respondents try to contact class members in attempting to settle claims or to persuade them to opt out of the class. Problems of representation were also identified, such as potential conflicts within the class, and defining the nature of the duty imposed on the lawyer where the lawyer is representing a large number of people. Lawyers traditionally had duties defined by reference to individual clients, but interesting issues emerge regarding the nature of their professional and ethical obligations to larger amorphous masses, where there has been no personal contact, and where there may be potential scope for conflict of interest amongst members of the class.

The LRC made a number of recommendations, such as drafting a practice note for lawyers, changing the Federal Court rules to deal with certain additional aspects, amending the Act to require class closure before judgment and to enable the court to approve fee arrangements. The LRC also recommended that ethical rules be amended to include express reference to the roles and responsibilities of lawyers where there are multiple plaintiffs. None of those are particularly controversial, but one of the difficulties the Commission had is that there has been very little if any empirical research in Australia on class action litigation.

The situation in the United States

By way of contrast, in the United States, the Institute for Civil Justice has recently completed a study of ten class actions. That research addressed a number of issues in relation to the conduct of class actions before United States courts. The researchers looked at the role of class action lawyers in initiating litigation, the response of defendants to class actions brought against them, and a whole range of issues to do with the legal merits of the case such as the estimated losses recoverable and the benefits/costs to each of the parties.

In relation to the empirical research, the report concluded that:

the negotiated compensation amounts varied dramatically between cases;
in some cases the actual compensation was less than the amount that had been negotiated;
in certain categories of consumer litigation, there was a marked impact on defendants’ business practices as a result of class action litigation, which was positive;
lawyers' fees were only a modest share of the negotiated settlement.

The researchers went on to make a number of findings in relation to the transaction costs. They concluded that they could not quantify the total value of such transaction costs. In individual cases they varied from $1,000,000 in one case up to $1 billion in another case, but transaction costs (including the amount of money that defendants paid their own lawyers) remained outside their scrutiny.

The study concluded that whether the benefits outweighed the costs was ultimately a matter of judgment. The authors also concluded that the role of judges was critical to the cost-benefit ratio. Their bottom line conclusion was that policy makers ought to refocus the debate on proposals for better regulatory practices to achieve a better balance between public and private gains.

That policy review was conducted in the context of various proposals made in the United States for class action reform. It has been suggested that there should be a cost-benefit test that needs to be satisfied before you can commence a class action. It has also been suggested that class actions should be opt-in rather than opt-out, so that only those who genuinely want to participate can do so. The authors of this particular report were wary of that approach, because, as they point out, there is considerable body of social science research which shows that there is a major difference between active and passive assent. In other words, when you ask people to take positive steps to indicate their agreement, you get a different response from certain groups of society. You cannot always assume that passive non-response amounts to consent. That research suggests that members of minorities and low-income earners may be disproportionally affected under an opt-in rather than an opt-out regime. That is, you are less likely to get certain sectors opting-in for a whole variety of reasons, part of which may have to do with lack of knowledge, cultural issues and a whole variety of other complex phenomena. Also, they decided that if you reduce financial incentives, then that would discourage actions. This may be beneficial, but of course that depends on whether you think class actions are a good or a bad thing.

The authors of the study went on to consider further policy options, including prohibiting settlement classes, broadening US Federal Court jurisdiction, prohibiting mass tort class actions, increasing judicial regulation as well as a variety of legislative measures that are currently under consideration in the United States. They decided that the solution to all of these problems was not to fundamentally change the nature of class actions but to change the way in which judges regulate them, to increase judicial resources and to open up class action practices to greater public scrutiny so there is a greater degree of transparency. As a result, some of the collusive settlement arrangements were less likely to occur, or if they did continue to occur, were more likely to be exposed to public scrutiny.

They concluded, and I think this is the conclusion one could confidently adopt in Australia, that class actions are likely to continue and to remain the subject of controversy. The solutions that had been debated at a political level are unlikely to resolve the disagreement at the heart of the class action controversy. However, the suggested changes which these writers have identified would go a long way, in their opinion, towards ensuring that the public goals of damages class actions are not overwhelmed by the private interests of lawyers and of litigants.

International class actions

The only other topic I want to touch on is the problem of participants in multinational class actions, which has been occurring with increasing regularity. In the Bjork-Shiley heart valve litigation, Australians were included in the international class. Our firm’s involvement was initially to oppose the settlement that was being put forward in the United States because it provided inadequate settlement benefits for Australian members of the class. The judge before whom we appeared in the United States rejected the settlement originally proposed. A much more favourable settlement was eventually negotiated with the defendant. In that litigation, as in many others, those settlements were initially negotiated by US lawyers who had filed class actions on behalf of everyone in the world, but in fact represented predominantly American victims. Interestingly, they had retainer agreements with American victims. These agreements gave them a direct pecuniary interest in the damages recoverable by certain sectors of the class (i.e. Americans), rather than other sectors of the class whom they had purported to represent (i.e. people from countries other than the United States).

That particular problem surfaced in the breast implant litigation. We opposed the settlement that Dow Corning sought judicial approval of because it provided inadequate compensation for Australian women. That was another settlement negotiated by American lawyers representing predominantly domestic US breast implant claimants. Our objection was that Australian women under the terms of that settlement only get 60 percent of the total benefits payable to domestic US claimants for the same injuries. Our further objection was that these were already reduced benefits which were far less than women would get if they took their case to court and succeeded. We said Australian women should not get a double discount just because they happened to come from Australia. However we were slightly better off than many other countries, where the same settlement provided that women from various other jurisdictions would only get 35 percent of the total benefits payable to domestic US claimants.

Those problems highlight the obvious conflict of interest issues, where you have lawyers who are also class counsel filing the class actions. In the Dow Corning bankruptcy proceedings, lawyers were appearing as representatives of all claimants worldwide. However, they negotiated settlement benefits which provided for different levels of compensation for women from different countries, over the objection of lawyers directly representing such women. There are obvious difficulties where people who have an interest in the outcome of the case are making allocation decisions about which sections of the class should get which benefits, particularly when they have a direct pecuniary interest in the benefits payable to their own clients.

Notwithstanding the problems and difficulties which I have referred to, the class action, where properly utilised, provides an effective and cost effective means of access to justice for many people.


[1] Author’s note: this case has now been settled and the settlement has been approved by the Federal Court.

[2] [1999] FCA 1377; (1999) 166 ALR 743.

[3] Author’s note: the Full Court handed down its judgment in Femcare v Bright on 19 April 2000, which unanimously upheld the constitutionality of Part IVA. Femcare is seeking leave to appeal from this decision to the High Court.

[4] [2000] FCA 229 (13 March 2000)

[5] DR Hensler et al., Executive summary of Class Action Dilemmas: pursuing public goals for private gain. Rand Institute for Civil Justice, 2000, p.3. This summary is also found at http://www.rand.org/publications/MR/MR969.1.pdf

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