Clark, Stuart; Harris, Christina --- "The Push to Reform Class Action Procedure in Australia: Evolution or Revolution?" [2008] MelbULawRw 25; (2008) 32(3) Melbourne University Law Review 775
[*] BA, LLB (Hons) (Macq). Stuart Clark is the National Managing Partner of Clayton Utz’s Litigation and Dispute Resolution practice. He is based in the firm’s Sydney office. Mr Clark has led the defence of many significant class actions that have been litigated in Australia.
[†] BSc (Arch), LLB, BBuild (UNSW); PhD Candidate (Lond). Christina Harris is a Senior Associate at Clayton Utz in Sydney, where she has been a member of the firm’s Litigation and Dispute Resolution group since 2000. She has been involved in several class actions conducted in Australia. Ms Harris’s current doctoral research focuses on the operation of the class action procedure in the Federal Court of Australia, particularly in relation to the recent spate of securities class actions in that Court.
[1] Part IVA was inserted by the Federal Court of Australia Amendment Act 1991 (Cth) s 3, and came into effect on 4 March 1992: FCA Act note 1.
[2] See Law Reform Commission, Grouped Proceedings in the Federal Court, Report No 46 (1988) 34, 144–5, where the Commission also addresses some of these concerns. Note that at the time of the report, the ALRC was still called the ‘Law Reform Commission’. However, ‘ALRC’ is used in the text for the sake of familiarity.
[3] Ibid 64, 144–5.
[4] Sundeep Tucker, ‘Culture of Class Action Spreads across Australia’, Financial Times (London), 9 March 2006, 12.
[5] In the United States, this certification requirement is found in Federal Rules of Civil Procedure r 23(c)(1) (2007).
[6] For the US requirements, see Federal Rules of Civil Procedure r 23(b)(3) (2007). Australian law merely requires that there be at least one ‘substantial common issue of law or fact’: FCA Act s 33C(1)(c); Supreme Court Act 1986 (Vic) s 33C(1)(c) (‘VSC Act’).
[7] FCA Act ss 33Q–33R; VSC Act ss 33Q–33R.
[8] Bernard Murphy and Camille Cameron, ‘Access to Justice and the Evolution of Class Action Litigation in Australia’ [2006] MelbULawRw 14; (2006) 30 Melbourne University Law Review 399, 400. See also Peter Cashman, ‘Class Actions on Behalf of Clients: Is This Permissible?’ (2006) 80 Australian Law Journal 738; Bernard Murphy, ‘Current Trends & Issues in Australian Class Actions’ (Paper presented at the International Class Actions Conference, Maurice Blackburn Cashman, Melbourne, 1–2 December 2005) 10; Peter Gordon and Lisa Nichols, ‘The Class Struggle’ (2001) 48 Plaintiff 6, 8–9.
[9] See, eg, Vince Morabito and Judd Epstein, Attorney-General’s Law Reform Advisory Council, Class Actions in Victoria — Time for a New Approach, Project No 16 (1995) 88–90, cited in Peter Cashman, ‘Class Action Law Reform in Victoria: The Views of Stakeholders’ (Paper presented at the International Class Actions Conference, Maurice Blackburn, Sydney, 25–26 October 2007) 4; Peta Spender, ‘Securities Class Actions: A View from the Land of the Great White Shareholder’ (2002) 31 Common Law World Review 123, 128.
[10] VLRC, Civil Justice Review, Report No 14 (2008) 524–60, especially 559–60.
[11] Rachel Nickless, ‘Classy Partner Seeing Plenty of Action’, The Australian Financial Review (Sydney), 13 July 2007, 61.
[12] Janet Albrechtsen, Get Set for Class Action Chaos (15 July 2007) The Australian <http://
blogs.theaustralian.news.com.au/janetalbrechtsen/index.php/theaustralian/comments/get_set_for_class_action_chaos/>.
[13] Ibid.
[14] Murphy and Cameron, above n 8, 401.
[15] For example, the call for lawyers to be allowed to enter into contingency fee agreements: see below Part IV(D)(3)(b).
[16] Part IVA was inserted by the Federal Court of Australia Amendment Act 1991 (Cth) s 3, and came into effect on 4 March 1992: FCA Act note 1.
[17] Courts and Tribunals Legislation (Miscellaneous Amendments) Act 2000 (Vic) s 2(2).
[18] Part 4A was inserted into the VSC Act by the Courts and Tribunals Legislation (Miscellaneous Amendments) Act 2000 (Vic) s 13. Part 4A replaced O 18A of the Supreme Court (General Civil Procedure) Rules 1996 (Vic): VSC Act s 33ZK. The order, while near-identical, was subject to an unsuccessful constitutional challenge: see Schutt Flying Academy (Australia) Pty Ltd v Mobil Oil Australia Ltd [2000] VSCA 103; (2000) 1 VR 545. The procedure was re-enacted as Part 4A to avoid any further challenges to the validity of the procedure contained in the court rules.
[19] See S Stuart Clark and Christina Harris, ‘Class Actions in Australia: (Still) a Work in Progress’ (2008) 31 Australian Bar Review 63, 71–85. The main features are: the threshold requirement that at least seven persons have claims against the defendant(s); the threshold requirement that the claims of all plaintiffs arise out of the same, similar or related circumstances; the threshold requirement that the claims of all plaintiffs give rise to at least one substantial issue of fact or law that is common to all plaintiffs; the opt out procedure; the identification of the plaintiff group; the rule that judgment in a class action binds all persons who are members of the group; the various costs rules; the statutory provisions in relation to terminating a class action proceeding; the rules with respect to settling or discontinuing a class action; and the obligation imposed upon plaintiffs to properly plead their case.
[20] For example, plaintiffs are referred to as applicants in the Federal Court, and defendants as respondents. Similarly, the persons on whose behalf class actions are brought are referred to as group members: see FCA Act s 33A.
[21] Both the federal and Victorian procedures have survived such challenges: see Femcare Ltd v Bright [2000] FCA 512; (2000) 100 FCR 331; Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1.
[22] ALRC, Managing Justice: A Review of the Federal Civil Justice System, Report No 89 (2000) 478 (‘Managing Justice Report’), quoting Neil Francey, New South Wales Bar Association, Class Action (CLE Programme, Sydney, 9 February 1998) [20].
[23] See Cara Waters, ‘The New Class Conflict: The Efficacy of Class Actions as a Remedy for Minority Shareholders’ (2007) 25 Company and Securities Law Journal 300, 300–1, especially 301 fn 5.
[24] See Clark and Harris, above n 19, 69–71, 85–91. The main reasons for the slow commencement of Australian class actions are the capital constraints of Australia’s locally organised profession, a lack of imagination on the part of plaintiff lawyers (who initially followed the US lead), plaintiffs’ initial difficulties in complying with the requirements for commencing class actions and difficulty with the funding of class actions. The primary reasons for the recent increase in class actions are the modern tort law reforms, the rise of securities class actions, the emergence of commercial litigation funding and the rise of cartel class actions.
[25] Law Reform Commission, Grouped Proceedings Report, above n 2, 1.
[26] The report was tabled in 1988: Commonwealth, Parliamentary Debates, Senate, 13 December 1988, 4010 (Robert Ray, Manager of Government Business in the Senate). In 1989, Senator Janine Haines moved a private members’ Bill, the Federal Court (Grouped Proceedings) Bill 1989 (Cth), to enact the recommendations of the Grouped Proceedings Report. However, the Bill lapsed: see Commonwealth, Parliamentary Debates, Senate, 11 December 1989, 4233 (Janine Haines).
[27] Commonwealth, Parliamentary Debates, Senate, 13 November 1991, 3019 (Peter Durack).
[28] See Commonwealth, Parliamentary Debates, Senate, 12 September 1991, 1448 (Michael Tate, Minister for Justice and Consumer Affairs). For example, the legislature rejected the ALRC’s proposal to establish a class actions fund.
[29] Philip Morris (Australia) Ltd v Nixon [2000] FCA 229; (2000) 170 ALR 487, 511 (Sackville J) (‘Philip Morris’).
[30] This Bill became the Federal Court of Australia Amendment Act 1991 (Cth).
[31] Commonwealth, Parliamentary Debates, House of Representatives, 14 November 1991, 3174–5 (Michael Duffy, Attorney‑General); Commonwealth, Parliamentary Debates, Senate, 12 September 1991, 1447–8 (Michael Tate, Minister for Justice and Consumer Affairs). Cf Victoria, Parliamentary Debates, Legislative Council, 4 October 2000, 429, 431 (Marsha Thomson, Minister for Small Business).
[32] See Law Reform Commission, Grouped Proceedings Report, above n 2, 10.
[33] Ibid 10 fn 7.
[34] In the second reading speech, the Attorney-General described ‘[t]he other main feature of the Bill [as] the comprehensive powers given to the Court to ensure that the proceedings are not abused’: Commonwealth, Parliamentary Debates, House of Representatives, 14 November 1991, 3175 (Michael Duffy, Attorney-General); Commonwealth, Parliamentary Debates, Senate, 12 September 1991, 1449 (Michael Tate, Minister for Justice and Consumer Affairs).
[35] Law Reform Commission, Grouped Proceedings Report, above n 2, 63–4.
[36] Ibid 2.
[37] Law Reform Commission, Grouped Proceedings in the Federal Court: Summary of Report and Draft Legislation (1988) 5 (‘Report Summary’).
[38] Law Reform Commission, Grouped Proceedings Report, above n 2, 10.
[39] Ibid 26.
[40] See FCA Act s 33E(1); VSC Act s 33E(1).
[41] FCA Act ss 33ZB(b), 33J; VSC Act ss 33ZB(b), 33J.
[42] VLRC, above n 10, 557 (Maurice Blackburn’s submissions to the VLRC), 559; Cashman, ‘Class Action Law Reform in Victoria’, above n 9, 4. See also Murphy and Cameron, above n 8,
418–20; Cashman, ‘Class Actions on Behalf of Clients’, above n 8; Peter Cashman, Class Action Law and Practice (2007) 197–223.
[43] On the one hand, these arrangements have been found to be impermissible: see Dorajay Pty Ltd v Aristocrat Leisure Ltd (2005) 147 FCR 394, 425–6, 431 (Stone J) (‘Aristocrat’); Rod Investments (Vic) Pty Ltd v Clark [2005] VSC 449 (Unreported, Hansen J, 18 November 2005) [39], [41]. On the other hand, other cases have allowed such an arrangement: see P Dawson Nominees Pty Ltd v Multiplex Ltd [2007] FCA 1061; (2007) 242 ALR 111, 115–16, 120, 126 (Finkelstein J) (‘Multiplex First Instance’).
[44] See Cashman, ‘Class Action Law Reform in Victoria’, above n 9, 1 (the Victorian Bar Association’s initial submission).
[45] Section 33C(1) of the FCA Act and the VSC Act provide that (as long as certain threshold criteria are met) a class action may be commenced by one or more group members ‘as representing some or all of them’ (emphasis added).
[46] See Aristocrat (2005) 147 FCR 394, 425–6, 431 (Stone J); Rod Investments (Vic) Pty Ltd v Clark [2005] VSC 449 (Unreported, Hansen J, 18 November 2005) [39], [41]; cf Multiplex First Instance [2007] FCA 1061; (2007) 242 ALR 111, 115–16, 120, 126 (Finkelstein J).
[47] Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd [2007] FCAFC 200; (2007) 164 FCR 275, 280, 282 (Lindgren J), 295, 297 (Jacobson J) (a case involving a group limited to those who retained a particular funder) (‘Multiplex Appeal’). Although distinguishing the case on the facts, the Court approved of the decision in Aristocrat (2005) 147 FCR 394, 431 (Stone J) (involving a group limited to clients of one law firm).
[48] Multiplex Appeal [2007] FCAFC 200; (2007) 164 FCR 275, 295, 297 (Jacobson J).
[49] Ibid 292 (Jacobson J). See also at 294, 300.
[50] FCA Act ss 33N(1)(a)–(d); VSC Act ss 33N(1)(a)–(d).
[51] Federal Court Rules 1979 (Cth) O 11 r 16; Court Procedure Rules 2006 (ACT) s 425; Uniform Civil Procedure Rules 2005 (NSW) r 14.28; Supreme Court Rules 1987 (NT) O 23 r 2; Uniform Civil Procedure Rules 1999 (Qld) r 171; Supreme Court Civil Rules 2006 (SA) r 104; Supreme Court Rules 2000 (Tas) r 259; Supreme Court (General Civil Procedure) Rules 1996 (Vic) O 23 r 2; Rules of the Supreme Court 1971 (WA) O 20 r 19.
[52] See, eg, Harrison v Lidoform Pty Ltd (Unreported, Federal Court of Australia, Hely J, 24 November 1998); Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 524–5 (Sackville J).
[53] Connell v Nevada Financial Group Pty Ltd (1996) 139 ALR 723, 728 (Drummond J).
[54] See, eg, Johnstone v HIH Insurance Ltd [2004] FCA 190 (Unreported, Tamberlin J, 5 March 2004); Dorajay Pty Ltd v Aristocrat Leisure Ltd [2004] FCA 634 (Unreported, Stone J, 20 May 2004); Guglielman v Trescowthick [2004] FCA 326; (2004) ATPR 41-995.
[55] See Philip Morris [2000] FCA 229; (2000) 170 ALR 487, especially 491 (Spender J), 492 (Hill J). Sackville J would have allowed the respondents to replead their case: at 525–6.
[56] This is the term used by Maurice Blackburn: see Cashman, ‘Class Action Law Reform in Victoria’, above n 9, 4; Murphy, above n 8, 23, 30.
[57] Cashman, ‘Class Action Law Reform in Victoria’, above n 9, 4.
[58] Murphy and Cameron, above n 8, 412. See also VLRC, above n 10, 557 (Maurice Blackburn’s submissions to the VLRC); Murphy, above n 8, 15–16, 30. See further Bright v Femcare Ltd [2002] FCAFC 243; (2002) 195 ALR 574, 607–8 (Finkelstein J); Gordon and Nichols, above n 8, 12–13; Patrick Over, ‘Representative Proceedings from the Plaintiff’s Perspective’ (Paper presented at the NSW Young Lawyers CLE Seminar, Sydney, 17 November 1999) 10.
[59] Murphy and Cameron, above n 8, 418. Cf Morabito and Epstein, above n 9, 60–1 (particularly advocating the removal of the termination powers in ss 33N(1)(b), (d)).
[60] Murphy and Cameron, above n 8, 416 (citations omitted).
[61] See Gary L Sasso, ‘Class Actions: De Minimis Curat Lex?’ (2005) 31(4) Litigation 16.
[62] VLRC, above n 10, 558 (Maurice Blackburn’s submissions to the VLRC), 559–60. See also Kim Parker, ‘Class Actions: The New Era of Cartel Class Actions in Australia’ (Paper presented at the International Class Actions Conference, Maurice Blackburn, Sydney, 25–26 October 2007) 7 <http://www.mauriceblackburn.com.au/news/newsletters/pdfs/KParker_paper.pdf> .
[64] Ibid 559–60.
[65] Ibid 560.
[66] See, eg, ibid 676–7; Murphy and Cameron, above n 8, 420–3, 432–4. See also Cashman, ‘Class Action Law Reform in Victoria’, above n 9, 5, 7 (submissions made to the VLRC by Maurice Blackburn and IMF (Australia) Ltd).
[67] FCA Act s 43(1A); VSC Act s 33ZD(b). Note that costs may be ordered against individual group members in respect of the determination of individual or subgroup issues relevant to those persons: FCA Act ss 33Q(3), 33R(2); VSC Act ss 33Q(3), 33R(2).
[68] Murphy and Cameron, above n 8, 411, referring to a recommendation to exclude the ‘costs follow the event’ rule in Victorian class actions made by Morabito and Epstein, above n 9. See also Spender, ‘Securities Class Actions’, above n 9, 144–5.
[69] Such a cap on costs is suggested by the VLRC in the context of a proposal for establishing a statutory ‘Justice Fund’ (discussed further below), which would provide financial assistance to the applicant and assume the applicant’s liability for adverse costs (limited to the amount of funding): VLRC, above n 10, 614–17. The proposed fund would have standing to apply to the court for an order limiting the applicant’s liability for the balance of any adverse costs: at 690–1. This proposal is akin to that effected by s 47 of the Legal Aid Commission Act 1979 (NSW). See also VLRC Civil Justice Enquiry, Summary of Draft Civil Justice Reform Proposals as at 28 June 2007: Exposure Draft for Comment (2007) 52–3 <http://www.lawreform.vic.gov.au/wps/
wcm/connect/Law+Reform/resources/file/eb4c700164031bf/Exposure%20Draft%20Proposals.
pdf>.
[70] See, eg, Ryan v Great Lakes Council (1998) 154 ALR 584; Johnstone v HIH Insurance Ltd [2004] FCA 190 (Unreported, Tamberlin J, 5 March 2004) [97]–[98] (application for security for costs premature); Milfull v Terranora Lakes Country Club Ltd (in liq) [2004] FCA 1637; (2004) 214 ALR 228, 229 (Kiefel J) (application for security for costs brought too late). See also Damian Grave and Ken Adams, Class Actions in Australia (2005) 254.
[71] See below Part IV(D) below.
[72] See, eg, Murphy and Cameron, above n 8, 420–2; Murphy, above n 8, 21–3.
[73] [2003] FCAFC 153; (2003) 130 FCR 317, 374–5 (Finkelstein J). See also at 349–50 (Carr J), 361–2 (Branson J).
[74] See FCA Act s 43(1A); VSC Act s 33ZD(b).
[75] Murphy and Cameron, above n 8, 421; Murphy, above n 8, 22.
[76] Murphy and Cameron, above n 8, 421. The authors challenge the assertion that impecunious persons are not intentionally chosen as representative applicants in Australian class actions: see below Part IV(D)(2). Indeed, the ALRC, following its review of the operation of the federal class action procedure in 2000, recommended (in ALRC, Managing Justice Report, above n 22, 34 (Recommendation 78)) that:
the Federal Court should consider drafting guidelines or a practice note, relating to the practices of lawyers and parties in representative proceedings, addressing in particular [among other issues] … the choice of the representative party, who should not be chosen primarily as a ‘person of straw’.
[77] Murphy and Cameron, above n 8, 421, 422.
[78] See, eg, Legal Profession Act 2006 (ACT) s 285; Legal Profession Act 2004 (NSW) s 325(1)(b); Legal Profession Act 2006 (NT) s 320(1); Legal Profession Act 2007 (Qld) s 325; Rules of Professional Conduct and Practice 2003 (SA) r 42; Legal Profession Act 2007 (Tas) s 309(1); Legal Profession Act 2004 (Vic) s 3.4.29(1)(b); Legal Profession Act 2008 (WA) s 285(1).
[79] The prohibition in every jurisdiction only extends to ‘law practices’: see the legislation cited in above n 78.
[80] Another private litigation funder, Hillcrest Litigation Services Ltd, is listed on the ASX: see Hillcrest Litigation Services Ltd <http://www.hillcrestlitigation.com.au> .
[81] Standing Committee of Attorneys-General, ‘Litigation Funding in Australia’ (Discussion Paper, 2006) 4 <http://www.lawlink.nsw.gov.au/lawlink/legislation_policy/ll_lpd.nsf/vwFiles/Litigation_Funding_Discussion_paper_May_06.doc/$file/Litigation_Funding_Discussion_paper_May
_06.doc>.
[82] In Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41; (2006) 229 CLR 386, on the question of litigation funding a 5:2 majority of the High Court affirmed the decision of the New South Wales Court of Appeal in Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203. In the Federal Court, see also QPSX Ltd v Ericsson Australia Pty Ltd [No 3] [2005] FCA 933; (2005) 219 ALR 1; J P Morgan Portfolio Services Ltd v Deloitte Touche Tohmatsu [2005] FCA 1640 (Unreported, Wilcox J, 16 November 2005). It should be noted that Wilcox J in this last case regarded Westpac, the funder, as ‘neither a trafficker in litigation nor a company that carries on the business of funding litigation, as in … Fostif and many of the other authorities considered in those cases’: at [53].
[83] See Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203, 227 (Mason P).
[84] See, eg, VLRC, above n 10, 622 (Maurice Blackburn’s proposals); Cashman, ‘Class Action Law Reform in Victoria’, above n 9, 7. See also Murphy and Cameron, above n 8, 439; VLRC, above n 10, 694.
[85] Legal Profession Act 2006 (ACT) s 284; Legal Profession Act 2004 (NSW) s 324; Legal Profession Act 2006 (NT) s 319; Legal Profession Act 2007 (Qld) s 324; Legal Profession Act 2007 (Tas) s 308; Legal Profession Act 2004 (Vic) s 3.4.28; Legal Profession Act 2008 (WA) s 284.
[86] See, eg, Legal Profession Act 2006 (ACT) s 284(4)(b); Legal Profession Act 2007 (Qld) s 324(4); Legal Profession Act 2007 (Tas) s 308(4)(b); Legal Profession Act 2004 (Vic) s 3.4.28(3); Legal Profession Act 2008 (WA) s 284(4)(b).
[87] See, eg, Legal Profession Act 2004 (NSW) s 324(1).
[88] VLRC, above n 10, 622 (Maurice Blackburn’s proposals); Cashman, ‘Class Action Law Reform in Victoria’, above n 9, 7. See also Murphy and Cameron, above n 8, 423.
[90] Ibid 690–1. The cap would be in place for the first five years of the Fund’s operation. Note that the VLRC’s original proposal was that the cap would apply at all times: VLRC Civil Justice Enquiry, above n 69, 52–3.
[91] VLRC, above n 10, 622, 690–1, 694.
[92] Ibid 615.
[93] FCA Act s 33C(1)(a); VSC Act s 33C(1)(a).
[94] [2000] FCA 229; (2000) 170 ALR 487, 520–1 (Sackville J). See also at 489 (Spender J), 491 (Hill J).
[95] King v GIO Australia Holdings Ltd [2000] FCA 617; (2000) 100 FCR 209, 220–1 (Moore J) (‘King v GIO (trial)’).
[96] King v GIO Australia Holdings Ltd [2000] FCA 1543 (Unreported, Wilcox, Lehane and Merkel JJ, 1 November 2000) [7] (Wilcox, Lehane and Merkel JJ) (‘King v GIO (appeal)’).
[97] [2003] FCAFC 153; (2003) 130 FCR 317, 344 (Carr J), 373–4 (Finkelstein J), cf 358–9 (Branson J, disagreeing on this point).
[98] Johnstone v HIH Insurance Ltd [2004] FCA 190 (Unreported, Tamberlin J, 5 March 2004) [38].
[99] Milfull v Terranora Lakes Country Club Ltd (in liq) [2004] FCA 1637; (2004) 214 ALR 228, 229 (Kiefel J).
[100] Guglielmin v Trescowthick [No 2] [2005] FCA 138; (2005) 220 ALR 515, 521–2 (Mansfield J).
[101] McBride v Monzie Pty Ltd [2007] FCA 1947; (2007) 164 FCR 559, 561 (Finkelstein J). It should be noted that Finkelstein J was part of the majority in Bray.
[102] Indeed, plaintiff lawyers point out that the prudent lawyer would advise their clients to expect a narrow reading of s 33C: see, eg, Murphy and Cameron, above n 8, 427; Murphy, above n 8, 27.
[103] Professor Rachael Mulheron also argues for a less strict requirement: see Rachael Mulheron, The Class Action in Common Law Legal Systems: A Comparative Perspective (2004) 163–4.
[104] See, eg, VLRC, above n 10, 530, 558 (Maurice Blackburn’s proposals).
[105] Ibid 529, 559. Litigation funder IMF (Australia) Ltd supports this proposal: at 530. See also Murphy and Cameron, above n 8, 426–7.
[106] FCA Act ss 33J(1), 33X(1)(a); VSC Act ss 33J(1), 33X(1)(a).
[107] The rules merely provide that the court may make orders ‘relating to the costs of notice’: FCA Act s 33Y(3)(d); VSC Act s 33Y(2)(d).
[108] Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2001] VSC 284 (Unreported, Gillard J, 17 August 2001) [19]–[20].
[109] FCA Act ss 33Y(2)–(5); VSC Act ss 33Y(1)–(3).
[110] King v GIO Australia Holdings Ltd [2000] FCA 1869 (Unreported, Moore J, 20 December 2000) [19]–[22] (‘King v GIO (form of opt out notice proceeding)’).
[111] See, eg, Darwalla Milling Co Pty Ltd v F Hoffmann-La Roche Ltd [2006] FCA 915 (Unreported, Jessup J, 18 July 2006) [17].
[112] See submissions made to the ALRC during its review of Part IVA in 2000: ALRC, Managing Justice Report, above n 22, 484.
[113] Murphy and Cameron, above n 8, 432; Murphy, above n 8, 29.
[114] Murphy and Cameron, above n 8, 432. See also Murphy, above n 8, 30.
[115] See, eg, Solicitors Rules — Revised Professional Conduct and Practice Rules 1995 (NSW) r 31.1. See also Re Orlov and Pursley [1995] 4 LPDR 5.
[116] See generally Stuart Clark, ‘Class Action Defendants Are Free to Communicate with Class Members’ (2002) 13 Australian Product Liability Reporter 33, 34–5; Brooke Davie, ‘Guidelines for Communications with Unrepresented Group Members’ (2002) 13 Australian Product Liability Reporter 89.
[117] Courtney v Medtel Pty Ltd [2002] FCA 957; (2002) 122 FCR 168, 183 (Sackville J). See also Courtney v Medtel Pty Ltd [2001] FCA 1365; (2001) 113 FCR 512, 523 (Stone J).
[118] King v AG Australia Holdings Ltd [2002] FCA 872; (2002) 121 FCR 480, 489 (Moore J) (‘King v GIO (communications application)’). See also Courtney v Medtel Pty Ltd [2002] FCA 957; (2002) 122 FCR 168, 183, 186 (Sackville J).
[119] See Davie, above n 116, 90.
[120] Murphy and Cameron, above n 8, 428–31, especially 431. See also Murphy, above n 8, 21 (arguing that ‘contact between respondents or their lawyers … with group members ought to be circumscribed to a greater extent’).
[121] See, eg, Aristocrat (2005) 147 FCR 394, 397 (Stone J) (the Aristocrat class action); Rod Investments (Vic) Pty Ltd v Clark [2005] VSC 449 (Unreported, Hansen J, 18 November 2005) [23]–[42] (the Media World class action); Multiplex Appeal [2007] FCAFC 200; (2007) 164 FCR 275, 280 (Lindgren J) (the Multiplex class action); Peter Hanne & Associates Pty Ltd v Village Life Ltd [2008] FCA 719 (Unreported, Jacobson J, 22 May 2008) [3] (the Village Life class action); Kirby v Centro Properties Ltd [2008] FCA 1505 (Unreported, Finkelstein J, 10 October 2008) [3] (the Centro shareholder class action); Maurice Blackburn, AWB Class Action (2007) <http://
www.mauriceblackburn.com.au/areas/class_actions/current/current_action_awb.asp> (the AWB class action).
[122] Multiplex Appeal [2007] FCAFC 200; (2007) 164 FCR 275, 292, 294, 300 (Jacobson J).
[123] In recommending an opt out procedure, the ALRC emphasised the importance of enhancing access to legal remedies by overcoming cost barriers and non-cost factors (for example, ignorance of rights, lack of knowledge of the law and fear of embarking on proceedings), and noted that the element of consent mandated by an opt in procedure may defeat this purpose and leave potential applicants with no means of obtaining legal redress: Law Reform Commission, Grouped Proceedings Report, above n 2, 50, 55. See also at 9–11, 34.
[124] Consider, for example, the opposition on the part of elements of the business community in the United Kingdom to the concept of an opt out class action system. The UK business community’s most recent such opposition has been in response to the recommendation of the Civil Justice Council (an advisory group to the UK Secretary of State for Constitutional Affairs) that courts should decide whether to adopt an opt in or opt out system on a case-by-case basis: Civil Justice Council, Improving Access to Justice through Collective Actions: Developing a More Efficient and Effective Procedure for Collective Actions — A Series of Recommendations to the Lord Chancellor (2008) 13–14 (Key Finding 9), 15 (Recommendation 3) <http://www.civil
justicecouncil.gov.uk/files/Improving_Access_to_Justice_through_Collective_Actions.pdf>. Arguments in support of an opt out class action procedure can be found at 67–90. See also
at 44–5 (noting businesses’ opposition to earlier proposals for an opt out procedure). The concerns raised by these businesses are similar to those raised in the Australian context: see Christopher Hodges, The Reform of Class and Representative Actions in European Legal Systems: A New Framework for Collective Redress in Europe (2008) ch 6.
[125] See Commonwealth, Parliamentary Debates, Senate, 12 September 1991, 1448 (Michael Tate, Minister for Justice and Consumer Affairs); Commonwealth, Parliamentary Debates, Senate, 13 November 1991, 3021–2 (Peter Durack).
[126] As Mulheron explains, the opt out class action procedure is clearly the preferred choice in modern common law systems including the US, Canada and Australia: Mulheron, The Class Action in Common Law Legal Systems, above n 103, 35. See also at 29, 34–8 (considering the advantages and disadvantages of an opt out procedure). The ALRC considered the relative advantages and disadvantages of opt out versus opt in procedures and recommended the former as the best way of achieving the policy goals of access to justice, reducing costs, increasing court efficiency and promoting consistency in dealing with multiple claims, provided that class members’ autonomy is not compromised by the opt out procedure, which does not require class members’ consent to commence a class action (that is, provided class members can elect to opt out of the action): Law Reform Commission, Grouped Proceedings Report, above n 2, ch 4 especially 50. See also at 26, 34.
[127] Maurice Dunlevy, ‘Centro Could Face a Second Class Action over Share Price Collapse’, The Australian (Sydney), 13 May 2008, 21.
[128] See Kirby v Centro Properties Ltd [2008] FCA 1505 (Unreported, Finkelstein J, 10 October 2008); Maurice Blackburn, Centro Class Action (2007) <http://www.mauriceblackburn.com.au/
areas/class_actions/current/Centro.asp>.
[129] See Kirby v Centro Properties Ltd [2008] FCA 1505 (Unreported, Finkelstein J, 10 October 2008); Slater & Gordon Lawyers, Centro Shareholder Actions (2007) <http://www.slatergordon.
com.au/pages/_class_actions_centro.aspx>.
[130] See Kirby v Centro Properties Ltd [2008] FCA 1505 (Unreported, Finkelstein J, 10 October 2008), especially [30]–[34], [37], [39]–[41].
[131] See Kirby v Centro Properties Ltd [No 2] [2008] FCA 1657 (Unreported, Finkelstein J, 14 November 2008). The class actions were referred to the Court’s List Manager for reassignment to another judge: at [23].
[132] Law Reform Commission, Grouped Proceedings Report, above n 2, 44.
[133] Law Reform Commission, Report Summary, above n 37, 9, 13. The ALRC also suggested that the respondent and potential group members be given the opportunity to apply for the inclusion of further group members, and that if the principal applicant failed to include such persons the court have power to separate the proceedings or appoint another person as principal applicant: see Law Reform Commission, Grouped Proceedings Report, above n 2, 66–7, 157 (proposed cl 14).
[134] ALRC, Managing Justice Report, above n 22, 480–1 (citations omitted).
[135] Ibid 482. Note that the ALRC’s concerns were directed to multiple class actions covering the same claims, whereas the Centro class actions (see Kirby v Centro Properties Ltd [2008] FCA 1505 (Unreported, Finkelstein J, 10 October 2008)) cover different group members’ claims. It is submitted, however, that both scenarios raise similar concerns of inefficiency and unfairness to respondents.
[136] Michael Legg, ‘Institutional Investors and Shareholder Class Actions: The Law and Economics of Participation’ (2007) 81 Australian Law Journal 478, 487 (citations omitted).
[137] Law Reform Commission, Grouped Proceedings Report, above n 2, 63; Law Reform Commission, Report Summary, above n 37, 8.
[138] Rachael Mulheron, ‘Justice Enhanced: Framing an Opt-Out Class Action for England’ (2007) 70 Modern Law Review 550, 568.
[139] See, eg, Vince Morabito, ‘Group Litigation in Australia — “Desperately Seeking” Effective Class Action Regimes: National Report for Australia’ (Paper presented at the Globalization of Class Actions Conference, Oxford University, 13–14 December 2007) 30–2; Vince Morabito, ‘The Federal Court of Australia’s Power to Terminate Properly Instituted Class Actions’ (2004) 42 Osgoode Hall Law Journal 473, 491–2.
[140] As grounds of termination the ALRC recommended situations where a class action is ‘inappropriate’, such as where it may be more economical to conduct separate proceedings or where the cost of identifying group members and distributing any monetary relief may be excessive: Law Reform Commission, Grouped Proceedings Report, above n 2, 64. To this the legislature added: where the relief sought can be obtained other than by class action (FCA Act s 33N(1)(b)); where the class action will not provide an efficient and effective means of dealing with group members’ claims (FCA Act s 33N(1)(c)); and where it is otherwise inappropriate that the claims be pursued by means of a class action (FCA Act s 33N(1)(d)).
[141] Commonwealth, Parliamentary Debates, Senate, 12 September 1991, 1449 (Michael Tate, Minister for Justice and Consumer Affairs).
[142] Morabito, ‘Group Litigation in Australia’, above n 139, 31. See also Murphy and Cameron, above n 8, 416–18.
[143] This reversal of onus was highlighted by the ALRC: see Law Reform Commission, Grouped Proceedings Report, above n 2, 63.
[144] See Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255, 267 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ).
[145] Ibid 268.
[146] Ibid 266. See also King v GIO (trial) [2000] FCA 617; (2000) 100 FCR 209, 228 (Moore J).
[147] Wong v Silkfield Pty Ltd [1999] HCA 48; (1999) 199 CLR 255, 268 (Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ). In this regard, see also Milfull v Terranora Lakes Country Club Ltd (1998) ATPR 41‑642, 41 105 (Kiefel J); Guglielmin v Trescowthick [No 2] [2005] FCA 138; (2005) 220 ALR 515,
532–3 (Mansfield J).
[148] Comprehensive data showing the outcome of s 33N applications are not available. However, some examples of unsuccessful s 33N strike-outs include: McBride v Monzie Pty Ltd [2007] FCA 1947; (2007) 164 FCR 559, 564–5 (Finkelstein J); Multiplex First Instance [2007] FCA 1061; (2007) 242 ALR 111; Multiplex Appeal [2007] FCAFC 200; (2007) 164 FCR 275. Examples of successful s 33N strike-outs include: Crandell v Servier Laboratories (Aust) Pty Ltd [1999] FCA 1461 (Unreported, Sackville J, 25 October 1999) [1] (the Fen‑Phen class action, where the applicant ultimately consented to a s 33N order); Aristocrat (2005) 147 FCR 394; Rod Investments (Vic) Pty Ltd v Clark [2005] VSC 449 (Unreported, Hansen J, 18 November 2005). For an early example of a successful s 33N strike‑out, see Gold Coast City Council v Pioneer Concrete (Qld) Pty Ltd (1997) ATPR 41‑585, 44 084 (the cartel class action).
[149] Justice K E Lindgren, ‘Class Actions and Access to Justice’ (Keynote address delivered at the International Class Actions Conference, Maurice Blackburn, Sydney, 25–26 October 2007) 2–3. The ALRC has also emphasised the importance of clarity and precision in drafting the applicant’s pleadings: see ALRC, Managing Justice Report, above n 22, 482–3.
[150] Bright v Femcare Ltd [2002] FCAFC 243; (2002) 195 ALR 574, 607–8.
[151] Murphy and Cameron, above n 8, 415.
[152] Lindgren, above n 149, 3.
[153] Law Reform Commission, Grouped Proceedings Report, above n 2, 63.
[154] As discussed above in Part III(E), for example, Mulheron is also critical of the current requirement, in cases involving multiple respondents, that each group member have a claim against each respondent: Mulheron, The Class Action in Common Law Legal Systems, above n 103, 150–7, 163–4.
[155] Ibid 27.
[156] Mulheron, ‘Justice Enhanced’, above n 138, 568.
[157] See, eg, the following US legislation: Federal Rules of Civil Procedure r 23(c)(1) (2007). It is useful to compare the following Canadian legislation from British Columbia and Ontario, respectively: Class Proceedings Act, RSBC 1996, c 50, s 2; Class Proceedings Act, SO 1992, c 6, ss 2, 5.
[158] The high watermark of this process must have been the tobacco class action, where the statement of claim came back before the Court on multiple occasions before the matter was finally brought to an end: see Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 491 (Spender J), 492 (Hill J), 526 (Sackville J).
[159] As noted in Mulheron, The Class Action in Common Law Legal Systems, above n 103, 26. See, eg, Alberta Law Reform Institute, Class Actions, Final Report No 85 (2000) 79–80; Lord Woolf, Access to Justice: Final Report to the Lord Chancellor on the Civil Justice System in England and Wales (1996) ch 17 (paras [16], [24]–[26]), recommendation 214 <http://www.dca.gov.uk/
civil/final/contents.htm>; Manitoba Law Reform Commission, Class Proceedings, Report No 100 (1999) 42–3; Scottish Law Commission, Multi-Party Actions, Report No 154 (1996)
25–6; South African Law Commission, The Recognition of Class Actions and Public Interest Actions in South African Law, Project No 88 (1998) 38–40.
[160] VLRC, above n 10, 531–3.
[161] Ibid 531–2.
[162] Law Reform Commission, Grouped Proceedings Report, above n 2, 100. In a similar fashion, the ALRC determined that after aggregate assessment of damages, ‘the respondent has no further liability, even if the amount was too little to meet all identified claims.’ This is in contrast to the position in Canada, where courts are statutorily empowered to grant cy‑près type remedies in class actions, and in the US, where such remedies have sometimes been judicially sanctioned, although not uniformly: see VLRC, above n 10, 533–7, especially 533–4. Some of the relevant Canadian statutes include: Class Actions Act, SS 2001, c C-12.01, s 37; Class Proceedings Act, SA 2003, c C‑16.5, s 34; Class Proceedings Act, RSBC 1996, c 50, s 34; Class Proceedings Act, SNB 2006, c C‑5.15, s 36; Class Proceedings Act, SO 1992, c 6, s 26. With respect to the US, the VLRC cites the following US cases: Superior Beverage Co Inc v Owens‑Illinois Inc, 827 F Supp 477 (ND Ill, 1993); Re Motorsports Merchandise Antitrust Litigation, 160 F Supp 2d 1392 (ND Ga, 2001).
[163] Law Reform Commission, Report Summary, above n 37, 3–5; Law Reform Commission, Grouped Proceedings Report, above n 2, 10, 26.
[164] Law Reform Commission, Report Summary, above n 37, 3.
[165] This maxim translates as ‘the law does not concern itself with trifles’.
[166] Law Reform Commission, Grouped Proceedings Report, above n 2, 10, 26.
[167] Ibid 142.
[168] Michael Pelly, ‘Revenge of the Shareholders’, The Sydney Morning Herald (Sydney), 10 February 2006, 9. Cf Murphy and Cameron, above n 8, 404–5.
[169] See Peta Spender, ‘The Class Action as Sheriff: Private Law Enforcement and Remedial Roulette’ (ANU College of Law Research Paper No 08-24, The Australian National University, 2008).
[170] Mulheron, The Class Action in Common Law Legal Systems, above n 103, 64. At 65 fn 137, Mulheron cites cases where the courts found that the behaviour modification goal was insufficient on its own to justify class certification: Kumar v Mutual Life Assurance Co of Canada (2003) 226 DLR (4th) 112, 128–9 (Rosenberg JA for the Court); Joanisse v Barker (Unreported, Ontario Superior Court of Justice, Cullity J, 5 August 2003) [57].
[171] See Deborah R Hensler et al, RAND Institute for Civil Justice, Class Actions Dilemmas: Pursuing Public Goals for Private Gain — Executive Summary (1999) 9 <http://www.rand.org/
publications/MR/MR969.1/MR969.1.pdf>, cited in Spender, ‘The Class Action as Sheriff’, above n 169, 6.
[172] Of course, at some point the quantum of damages may result in action being taken against those responsible. However, this is unlikely in many instances where a cy-près type remedy might be sought.
[173] See Sasso, above n 61, 18.
[174] For example, in the settlement of one US class action, a manufacturer agreed to redesign its product (which it had undertaken to do independently of the lawsuit), class members received no compensation, and class counsel received almost $20 million in fees. Gary Sasso also refers to a US class action against a bank where class members actually lost money because the court allowed the bank to deduct $8.5 million in attorneys’ fees from the accounts of the 300 000 class members who joined the settlement. These class members were also denied a rehearing: Kamilewicz v Bank of Boston Corporation[1996] USCA7 1306; , 100 F 3d 1348 (7th Cir, 1996).
[175] Class Action Fairness Act of 2005, 28 USC §1712(d) (2006).
[176] Class Action Fairness Act of 2005, 28 USC §1712(a) (2006).
[177] See, eg, Parker, above n 62, 7.
[178] Mulheron, The Class Action in Common Law Legal Systems, above n 103, 429, quoting Herbert Newberg and Alba Conte, Newberg on Class Actions (4th ed, 2002) 28.
[179] Mulheron, The Class Action in Common Law Legal Systems, above n 103, 428, citing Class Proceedings Act, SO 1992, c 6, ss 26(4), (6). See also Mulheron at 426–32.
[180] VLRC, above n 10, 560. The VLRC would restrict the right of appeal to one based on the principles in House v The King (1936) 55 CLR 499: at 554.
[181] VLRC, above n 10, 552. It is useful to compare the discretion conferred on the Court by s 33N(1) — which, it will be recalled (see above Part II(B)), has been criticised by some as being too wide — with that proposed by the VLRC in respect of cy-près remedies. The latter is guided only by the Court’s assessment of what it ‘sees fit’ to do: at 559–60. On the other hand, the former is guided by specific criteria: it must be in the interests of justice to strike out the representative form of an action because of certain, specified circumstances making a class action inappropriate (ss 33N(1)(a)–(c)) or because of any other reason making it inappropriate to proceed in class form (s 33N(1)(d)).
[183] VLRC Civil Justice Enquiry, above n 69, 53.
[184] Murphy and Cameron, above n 8, 410.
[185] Law Reform Commission, Report Summary, above n 37, 9, 11.
[186] Law Reform Commission, Grouped Proceedings Report, above n 2, 142. See also at 144–5. As the ALRC acknowledged, this is because retaining the usual costs rule means that applicants are liable for higher costs than if they bring individual proceedings: at 130.
[187] Grave and Adams, above n 70, 139–40.
[188] The authors acknowledge that there is considerable support for this view amongst both commentators and law reform bodies: see, eg, Murphy and Cameron, above n 8, 411, referring to a recommendation to exclude the ‘costs follow the event’ rule in Victorian class actions made by Morabito and Epstein, above n 9; Manitoba Law Reform Commission, above n 159, 75; Alberta Law Reform Institute, above n 159, 144; Vince Morabito, ‘Federal Class Actions, Contingency Fees and the Rules Governing Litigation Costs’ [1995] MonashULawRw 10; (1995) 21 Monash University Law Review 231, 232–3; cf Mulheron, The Class Action in Common Law Legal Systems, above n 103, 445.
[189] For example, where an impecunious person is selected as the representative party to protect wealthy group members from adverse costs orders: Grave and Adams, above n 70, 127, 138.
[190] It has been suggested that the policy reasoning behind the costs immunity of group members does not apply to a limited group where group members positively elect to join proceedings, such that those group members should be liable for any adverse costs orders: see Michael Legg, Vanessa McBride and S Stuart Clark, ‘The New South Wales Representative Proceeding: A Class Action Half‑Way House’ (2008) 12 University of Western Sydney Law Review (forthcoming).
[191] As held in Bray [2003] FCAFC 153; (2003) 130 FCR 317, 374–5 (Finkelstein J). See also at 349–50 (Carr J), 361–2 (Branson J).
[192] FCA Act s 43(1A); VSC Act s 33ZD(b).
[193] FCA Act s 33ZG(c)(v).
[194] Bray [2003] FCAFC 153; (2003) 130 FCR 317, 348 (Carr J). See also at 361–2 (Branson J), 374 (Finkelstein J).
[195] Contra Murphy and Cameron, above n 8, 420–1.
[196] Bray [2003] FCAFC 153; (2003) 130 FCR 317, 348 (Carr J), 375 (Finkelstein J).
[197] Murphy and Cameron, above n 8, 421.
[198] Cook v Pasminco Ltd [No 2] [2000] FCA 1819; (2000) 107 FCR 44, 50 (Lindgren J).
[199] See Tobacco Control Coalition Inc v Philip Morris (Australia) Ltd [2000] FCA 1004 (Unreported, Wilcox J, 14 September 2001) [2], [4], [69], [74].
[200] Nendy Enterprises Pty Ltd v New Holland Australia Pty Ltd [2001] FCA 582 (Unreported, Whitlam J, 9 November 2001) [4], [7].
[201] ALRC, Managing Justice Report, above n 22, 492 (Recommendation 78).
[202] Law Reform Commission, Report Summary, above n 37, 11–12. See also Law Reform Commission, Grouped Proceedings Report, above n 2, 118. This is effectively an uplift or ‘no win–no pay’ agreement, although the ALRC called it a ‘contingent’ fee agreement, the contingency being success in the case.
[203] Law Reform Commission, Grouped Proceedings Report, above n 2, 113–14.
[204] Ibid 121; ALRC, Managing Justice Report, above n 22, 489, 491.
[205] Law Reform Commission, Grouped Proceedings Report, above n 2, 123–4; Law Reform Commission, Report Summary, above n 37, 12. The ALRC envisaged that this fund would be established under statute and funded by parliamentary appropriations, and possibly also by way of interest or unclaimed residue from aggregate awards: see Law Reform Commission, Grouped Proceedings Report, above n 2, 128.
[206] The authors’ analysis of shareholder class actions commenced in Australia reveals that most of these actions are being funded by IMF (Australia) Ltd. This was confirmed in conversation with a partner at Slater & Gordon on 6 February 2009. See IMF (Australia) Ltd’s webpage <http://www.imf.com.au/caseoverview.asp> for a list of actions, including class actions, funded by the company.
[207] See Stuart Clark and Michael Legg, ‘The Continued Rise of Litigation Funding’ (2006) 22(9) Company Director 34, 36; Stuart Clark, ‘Fostif Decision Opens Contingency‑Fee Can of Worms’, The Australian Financial Review (Sydney), 29 September 2006, 58.
[208] According to the Standing Committee of Attorneys-General, the lack of such regulation is problematic because funded parties ‘may not always have legal knowledge, and may not be well placed to negotiate a funding contract, to assess the terms they agree to, or to retain adequate control over the proceedings’, and ‘existing consumer protections may be insufficient’ to protect funded parties: Standing Committee of Attorneys-General, above n 81, 8.
[209] The regulation of litigation funding is an issue currently before the Standing Committee of Attorneys‑General: see Attorney‑General for Australia, Australian Financial Review Legal Conference (2008) <http://www.attorneygeneral.gov.au/www/ministers/RobertMc.nsf/Page/
Speeches_2008_17June2008-AustralianFinancialReviewLegalConference>.
[210] The only protection available to group members is that the court will consider the issue of plaintiff lawyers’ costs in the context of determining whether to approve any settlement. This is due to the fact that a class action cannot be settled without approval of the court: FCA Act s 33V. The court has power to make any (costs) order it thinks necessary: FCA Act s 33ZF. Further protection is afforded by the rights a group member has to seek a review or taxation of costs (FCA Act s 53AB) — all of which is effectively long after the event.
[211] See, eg, Mulheron, The Class Action in Common Law Legal Systems, above n 103, 468–71.
[212] Australian litigation funding agreements provide for the benefit of such a costs order to be assigned to the funder. For example, cl 1 of the sample IMF (Australia) Ltd multi‑party Investigation, Management & Funding Agreement, available from <http://www.imf.com.au/forms/
IMF_FundingAgreement_Multiparty080806_sample.pdf>, defines resolution sum as:
the amount or amounts of money or the value of goods, services or benefits for which the Claims are Settled, or for which Judgment is given of for which a proof of debt is admitted in favour of the Applicant in any Proceeding and includes any interest and costs recovered pursuant to a Costs Order or by agreement.
The Agreement then directs that all resolution sums be paid into the trust account to be held for the benefit of IMF (Australia) Ltd: cl 9.1(b).
[213] For example, US company Commonwealth Legal Funding LLC is providing funding in Kirby v Centro Properties Ltd [2008] FCA 1505 (Unreported, Finkelstein J, 10 October 2008): see Slater & Gordon Lawyers, ‘US Funder for Centro Class Action’ (Press Release, 22 April 2008) <http://www.slatergordon.com.au/docs/MediaReleases/Centro%20Properties%20Group.
pdf>. Canadian funder International Litigation Funding Partners Inc is funding the group members in the Multiplex litigation: Multiplex First Instance [2007] FCA 1061; (2007) 242 ALR 111, 112, 119 (Finkelstein J); Multiplex Appeal [2007] FCAFC 200; (2007) 164 FCR 275, 280 (Lindgren J), 286 (Jacobson J). This class action is ongoing in the Federal Court.
[214] A lawyer from that firm stated that the initial public offering was effectively asking the public ‘to invest in [the firm’s] capacity to keep making money’: see Shaun Drummond, ‘Familiar Waters for ABL in Public Float’, Lawyers Weekly (online), 17 May 2007 <http://www.
lawyersweekly.com.au/articles/Familiar-waters-for-ABL-in-public-float_z69565.htm>.
[215] VLRC, above n 10, 615–16, 676.
[216] Ibid 524–8, 556.
[217] Boeing Co v Van Gemert[1980] USSC 17; , 444 US 472, 478–9 (Powell J for Burger, Brennan, Stewart, White, Marshall, Blackmun, Powell and Stevens JJ) (1980).
[218] See further Legg, above n 136, 488.
[219] Law Reform Commission, Grouped Proceedings Report, above n 2, 113–14, 121.
[220] Ibid 119–20.
[221] FCA Act s 33ZJ; VSC Act s 33ZJ.
[222] Section 33ZJ can only be invoked where the court has made an award of damages: FCA Act s 33ZJ(1); VSC Act s 33ZJ(1). This is a so-called ‘glitch’ that has attracted criticism from some plaintiff lawyers: see, eg, VLRC, above n 10, 677.
[223] Deborah R Hensler et al, Class Actions Dilemmas: Pursuing Public Goals for Private Gain (2000) 77–9.
[224] For example, the ALRC proposal was that fee agreements only allow an uplift fee: Law Reform Commission, Grouped Proceedings Report, above n 2, 123, 181. In contrast, fees under the US common fund are calculated either on a contingency basis (that is, a percentage of damages of settlement monies) or pursuant to the ‘lodestar’ method (based on the work actually done with a multiplier): see Mulheron, The Class Action in Common Law Legal Systems, above n 103,
469–70.
[225] This is in contrast to the position in the US and Canada, where fee agreements with class representatives and class members must be approved by the court: see Mulheron, The Class Action in Common Law Legal Systems, above n 103, 477–9. In Canada, this is mandated by the Class Proceedings Act, RSBC 1996, c 50, ss 19(6)(e), 38(1), (2); Class Proceedings Act, SO 1992, c 6, ss 17(6)(d), 32(1), (2). In the US, see Mills v Electric Auto‑Lite Co[1970] USSC 14; , 396 US 375,
391–2 (Harlan J for the Court) (1970). See also Boeing Co v Van Gemert[1980] USSC 17; , 444 US 472, 478 (Powell J for the Court) (1980).
[226] See FCA Act s 33V; VSC Act s 33V.
[227] See Law Reform Commission, Grouped Proceedings Report, above n 2, 121; ALRC, Managing Justice Report, above n 22, 489, 491, 493 (Recommendation 80). Approval should ideally occur before the opt out date to enable group members to make an informed choice about whether to remain in the class: ALRC, Managing Justice Report, above n 22, 490.
[229] See Mallesons Stephen Jaques, Class Actions Bulletin (July 2008) <http://www.mallesons.com/
publications/update-combine.cfm?id=1414302>.
[230] Similar submissions were made to the VLRC by various respondent law firms in opposition to the proposed fund: VLRC, above n 10, 621.
[231] Ibid 615–16, 676. The VLRC, however, takes issue with litigation funders limiting participation in class actions to group members who enter funding agreements with them, because this compromises the opt out system.
[232] See submission made to the VLRC by Corrs Chambers Westgarth in opposition to the proposed Fund: ibid 621.
[233] Ibid 691.
[234] Ibid 690–1.
[235] See Legal Aid Commission Act 1979 (NSW) s 47.
[236] Denzin v The Nutrasweet Co [1999] NSWSC 106 (Unreported, Bruce J, 22 February 1999). One of the authors was the solicitor for the defendants.
[237] These first instance verdicts were subsequently set aside and new trials ordered after counsel for the defendants conceded that the reasons provided by the trial judge in his judgment were inadequate: see Moylan v The Nutrasweet Co [2000] NSWCA 337 (Unreported, Sheller, Beazley and Giles JJA, 24 November 2000) [15], [80] (Sheller JA). The term ‘quasi class action’ has been used to describe a procedure adopted to deal with mass tort claims prior to 1992. The Gravigard litigation was conducted by way of trying the cases of ‘lead plaintiffs’ whose claims were said to be ‘representative’ of the claims of some 265 other plaintiffs. It was hoped that the determination of the cases of the lead plaintiffs would resolve the claims of all.
[238] See above nn 94–102 and accompanying text.
[239] See, eg, Murphy and Cameron, above n 8, 425 fn 111, 426.
[240] Philip Morris [2000] FCA 229; (2000) 170 ALR 487, 514 (Sackville J) (emphasis in original).
[241] Ibid 511.
[242] Ibid 512.
[243] Bray [2003] FCAFC 153; (2003) 130 FCR 317, 373 (Finkelstein J).
[244] Ibid 345 (Carr J). See also at 344 (Carr J). Contra 358–9 (Branson J dissenting on this point).
[245] Law Reform Commission, Grouped Proceedings Report, above n 2, 57–60.
[246] Ibid 59.
[248] Ibid 530 (Clayton Utz’s submission to the VLRC).
[249] Federal Rules of Civil Procedure r 23(b)(3) (2007).
[250] The Federal Court faced this prospect in the first such case to proceed to trial, the Courtney v Medtel Pty Ltd litigation. The Court determined the claim of Mr Courtney and it was then left to the parties to resolve the balance of the class claims: Courtney v Medtel Pty Ltd [2003] FCA 36; (2003) 126 FCR 219.
[251] See, eg, Re Northern District of California, Dalkon Shield[1982] USCA9 1491; , 693 F 2d 847, 853 (Goodwin J) (9th Cir, 1982). See also the examples cited in Mulheron, The Class Action in Common Law Legal Systems, above n 103, 183 fn 113: Re American Medical Systems Inc[1996] USCA6 184; , 75 F 3d 1069,
1085–6 (Suhrheinrich J) (6th Cir, 1996); Valentino v Carter-Wallace Inc[1996] USCA9 3187; , 97 F 3d 1227, 1235 (Schroeder J) (9th Cir, 1996).
[252] ALRC, Managing Justice Report, above n 22, 484, 484 fn 288.
[253] Murphy and Cameron, above n 8, 432, citing: King v GIO (form of opt out notice proceeding) [2000] FCA 1869 (Unreported, Moore J, 20 December 2000); King v GIO Australia Holdings Ltd [2001] FCA 270 (Unreported, Sackville, Hely and Stone JJ, 20 March 2001) (‘King v GIO (form of opt out notice appeal)’); Petrusevski v Bulldogs Rugby League Club Ltd [2003] FCA 1056 (Unreported, Sackville J, 3 October 2003).
[254] See King v GIO (form of opt out notice proceeding) [2000] FCA 1869 (Unreported, Moore J, 20 December 2000) [15]–[18]; revd [2001] FCA 270 (Unreported, Sackville, Hely and Stone JJ, March 2001) [13]–[15].
[255] See Petrusevski v Bulldogs Rugby League Club Ltd [2003] FCA 1056 (Unreported, Sackville J, 3 October 2003) [10]–[11], [14]–[15].
[256] Murphy and Cameron, above n 8, 432.
[257] Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2001] VSC 284 (Unreported, Gillard J, 17 August 2001) [8].
[258] Ibid [2]–[8].
[259] Ibid [5].
[260] Ibid [8].
[261] Ibid [14], [19], [26]–[33].
[262] See, eg, Courtney v Medtel Pty Ltd [2001] FCA 1365; (2001) 113 FCR 512 (before opt out date), where orders were unsuccessfully sought precluding any further communications between the respondents and unrepresented group members; Courtney v Medtel Pty Ltd [2002] FCA 957; (2002) 122 FCR 168, 187–8 (Sackville J) (prior to the opt out procedure being completed), where the Court refused to prevent the respondents from communicating directly with unrepresented group members but directed the respondents to provide the applicant’s lawyers with a copy of the proposed communication 21 days prior to its dispatch.
[263] Courtney v Medtel Pty Ltd [2001] FCA 1365; (2001) 113 FCR 512.
[264] King v GIO (communications application) [2002] FCA 872; (2002) 121 FCR 480.
[265] Davie, above n 116, 89–90; Murphy and Cameron, above n 8, 429–31.
[266] See, eg, Courtney v Medtel Pty Ltd [No 5] [2004] FCA 1406; (2004) 212 ALR 311, 315–16, where the applicant’s lawyers received over $2 million in fees while the 482 group members only received between $375 and $8000 each in damages. See also Leonie Lamont, ‘Victims Get Slim Pickings as Lawyers Take $2m’, The Sydney Morning Herald (Sydney), 10 November 2004, 3.
[267] [2002] FCA 957; (2002) 122 FCR 168.
[268] Cf Law Reform Commission, Grouped Proceedings Report, above n 2, 91–2 (a group member is ‘capable of expressing an opinion which should be taken into account. … [A] group member should be able, at any stage before judgment is given, without leave, to settle the group member’s proceeding’).
[269] Under FCA Act ss 23, 33J, 33K, 33X; VSC Act ss 33J, 33K, 33X. See also Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2008] FCA 575 (Unreported, Tamberlin J, 29 April 2008) [9]–[11].
[270] Jarra Creek Central Packing Shed Pty Ltd v Amcor Ltd [2008] FCA 575 (Unreported, Tamberlin J, 29 April 2008) [16]–[19].
[271] Ibid [17]–[18].
[272] See, eg, Murphy and Cameron, above n 8, 400; Cashman, ‘Class Actions on Behalf of Clients’, above n 8; Spender, ‘Securities Class Actions’, above n 9, 128.
[273] For example, IMF (Australia) Ltd’s reported profit growth was 188%, equating to a net profit of $17.2 million in 2008. It is anticipating receiving some $36.5 million in profit from one case alone (the Aristocrat litigation), an amount so large that it will underwrite IMF (Australia) Ltd’s profits for the year: see IMF (Australia) Ltd, 2008 Annual Report (2008) 4, 14 <http://
www.imf.com.au/pdf/AnnualReport2008.pdf>; Chris Merritt, ‘Gloom Spells Boom for IMF’, The Weekend Australian (Sydney), 8 November 2008, 33.