COMPETING CLASS ACTIONS IN AUSTRALIA – OVERVIEW AND SUGGESTIONS FOR REFORM
The number of class actions in Australia continues to rise. Notably, this includes ‘competing’ class actions (CCAs), where separate but related proceedings either have the same underlying facts (but different class members) or have overlapping class members, or, alternatively, where a near-identical proceeding is commenced after a forerunner proceeding has been decided.
CCAs are concerning for a number of reasons and the fact that they are fuelled by competition between plaintiff law firms and litigation funding firms feeds into the broader jurisprudential issues for consideration. The problem is heightened in Australia because there is no requirement that claims be judicially certified to be brought as class actions (as in the US and UK).
Mechanisms exist for the courts to address CCAs; however, a cohesive position has yet to emerge.
Issues
First, CCAs may place an unfair burden on defendants who need to expend considerable time and costs defending essentially the same claims on multiple fronts. It is also an issue for insurers, in terms of pricing risk, and so on.
Furthermore, CCAs have the potential to erode the efficiency of the court process, which is at odds with the overarching purpose of Australian courts’ civil procedure rules, as set out in, for example, section 37M of the Federal Court of Australia Act 1976 (Cth) to facilitate the resolution of disputes “as quickly, inexpensively and efficiently as possible”.
CCAs also have the potential to result in conflicting judicial outcomes. They may pose a barrier to settlement, for example, a defendant will be wary of settling a forerunner class action if others are waiting in the wings.
Oct-Dec 2017 issue
Clifford Chance