Welcome to Class Action Update, our first issue for 2016.
Since our last update, we have seen a significant amount of activity, with a large number of potential claims under investigation and several new litigation funders funding Australian class actions.
In this edition:
- Emma White and Justin McDonnell provide an update on the way in which Courts are dealing with competing class actions;
- Chris Murphy, Liam Burgess and Moira Saville consider the strike-out of the class action commenced against ASIC for alleged negligent conduct and misfeasance in public office in relation to its investigation of Storm Financial.
In the market place:
A significant number of potential class actions have been mooted since our last Update, including in relation to:
- alleged drip pricing by Jetstar and Virgin, following on from recent penalties imposed by the Federal Court, proposed by Bannister Law (which recently commenced two consumer protection class actions against international car manufacturers, arising from the use of alleged “defeat devices” in vehicles);
- Commonwealth Bank’s insurance arm CommInsure by customers who have had their claims rejected;
- a possible claim by affected investors in relation to the $10 billion Pearls Group Indian Ponzi scam;
- contaminated land, including in relation to properties near Oakey in Queensland and Williamstown in NSW;
- a possible action on behalf of people who as children and adolescents were prescribed the anti-depressant drug Paroxetine, commonly known as Aropax in Australia;
- a potential class action against the NSW government and the Murray Darling Basin Authority resulting from water shortages; and
- alleged continuous disclosure failures by Slater & Gordon, with both Maurice Blackburn and ACA Lawyers calling shareholders to register their interest.
The proposed actions against Slater & Gordon are notable not only for their number but also for the involvement of new litigation funders: while the action being investigated by Maurice Blackburn has not been announced to involve a third party litigation funder, the investigation by ACA is funded by London-based Woodsford Litigation Funding and Australian listed entity JustKapital Litigation Partners.
We have also seen at least three new class actions commenced, including in relation to:
- advertising claims by the makers of Nurofen;
- alleged misrepresentations made in relation to opportunities for further training and education in the Royal Australian Navy; and
- a new action filed in relation to the collapse of Sherwin Financial, which has obtained litigation funding from UK-based Vannin Capital (with a separate action also mooted by a second firm).
Further, this quarter we saw:
- final approval of the confidential settlement in the class action commenced by the City of Swan on behalf of 90 or so local councils, churches and charities against certain McGraw Hill companies (the owner of Standard & Poor’s), the shareholder class action against directors and officers of Gunns, and the action by investors in the failed property investment group Australian Capital Reserve;
- conditional settlements in the class actions against Newcrest alleging breach of continuous disclosure requirements in relation to its gold production forecasts, against Downer in relation to the Waratah train project, in one of the two class actions filed against Endeavour Energy in relation to the Winmalee bushfire (with proceedings discontinued against one of the two defendants in the second class action), against NAB in relation to claims for repayment of certain exception fees, and against DePuy for alleged defective hip devices ($250 million settlement);
- the investigation discontinued into a potential action by residents whose properties flooded when the gates of Callide Dam opened automatically during Cyclone Marcia in 2015;
- the trial in the Banksia class action, which was set to begin in April 2016, being vacated - now scheduled for April 2017; and
- as noted in the articles in this Update, the strike-out of the statement of claim in a class action against ASIC and the failure of the class action against Pizza Hut.
Our watch list for the quarter ahead includes judgment in the High Court appeal of the bank fees class action against ANZ (which was heard on 4 February 2016), the hearing of the equine influenza and Oz Minerals class actions (both listed to commence on 6 June 2016) and, with the upcoming election, any commitments that are made by either side of politics to promote the Access to Justice reforms recommended by the Productivity Commission.
As part of its implementation of the National Court Framework (read our earlier article here), the Federal Court has released a draft Class Actions Practice Note and has sought feedback on its contents.
The proposed draft covers a number of areas, including:
- the commencement of proceedings;
- case management, with:
- the introduction of a two-judge case management / hearing approach, with designated Case Management and Trial Judges; and
- the creation of a “Class Actions Registrar” role to assist in the case management of certain aspects of class actions;
- disclosure (including disclosure of cost agreements and litigation funding agreements);
- communications with class members;
- trial of common questions;
- settlement; and
- judicial supervision of deductions for legal costs or litigation funding charges.
The draft practice note also provides sample opt out notices and disclosure of class member legal costs / litigation funding terms.
The Court’s consultation on the draft practice note is continuing, and we expect the Class Actions Practice Note will be issued in the next quarter, together with other proposed practice notes under the National Court Framework. We will keep you updated.
We hope you find this edition of our Class Action Update informative, and look forward to bringing you our 2015/16 Class Actions Year in Review report in July.
The Australian Government has released a public discussion paper on the possibility of introducing a scheme of Deferred Prosecution Agreements in Australia. The paper calls for submissions on whether such agreements should be introduced and if so, how the scheme should be structured.
Natalie Caton from our Brisbane office, in collaboration with Dorothy Murray and colleagues in London and Beijing, has written a piece in our regular Red Tape publication looking at how regulatory investigations into corruption may be only the beginning of a much longer (and more expensive) story that may involve both individual and class actions.
Our In Competition blog features a post about the launch of the UK’s first opt-out class action, following recent changes to the country’s competition litigation laws.