Welcome to the Q4 2013 issue of Class Action, our final issue before the release of our Year In Review report.
 
In this edition:
  • Mandi Jacobson and Peta Stevenson consider the dismissal of the class action brought by abalone licence holders against the Victorian government;
  • Hugh Atkin reviews the latest judgment in the GPT class action, in which the Federal Court disallowed approximately $770k in legal fees and disbursements which Slater & Gordon had sought to claim from the settlement fund; and
  • Wilson Antoon looks at the recent failed attempt to reconstitute proceedings against Bell Potter Securities Limited as a class action.

Recent judgments of note

In addition to the judgments that we consider in detail in this issue (outlined above), this quarter saw the Victorian Court of Appeal uphold the trial judge’s dismissal of the class action against the collapsed Timbercorp Group.  The Court of Appeal was unable to find any error in the trial judge’s conclusions, including the factual conclusion that neither of the plaintiff witnesses actually relied on the product disclosure statement that was allegedly misleading.

A judgment in the Kilmore Black Saturday bushfire class action was delivered in October 2013 in which the Supreme Court of Victoria found that one of the defendants, SPI Electricity Pty Ltd, had unlawfully accessed landowners’ properties on multiple occasions in order to obtain evidence for the class action. The Court ultimately decided, however, that the evidence obtained should not be excluded on that basis.  In that action, the Court has also delivered judgment dismissing a relatively late application by SPI for security for its costs.

Each of these judgments will be considered in our third Year in Review report, to be released in the first quarter of 2014.

In the market place 

In this quarter, new actions have reportedly been commenced against Leighton Holdings and Treasury Wines Estate, with Leighton Holdings now facing two class actions, one led by Maurice Blackburn and the other by Melbourne-based solicitor Mark Elliot.  This quarter also saw class actions commenced against Cash Converters in relation to excessive fees and interest on short term loans and Macquarie Bank in relation to its bid to seize control of assets relating to collapsed Tasmanian timber company Gunns (in administration).

Further potential class actions have also been mooted, including against mining contractor Forge Group following a significant fall in share price and against the Federal Government in relation to an alleged promise given to childcare centres for a grant to increase staff wages.  Queensland flood victims are also poised to commence a class action in early 2014 in relation to the operation of Wivenhoe and Somerset Dams, following confirmation from IMF (now renamed Bentham IMF) that it will fund the class action.

A number of class actions reached provisional or final settlements in this quarter:

  • a conditional settlement of $89 million has been reached in the thalidomide class action with drug distributor Diageo.  The drug’s manufacturer Grunenthal was not required to contribute and the class action will be discontinued after the settlement is finalised.
  • Bentham IMF announced that a settlement has been approved with Lehman Brothers Australia Ltd (in liquidation) which will resolve the class action and discontinue the appeal.  The outstanding claims will be submitted to a claims resolution process, expected to generate a further $85 million for class members.  From those distributions, Bentham IMF expects to derive between $30 and $40 million in revenue.
  • finally, on 9 December, the Federal Court approved the settlement of the class action commenced against two pharmaceutical companies relating to alleged side effects of the Parkinson’s drug Permax, the terms of the settlement remaining confidential.  A related action against a third pharmaceutical company in relation to a similar drug remains on foot.

The election of a new government in September has seen a flurry of lobbying and public relations efforts from litigation funders, business groups and law firms alike.  At issue is the future direction of litigation funding and class actions with the new Attorney-General indicating that regulation of funders may be on the cards.  The competing positions can be seen clearly here in the various submissions made to the Productivity Commission’s inquiry into access to justice.

As mentioned above, leading litigation funder IMF has re-branded itself Bentham IMF, the move being prompted by the company’s international expansion and the name being chosen in honour of Jeremy Bentham, one of the first proponents of litigation funding.  Somewhat ironically, Bentham’s advocacy of litigation funding was part of his broader defence of usury – arguing that no person of free mind should be prevented (out of some misplaced paternalistic notion) from obtaining credit on such terms as they may see fit.  One can only speculate as to what Bentham IMF’s namesake would have made of the bank fees class action, in which Bentham IMF is seeking to set aside fees and charges paid freely under agreements voluntarily entered into by customers.

In addition, our watch list for the next quarter includes:

  • the hearing of the bank fees class action against ANZ, which commenced in the Federal Court on 2 December 2013;
  • the second application for settlement approval in the Storm Financial class action, which was heard by the trial judge on 12 and 13 December 2013.  This follows ASIC’s successful appeal to the Full Court against approval of the first settlement;
  • an interlocutory injunction application in the Treasury Wines Estates class action against lawyer Mark Elliot, who is running the class action (which may be heard prior to Christmas); and
  • the ongoing trial in the Kilmore Black Saturday bushfire class action, which is in the midst of expert evidence and is scheduled to run until March 2014.

For more information about the members of our Class Actions & Regulatory Investigations team, click here.