The past financial year saw 54 class actions filed in Australia — the lowest number since 2017/2018, a new report shows.
The class action number is down by almost 20 per cent on the previous year, but the proportion of class actions launched by shareholders increased in 2021/2022, according to the law firm review, released Thursday.
Securities class actions comprised 24 per cent of the overall figure, up from 12 per cent the previous period, when 64 class actions were filed, the report said.
The Victoria Supreme Court, which allows for plaintiffs lawyers to earn a percentage of the proceeds of a class action, became the “jurisdiction of choice” for securities class action, it said. Thirteen of the 54 class actions were shareholder claims against companies, including a2 Milk, Beach Energy and Nuix. More than 60 per cent were filed in Victoria.
Consumer and employment class actions, and group proceedings against the government – which made up the bulk of the remaining class actions – all decreased in number the past year, according to King & Wood Mallesons.
Four class action law firms – Shine Lawyers, Slater & Gordon, Gordon Legal and Phi Finney McDonald – were the busiest, filing at least five new actions each.
The number of class actions involving a litigation funder remained steady over the past financial year, at 24, although the percentage of third party-funded class actions has dropped from 74 per cent four years ago to 44 per cent in 2021/2022. Funders Omni Bridgeway and Woodsford Litigation financed a total of 11 new class actions between them.
The Federal Court remains the most popular forum for class actions. Thirty-four class actions were filed in the Victoria and NSW registries of the court. Eleven class actions were brought in the Victoria Supreme Court, and four were lodged in the NSW Supreme Court.
At least 12 class action settlements were approved in 2021/2022, including the $125 million Crown Resorts shareholder class action settlement, the $98 million settlement of the 7-Eleven franchisee class action, and the $56 million settlement in the superannuation fee class action against Colonial First State.
Disputes over cryptocurrency are emerging as a new focus of class actions in Australia, according to the report, with several filed in the past six to 12 months, including a case against Qoin and BTX Exchange.
The activity in the US, where investor-led class actions over cryptocurrencies are now the most frequently filed class actions, could be predictive of the near future here, according to KWM.
“The US class actions give some indication of the causes of action that may be pursued in Australia, at least as long as Australian regulators take a similar ‘stop-start’ approach to their US counterparts in how they categorise and regulate crypto products,” the report said.
“Lawsuits that have been filed in Australia to date demonstrate an appetite for bringing cryptocurrency claims in Australia, even against entities that are headquartered overseas.”
Climate change class actions are expected to increase, the report said, but success in establishing the existence of a novel duty of care has been mixed.
“Efforts to establish new duties, and push the boundaries of existing duties of care, are likely to continue. Class actions are likely to be directed at imposing obligations to mitigate greenhouse gas emissions and/or harm arising from climate change, which can significantly disrupt business operations,” the report said.