The continued rise of state-based class action regimes

Over the three decades since the introduction of the Federal Court of Australia’s class action regime, class action litigation has become an increasingly prominent feature of the Australian legal landscape, write Damian Grave, Liz Poulos, Ante Golem, Leah Watterson and Ben Davis. 

Despite a number of recent reforms targeted at the Federal Court’s class action regime and litigation funders, the 12-month period between 4 March 2020 and 3 March 2021 saw the highest number of class actions commenced in Australia since the introduction of the Federal Court class action regime on 4 March 1992. 

Whilst the Federal Court continues to be the jurisdiction of choice for the majority of Australian class actions, the number of class actions being commenced under state-based class action regimes has continued to rise in recent years. 

Australia now has substantially similar class action regimes in four states, Victoria (2000), NSW (2011), Queensland (2017) and Tasmania (2019), with Western Australia’s Supreme Court procedure expected to be brought in line with Part IVA of the Federal Court of Australia Act 1976 (Cth) later this year following the passage of the Civil Procedure (Representative Proceedings) Bill 2021 through the Western Australian Legislative Assembly in October 2021.

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The most recent empirical data published by Monash University Professor Vince Morabito from May 2021 indicates that since the commencement of the federal regime in 1992 until 3 March 2021, there have been approximately 740 class actions filed in total across Australia; 541 of these class actions – approximately 73 per cent – were commenced under the federal class action procedure in the Federal Court of Australia. The remaining 199 class actions – approximately 27 per cent – have been commenced under one or more of the Victorian, NSW, or Queensland state-based class action regimes in the respective state supreme courts. 

Notably, in the four-year period between 4 March 2017 and 3 March 2021, the proportion of all class actions commenced under state-based class action regimes rose to approximately 39 per cent, with class actions filed in the state supreme courts representing 93 of the 238 class actions filed in that period. Of these 93 proceedings, 43 proceedings have been filed in the NSW Supreme Court, 40 proceedings have been filed in the Victorian Supreme Court, and 10 proceedings have been filed in the Queensland Supreme Court. 

As at 3 March 2021, no representative proceedings had yet been filed with the Tasmanian Supreme Court since the commencement of Part VII of the Supreme Court Civil Procedure Act 1932 (Tas) on 9 September 2019.

Although the state-based class action regimes are substantially similar to the Federal Court’s regime, differences between the state class action regimes and their federal counterpart are becoming more common. An early indication of the potential impact of recent contingency fees reforms in Victoria with the introduction of s33ZDA of the Supreme Court Act 1986 (Vic), which took effect from 1 July 2020, can be seen in Professor Morabito’s data, which indicates that, in the 12-month period between 4 March 2020 and 3 March 2021, of the 27 class actions commenced under state-based regimes, 22 (81 per cent) were commenced in the Victorian Supreme Court.   

The Supreme Court of Victoria has now considered these new contingency fee provisions on at least two occasions. In September 2021, the court determined, in the circumstances of the first case, that the plaintiffs had not established a sufficient basis for an order to be made. Most recently, in December 2021, the court was satisfied, in the circumstances of a different case, to make such an order. This is an area that will continue to further evolve following further judicial consideration. 

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We anticipate that the combination of the introduction of a new class action regime in Western Australia, and state-based reforms and developments, are likely to result in a continued rise in the proportion of class actions commenced under state-based regimes. 

Damian Grave, Liz Poulos and Ante Golem are partners, Leah Watterson is an executive counsel, and Ben Davis is a solicitor at Herbert Smith Freehills.

The continued rise of state-based class action regimes
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