find the latest legal job
Part Time Risk & Compliance Officer
Category: Other | Location: Brisbane QLD 4000
· Brisbane City · Flexible Part Time Hours
View details
Infrastructure Lawyer/SA
Category: Construction Law | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Global elite law firm · Dedicated Infrastructure team
View details
Property Lawyer
Category: Property Law | Location: All Melbourne VIC
· 12 Month Contract · Diverse Work
View details
Family Lawyer
Category: Family Law | Location: Eastern Suburbs Melbourne VIC
· Boutique Firm · Great Reputation
View details
Infrastructure Lawyers
Category: Construction Law | Location: All Perth WA
· We'd be particularly interested to hear from you if you were a lawyer who knows your way around the infrastructure and energy sectors.
View details
Corporate counsel battles rise in class actions

Corporate counsel battles rise in class actions

Corporate counsel in Australia has the constant cloud of potential class actions hanging over their heads, largely due to a growth in litigation funding.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

CORPORATE counsel in Australia has the constant cloud of potential class actions hanging over their heads, largely due to a growth in litigation funding.

Australia has a specific regime supporting class actions leading to "significant concern" among in-house lawyers, reveals the survey of 374 corporate counsel across more than 20 industries, done by law firm Mallesons Stephen Jaques in partnership with general counsel at NAB, AMP, Wesfarmers and Westfield.

Although class actions represent less than 1 per cent of all Federal Court proceedings, corporate counsel see them as a massive risk to their organisations.

Twenty-seven per cent of survey respondents said class actions were an issue for their organisation in the previous 12 months.

The rise of litigation funding is significant, according to the report, given the high degree of concern that class actions have generated for corporate counsel.

Six ASX listed litigation funders are active in the Australian market, and the number of plaintiff law firms is on the rise, with a number of firms announcing that they are investigating potential class actions. Corporate counsel are increasingly exposed to the strategies of funders in defending class actions.

Australia has had a specific regime supporting class action proceedings since 1992, and since then there has been a steady use of the class action framework with Australia seen as having a plaintiff- friendly regime compared to many other countries.

IMF Australia resolved seven matters in the 2009-10 year, produce a net profit of $16.8m before tax. The firm expects to have resolve as many as 14 matters by the end of the 2010-11 tax year.

Funded class actions have resulted in some significant settlements for group members, the report states, such as the Sons of Gwalia Ltd action which settled for in excess of $100m. The proceedings against Aristocrat Leisure Ltd resulted in the largest class action settlement to date of $144.5m.32.

However, unfunded actions have also been successful, such as the May 2011 settlement of the Amcor/Visy class action for $95 million.

Class actions are a concern to corporate counsel not only because of the possibility of liability and the reputation of the organisation, but also because of the costs of defending a class action. In approving the recent settlement of the Amcor/Visy cartel class action, the judge expressed concern at the $25 million in legal costs forming part of the settlement.

Class actions have been largely been launched by shareholders based on the failure to comply with continuous disclosure obligations, such as OZ Minerals and Sigma Pharmaceuticals.

Australia has also seen significant class actions as a result of investigations by the ACCC, such as the Visy/ Amcor cartel, and ASIC, such as Nufarm. Also, there have been actions regarding mass torts and product liability.

However, the report states, shareholders and litigation funders now use class actions as a form of de facto enforcement, whether or not the regulator acts.

As the regime enables group members to take the benefit of the cost and other pressures that class actions place on defendants to settle, without having to make any outlay, the report predicts class actions will remain attractive for individual and institutional group members alike and so continue to raise concerns for corporate counsel.

Corporate counsel battles rise in class actions
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Nov 17 2017
It's time for politicians to commit to eradicating domestic violence
The national shame of domestic violence cannot be left unaddressed, writes Christine Smyth. ...
Nov 16 2017
From lawyer in law firm to senior governance professional
Promoted by Governance Institute of Australia As a law graduate, Kate Griffiths never imagined...
marriage equality
Nov 16 2017
Legislation the next hurdle for marriage equality
Lawyers have underscored the importance of ensuring same-sex marriage legislation does not limit ant...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...