Groups as Parties. Representative proceedings, group proceedings and class actions
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1 Groups as Parties Representative proceedings, group proceedings and class actions Rationale Facilitating access to justice by allowing the costs of litigating numerous small claims to be spread among a large group, where it would not be economical to proceed individually. Reduction of costs Efficient use of judicial resources ALRC reduce litigation costs to the individual enhance access to legal remedies promote efficiency in use of court resources ensure consistency in determination of common issues make the law more enforceable and effective Same Interest Representative Proceeding 18.01: This Order applies where numerous persons have the same interest in any proceeding 18.02: A proceeding may be commenced, and, unless the Court otherwise orders, continued, by or against any one or more persons having the same interest as representing some or all of them o Damages must be global Global figure Not available where parties seeking damages individually (personal remedy never have representative proceedings when damages are being sought, require separate assessment) Fletcher Moulton LJ in Markt v Knight Steamship (1910 Eng CA) o Separate Contracts okay (with standard form Ks) HC in Carnie v Esanda 1995 reversed the separate contracts, not damages (flexible rule of convenience, common right still exists farmers with separate but standard form Ks for loan repayments) no need to identify every member of the class, just identify class with sufficient particularity 34
2 Group Proceedings 1992-Part IVA Federal Court of Australia Act: representative proceedings o Representative party commencing party 2000-Part 4A Supreme Court Act (Vic): group proceedings o Pl commencing party This is allowed under Part 4A of the Supreme Court Act. 1. Commencement Requirements s 33C(1) A proceeding may be commenced where: a) 7 or more persons have claims against the same person, and b) the claims of all those persons are in respect of or arise out of the same, similar or related circumstances, and c) the claims of all those persons give rise to a substantial common issue of law or fact s 33C(2) Representative proceeding may be commenced whether or not: Damages are sought o Even if damages require individual assessment Relief is the same for each person Separate transactions are involved Previously per Sackville J, Philip Morris et al v Nixon (2000, FFC), each group member must have a claim against every respondent. (OLD) FACTS: o mass litigation against Aus tobacco industry, 60k people o didn t specify how each individual applicant had been affected by tobacco manufacturers' conduct, but instead looked at the overall effect of the conduct (broad canvas' approach). If the individual claims of each member of the represented group had to be pleaded by reference to specific dates and events, the representative procedure might well be rendered ineffective for the very kind of group claim it is intended to facilitate. In Vic, followed in Rod Investments v Adam Clark (2006 SCV). o Abolition recommended by VLRC o Mixed response among single judges in Fed Crt as to which approach is binding law New approach in the Federal Court, per Finkelstein J Bray v Hoffman-LaRoche (2003 FFC) reversed this, which was accepted in Cash Converters (Jacobson, Middleton & Gordon JJ). This rule goes against objectives (reducing legal costs, access to justice, undermines operation of the law, etc) Nothing in the language of 33C(1) to suggest separate proceedings Cash Converters International Ltd v Gray [2014] FCAFC 111: o If the usual requirements for joinder of parties are met, an applicant (being one of the seven or more persons with claims against on respondent) can join in the proceeding other respondents in respect of whom some group members have claims and some do not 35
3 Method of Commencement Application must (s33h): Describe or otherwise identify the group members to whom the proceeding relates; Specify the nature of the claims made on behalf of the group members and the relief claimed; and Specify the questions of law or fact common to the group members. Not necessary to name the members or specify the number in the group. Describing the group Examples: A v James Latham Peters & Ors o The Plaintiff on behalf of herself and all other women who: (a) between January 2008 and mid December 2009 underwent a procedure for termination of pregnancy at The Croydon Day Surgery and (b) for the purposes of the termination procedure at the Surgery were administered anaesthetic by D James Latham Peters, and (c) since undergoing the termination procedure at the Surgery have for the first time been diagnosed as having Hepatitis C or found to be carrying Hepatitis C antibodies. Rowe v Grunenthal o Pursuant to Part 4A of the Supreme Court Act 1986, the plaintiff commenced this proceeding (a group proceeding, or sometimes called a class action) on behalf of herself and others who were born in Australia between 1 January 1958 and 31 December 1970 who have suffered since birth from a congenital malformation & whose mothers, while pregnant with them, consumed &/or were administered thalidomide [subject to certain additional conditions]. P Dawson Nominees Pty Ltd v Brookfield Multiplex Limited (Fed Ct, VID 1380 of 2006) authorised closed class o This proceeding is commenced as a group proceeding pursuant to Part IVA of the Federal Court of Australia Act (Cth) by the Applicant on its own behalf and on behalf of other persons who: (a) at some time during the period between 2 August 2004 and 30 May 2005 acquired an interest in: (i) Multiplex Group stapled securities; or (ii) Multiplex SITES; (b) suffered loss and damage by or resulting from the conduct of the Defendants referred to below; and (c) have, as at the commencement of this proceeding entered a litigation funding agreement with International Litigation Funding Partners Inc. o similar to opt in agreement, not opt out: was challenged in FC, Finkelstein it s okay o growth of lit funding Eatock v Bolt (2011) 197 FCR 261; 283 ALR 505; [2011] FCA 1103 o Pat Eatock on her own behalf and on behalf of people like her who have fairer, rather than darker, skin and who by a combination of descent, self-identification and communal recognition are, and are recognised as, Aboriginal persons. 36
4 Opting out s33j(1): court must fix a date before which a group member may opt out of a representative proceeding. s33x(1): group members must be notified that the proceeding has been commenced, that they have the right to opt out, and the deadline for opting out. o s33x(2): can dispense of this requirement if no damages involved s33j(2): group member may opt out by written notice before the date so fixed. s33j(3): court can extend opt out period. s33j(4): hearing of matter must not commence before the opt out period has expired w/o leave. s33zf(1): court can make any order thought appropriate or necessary to ensure that justice is done Sub-groups & individual determination Question common to some but not all group members: s 33Q: sub-group Sub-group needs representative Or question that relates only to the claim of an individual group member: s 33R individual question Who pays? Costs can be ordered against the representative party (plaintiff) or the respondent (defendant), but not the group members o Federal Court Act: s 43(1A) o Supreme Court Act: s 33ZD Except for sub-groups ss 33Q & 33R Discontinuing Court may order the proceeding discontinue where: Group number drops below 7 (s33l) Cost of identifying group members & distributing proceeds would be excessive (s33m) Interests of justice require (eg separate proceedings more efficient) (s33n) o (a) the cost of group proceeding would be more than single proceedings o (b) relief sought can be obtained by means of proceeding other than a representative proceeding o (c) the representative proceeding won t be efficient o (d) the representative proceeding is otherwise inappropriate 37
5 Fees & Litigation Funding Conditional fee agreements with lawyers: payment of legal costs conditional upon successful outcome HC found that there is no general rule that litigation funding is an abuse of process (Campbell s Cash & Carry v Fostif (2006)) o Funding agreements may cover the costs of proceedings, with success fee of 25-40% Champerty & maintenance Abolished Prohibitions Common law doctrine prohiniting funding of lawsuit by others on basis that they would share in proceeds: buying into someone s lawsuit Abolished eg s 32 Wrongs Act 1958 & s 332A Crimes Act 1958 so now litigation funding is okay Controversy Croft J: The future of litigation funding in class actions: Should it be regulated? March 2015 Litigation funding in class actions, with a %-based commission, arose in 2001 presumably to fill the market gap caused by the prohibition against lawyers charging contingency fees. In any event, the use of litigation funders in class actions is now readily observable. There are plenty of proponents of litigation funding who argue it promotes access to justice by ensuring group members are able to afford legal costs. But there have also been plenty of critics who believe funders could inflame damages, suppress evidence, or even suborn witnesses. A subtler, and perhaps more profound concern, has been expressed that funders might promote litigation in circumstances where individual claimants lacked any interest in launching a claim, for example where the value of individual claims was insignificant. 38
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