Australia is a mature antitrust litigation jurisdiction.
In essence, there are three types of antitrust litigation in Australia:
The latter type of action is unusual in Australia, although there are presently two such actions on foot. The more usual form of antitrust litigation is enforcement action brought by the regulator.
Active Antitrust Litigation Cases
There are currently a number of active antitrust litigation cases before Australian courts for breach of the Australian Competition and Consumer Act 2010 (Cth) (CCA). These include:
Developments in Antitrust Litigation
In relation to regulator-instituted antitrust proceedings, the primary development is that ACCC is pushing hard for higher penalties for contraventions of the CCA. For some time the ACCC has sought to increase penalties both for their deterrent effect, and to be in greater alignment with the EU and USA where significant penalties are the norm. The ACCC has had some success with this strategy in recent years.
In this respect the ACCC also has the support of the newly elected Labor government which, in August 2022, released an exposure draft bill proposing an amendment to the CCA increasing maximum penalties from AUD10 million to AUD50 million, although no timing for any amendments to the CCA has yet been released. Labor’s rationale for the proposed change is to bring competition penalties under Australian law closer in line with penalties imposed in other jurisdictions. This proposal may have been spurred by an Organisation for Economic Co-operation and Development (OECD) report from 2018 which found that the average and maximum competition penalties in Australia are substantially lower than those in comparable jurisdictions. To be in line with those jurisdictions (such as Europe, the UK, Germany, Japan, Korea and the USA) the average Australian competition penalty would need to be multiplied by a factor of 12.
A further development has been in the context of investigations leading to proceedings, which is that cartel investigations are now initiated with view to criminal cartel proceedings being commenced. While criminal cartel offences were introduced in 2009, the change in the approach to enforcement activity has been particularly noticeable in the last several years, resulting in the ACCC more commonly referring matters to the CDPP. This strategy has not been entirely successful. In 2021 the CDPP lost the first contested criminal proceedings brought against a supplier of assistive technology products used in rehabilitation and age care. The proceedings, which proceeded by way of a trial before a jury, resulted in an acquittal on eight criminal charges for the accused, being the supplier, its CEO and a former employee.
In early 2022 a significant cartel matter brought against a number of banks in relation to a 2015 institutional share placement collapsed as the CDPP withdrew all charges. This decision was made following extended preliminary challenges to the formulation of the charges by the defendants.
The outcome of the ACCC's antitrust litigation has however assisted the ACCC in arguing for, and achieving, significant legislative and policy changes. Some of the ACCC's losses in the past decade have assisted in driving legislative reforms to the CCA. For example, the introduction of a new prohibition on anticompetitive concerted practices was partly fuelled by the ACCC's failure to win cases alleging cartel conduct given the technical requirements for demonstrating that such conduct had occurred in Australia.
The ACCC has significantly increased its investigative capabilities and resources in recent years, with dedicated investigators assigned to its criminal cartel branch, and sector-specific teams such as digital platforms, financial services with a focus on payment services, and construction.
The ACCC's investigation and enforcement activities have also been bolstered by the many wide-ranging market inquiries that it has been directed to conduct in recent years, for example in relation to digital platforms including, most recently, online market places, digital advertising services, financial institutions and foreign currency conversion, and electricity and gas markets. The ACCC has investigated and taken enforcement action (including commencing proceedings) for anti-competitive conduct uncovered during these inquiries. Most notably, the ACCC has commenced a number of actions against a digital platform as a direct result of its Digital Platforms Inquiry. In the context of the ongoing inquiry into the East Coast gas markets, it has indicated that it will take enforcement action for anticompetitive arrangements and has identified its most high-profile targets in a clear signal to those entities that certain behaviour is not sanctioned and may have enforcement consequences.
The ACCC is also increasingly investigating and taking action in industries and sectors that it has not traditionally focused on. The examples mentioned above (involving digital platforms and the financial services sector) are two such areas, but recently there have been others, such as the funeral services industry following review of the sector by the CMA in the United Kingdom. Enforcement priorities are amended on an annual basis.
While the move to remote hearings was prevalent due to the impacts of COVID-19, the courts are largely reversing that trend, with judges tending to request that hearings be in person again. While the use of some technology will probably continue given it provides greater flexibility, it is no longer expected to be the default position.
The legal basis for a claim for damages is based on breach of the CCA, being an Australian Commonwealth law, not a State law. The ACCC, may bring civil proceedings for breaches of the CCA. Criminal prosecutions for certain breaches of the cartel provisions are brought by the CDPP.
A person who has suffered loss or damage as a result of a contravention of the CCA may also bring stand-alone civil proceedings or a follow-on action against any person involved in the breach seeking damages under Section 82 of the CCA, or compensation orders under Section 87(1) of the CCA. A claim for compensation orders under Section 87(1) can also be made by a person who is likely to suffer loss or damage as a result of a breach. Follow-on actions may be brought by a single applicant or by a "class" of people who claim to have suffered loss or damage.
In the case of follow-on actions, applicants can rely on Section 83 of the CCA which provides that findings of fact, including admissions, made in prior proceedings (typically public enforcement actions by the ACCC) is prima facie evidence of that fact in future proceedings (eg, follow-on actions for damages or compensation orders).
The ACCC in civil cases, or the CDPP in criminal cartel cases, may also make an application for compensation orders under Section 87(1) of the CCA on behalf of such persons.
There are no specialist competition courts in Australia for antitrust litigation.
Subject to a small number of exceptions, the Federal Court of Australia (FCA), a Commonwealth Court of various divisions, has exclusive jurisdiction to hear civil and criminal matters in relation to the competition law provisions of the CCA. There are a number of judges of the FCA who are part of the Economic Regulation, Competition and Access sub-area and specialise in competition law matters. In the usual course, a matter commenced in the FCA that concerns a competition law issue will be allocated to a judge that has specialist expertise.
The Australian Competition Tribunal is a specialist competition tribunal that has jurisdiction to review certain decisions made by the ACCC; however, it does not have jurisdiction to determine litigious proceedings under the CCA.
The decisions of the ACCC are not binding on any Australian court.
The ACCC may, with leave of the court and subject to any conditions imposed by the court, intervene in any proceedings instituted under the CCA, including private proceedings. The ACCC has published guidance on intervention in private proceedings, which state that the ACCC will consider intervening if the case involves significant public interest, a construction of the Act in untested areas, or to clarify its operation and/or international conduct such as anticompetitive conduct and consumer exploitation on an international scale. The ACCC has sought to intervene in private litigation such as the misuse of market power proceedings commenced against an app store provider.
The burden of proof is generally on the party seeking to establish a contravention of competition laws (the ACCC, the CDPP or a private party).
The burden may shift to a defendant in some circumstances, such as where they seek to rely on a particular statutory defence (eg, the joint venture defence to cartel conduct under Section 45AO of the CCA).
For civil proceedings brought by the ACCC or private parties, the standard of proof is the "balance of probabilities". For criminal proceedings brought by the CDPP, the standard of proof is "beyond reasonable doubt".
There is, as yet, no statutory pass-on defence recognised under Australian competition laws.
Claims may be brought by direct and indirect purchasers provided that they are able to establish on the balance of probabilities that they have suffered, or are likely to suffer, loss or damage as a consequence of conduct contravening the CCA.
The duration of a competition law claim will depend on the nature and complexity of the case. These may include: the number of issues in contention, the extent and number of any interlocutory issues, the number of witnesses and experts, the extent of any discovery, whether the court orders any stay of the proceedings, and whether the case is subject to any appeals process.
For proceedings brought by ACCC, the typical duration of proceedings (assuming that the case runs to trial and does not settle before then) would be at least two to three years. Matters that settle before trial typically take about two years to conclude. That said, some cases run for considerably longer, for example the civil proceedings initiated by the ACCC in relation to the alleged high voltage cable cartel took nine years to conclude. Such cases should be considered as outliers. The only criminal cartel case to be contested was completed, including a jury trial, within 18 months.
Antitrust class actions have never been run to trial in Australia as they are either ongoing or have settled pretrial, making it hard to determine a typical timeframe. The two antitrust class actions that are currently on foot commenced in May 2019 and January 2021 respectively.
The concept of suspension pending an investigation is not relevant for Australia. The ACCC would only initiate proceedings once it had concluded its investigations, and private parties typically would not initiate follow-on proceedings until after any proceedings initiated by the ACCC have concluded (so that they can rely on findings of fact made in those primary proceedings).
While parties can apply for an order to stay proceedings, this is quite unusual and will generally only be granted by the court to allow proceedings to be managed in a different forum or to await the outcome of a proceeding in a different forum.
In Australia, there are statutory class action regimes in the FCA and the Supreme Courts of New South Wales, Victoria, Queensland and Tasmania, which are state courts. The courts in the other Australian States and Territories have limited provisions for group actions. There is presently a bill before the West Australian parliament that will seek to introduce a regime for representative proceedings modelled on Part IVA of the Federal Court of Australia Act 1976 (Cth). The bill is substantively consistent with the analogous provisions in other states.
Class Actions Regime
The class actions regime has been in force since 4 March 1992, with the relevant provisions of the regime outlined in Part IVA of the Federal Court of Australia Act 1976 (Cth) (Part IVA). Generally, a class action is commenced by a lead applicant or applicants on behalf of group members. However, there are federal legislative provisions that allow the ACCC to institute representative proceedings on behalf of a group.
For example, the ACCC may institute proceedings for breaches of federal anticompetitive statutory provisions on behalf of persons who have suffered, or are likely to suffer, loss or damage by reason of the contravening conduct. The ACCC can only pursue a representative proceeding on behalf of persons who have been identified and who have consented in writing to the action. A proceeding could involve claims of direct and indirect purchasers, but this will depend on the scope of the group member definition.
Part IVA provides for an "opt-out" system for class actions, which means that each person who is a member of the class (as defined in the originating process) is part of the proceeding unless they notify the court that they wish to opt out. Following commencement of a proceeding, the court will fix a date by which group members are required to opt out. If a group member does not opt out, they will be bound by any judgment of the court.
Class actions can be commenced by a single or multiple lead applicants (on behalf of group members) provided the following three requirements are met:
Typically a claim is commenced by a single representative of the class who becomes the named applicant.
There is no certification requirement and no other process by which a class action need be approved by the court before it can proceed. There is no imposed limit to the number of group members; the group definition determines the scope of the class. Provided an individual meets the group member definition and does not opt out, they will be a member of the class.
A class action cannot be settled without the approval of the court. Once an in-principle settlement is reached, group members are notified of the proposed settlement through a court-ordered notification process.
As part of the approval process, the court must assess whether the proposed settlement is a fair and reasonable outcome of the proceeding for the group members as a whole. The court is empowered to reject a proposed settlement if it is not satisfied that the proposed settlement meets that requirement. Evidence (including confidential exhibits) is put before the court as part of the approval process. Group members are entitled to object to the proposed settlement. However, if the court ultimately approves the settlement, all group members will be bound by it.
If a court is not satisfied that the proposed settlement is fair and reasonable, it can withhold approval and the representative action will proceed.
Strike Out of an Action
Australian courts have the power to strike out the whole or any part of a pleading if:
A pleading may tend to prejudice, embarrass or delay the fair trial of the proceedings if it contains allegations which are vague or imprecise, such that the other party cannot plead to such allegations specifically, or if it contains allegations that are irrelevant, unnecessary or scandalous.
Summary Judgment or Dismissal
Australian courts also have the power to enter summary judgment for the plaintiff and summary dismissal for the defendant. An application may be made in relation to the proceedings as a whole, or particular claims in the proceeding. For a summary judgment to be awarded, the plaintiff must establish that there is:
For a summary dismissal to be issued the defendant must demonstrate that:
Orders for strike-out, summary judgments and summary dismissal are very seldom made in antitrust litigation cases. On very few occasions, pleadings have been struck out for being poorly articulated; however in practice, courts tend to allow plaintiffs to withdraw and resubmit a revised claim. This can occur multiple times.
The jurisdiction of the CCA applies to conduct in Australia by Australian corporations, foreign corporations, and individuals.
In addition to this, certain provisions of the CCA have extraterritorial operation, including restrictive trade practices (which include the cartel provisions, anticompetitive contracts, arrangements or understandings, and concerted practices) and Australian Consumer Law (ACL) (Schedule 2 of the CCA, other than the country of origin representations provisions). These parts of the CCA extend to conduct engaged in outside Australia by Australian citizens, Australian residents or corporations that are incorporated in Australia or carrying on business within Australia.
The CCA further extends the prohibitions on exclusive dealing and resale price maintenance to any person engaging in conduct outside Australia in relation to them supplying goods or services to persons within Australia.
The CCA also extends the prohibitions on misuse of market power to conduct in respect of markets in Australia and New Zealand and conduct by New Zealand corporations, residents and corporations carrying on business in New Zealand. These provisions are included because of the close economic ties between Australia and New Zealand.
Damages under the CCA
A damages claim may be commenced within six years of the day on which the cause of action that relates to the conduct accrued.
Civil Pecuniary Penalties
Proceedings in which the ACCC is seeking pecuniary penalties must be brought within six years of the date of contravention.
There is no limitation period for criminal conduct but proceedings may only be brought for conduct occurring after 24 July 2009, which is the date on which the criminal cartel offences included in the CCA came into effect.
In Australia, the requirement to identify and enumerate documents relevant to the proceedings is known as "discovery", whereas "inspection" refers to the requirement to produce copies of those documents to the other parties.
A document is generally considered to be any record of information, regardless of the method of storage. Therefore a document may be digital or analogue, visual or auditory, or written.
There is some variation in the threshold approach to discovery and applicable procedure depending on the jurisdiction within Australia.
The traditional approach, still adopted by some state courts, is that the parties may be required to give "general discovery"; that is, the parties must discover and list all documents within their possession, custody or power which relate to any matter in question in the proceedings.
The test for relevance is set out in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 52 LJQB 181: a document is discoverable if it is reasonable to suppose that it contains information which may either directly or indirectly enable the party seeking discovery to either advance their case or damage their adversary’s case (which includes documents which may fairly lead to a train of inquiry which may have either of these two consequences).
The obligation to give discovery may be automatic under the rules of the relevant court, or the rules may provide that the obligation to discover is triggered by a notice given by one party to the other, or that a party must apply to the court for an order for discovery.
Where a party is obliged by the rules or an order to give discovery, that obligation is a continuing one and does not come to an end when the party has served a list of documents. If, after the party has served its list, it identifies more documents that meet the relevant criteria (whether that be general or standard discovery or discovery by categories), the party is required to discover those documents by service of a further or supplementary list of documents.
Searching for Documents to Discover
Parties must make a diligent search for relevant documents that are within their possession, custody or power, but it is generally accepted that the search is not required to be exhaustive or oppressive.
"Possession" means the right to physical possession, and also the right to possession of the document and so encompasses documents held by agents of the party; "custody" means actual physical possession regardless of the right to possession (an agent has custody of the document of their principal); and "power" (or sometimes "control") means an enforceable right to inspect or obtain possession of the document from the person who ordinarily has possession of it.
The various court rules differ as to the form in which discovery is to occur: in some jurisdictions an informal list is sufficient, whereas in others the list of discovered documents must be verified on affidavit. The list should describe the documents being discovered so that they can each be adequately identified.
Current Approach of Australian Courts to Discovery
Increasingly, however, the courts seek to minimise the burden of discovery on the parties by various means.
For instance, the FCA has amended the Federal Court Rules (FCR) to the effect that no party is required to give discovery except when an order has been made to that effect. Further, the FCR require that a party may not apply for an order for discovery unless that party can show that such an order will facilitate the just resolution of the proceedings as quickly, inexpensively and efficiently as possible.
The court expects that the parties will consider and confer with one another in relation to specific categories of documents that are sought. If agreement cannot be reached, parties may apply to the court for a ruling on relevant categories.
If the parties intend to give electronic discovery, it is expected that they confer and reach agreement on a suitable protocol setting out the format of digital files that are to be provided, including metadata.
Availability of Pre-action Discovery
Pre-action discovery is generally available on application, subject always to the court's discretion. A party against whom pre-action disclosure is sought is generally entitled to their costs of the application and of the search and production required to be undertaken to respond to any order made.
However, because the question of relevance is tested against the pleaded cases of the parties, it is more usual for discovery and inspection to take place after the close of pleadings. While it is possible to apply for early discovery, this is reserved for exceptional cases where a particular need is shown. It is also likely that an application for early discovery will only be successful if the application is confined to a well-defined category of documents.
In all courts in Australia, a document that is the subject of a privilege is discoverable and must be listed. However, a privileged document may be withheld from inspection.
In practical terms, this requires that the list of discovered documents contains two parts:
Forms of Privilege
There are a number of relevant privileges:
Waiver of Privilege
Legal professional privilege may be waived if a document is produced to an opponent (unless that occurs accidentally) or the substance of the advice is revealed. Common interest privilege or without prejudice privilege cannot generally be waived except with the consent of all parties sharing in the privilege.
Where the client is a corporation, it is necessary to determine who within the corporation is authorised to obtain legal advice for the corporation, as a very wide dissemination of the advice within the organisation may amount to a waiver of the privilege.
Legal professional privilege (and common interest privilege) does not apply to communications to facilitate crime or fraud, even if a party's lawyer is ignorant of that purpose.
Claiming Privilege in the Context of Discovery
A party that claims privilege from production in respect of a document must give a sufficient description of the document and the grounds of the privilege claimed in order that the other party can reach a view whether the claim of privilege is properly made or, if not, to challenge it. If the other party disputes that a sufficient description has been given or that the privilege has not been made out, it may be necessary to put on affidavit evidence to further substantiate the claim. From time to time, depending on the extent to which privilege may be challenged by opposing parties, it may be necessary to put forward multiple affidavits setting out the privilege claims.
Where the ACCC grants immunity or leniency to a party under its Immunity and Co-operation Policy for Cartel Conduct (Immunity Policy), the ACCC will use its best endeavours to protect any confidential information provided by the party, including their identity, while the investigation is ongoing.
The ACCC is obliged by section 155AAA of the CCA to not disclose any protected information except in certain circumstances. "Protected information" includes information that was given in confidence to the ACCC or obtained pursuant to its powers to compel production of documents and information. The ACCC may, however, disclose protected information where disclosure is required by law to do so, where it is required in the exercise of the ACCC's functions, and where it would assist or enable another agency, including a foreign government body.
The party granted immunity and its legal representatives is required to keep confidential the fact of their application, as well as any information provided to the ACCC in support of their application while the ACCC's investigation is ongoing.
However, once proceedings are commenced it would be usual for the fact of the application to become public knowledge and for information provided in the course of the investigation to form part of the evidence brought in support of the proceedings.
Similarly, the provision of information to the ACCC does not make the party immune, in follow-on proceedings, from production to the applicant of information provided to the ACCC. Nor is the ACCC immune from the production of that information under subpoena if a subpoena is issued by the court.
Following an amendment to the Immunity Policy in late 2019, the ACCC now seeks a party's agreement to written terms concerning that party's co-operation in the course of any immunity application. It seems likely that any such agreement could be the target of discovery where it is held by the immunity applicant, or subpoena where it is held by the ACCC.
Settlement Agreements on Penalty
The ACCC does not have the power to enter into a settlement agreement for breach of the CCA with a party in the enforcement context where a penalty is sought. That is because the ACCC is unable to issue a penalty in its own right and must initiate proceedings in court for a civil pecuniary penalty. For criminal breaches of the CCA, the CDPP must seek a criminal penalty from the court.
In civil matters, the court will consider whether any penalty proposed jointly by the ACCC and the party is within the applicable range and, if so, issue a penalty in the agreed amount. If the court does not believe any agreed penalty is appropriate it will substitute its own judgment when issuing the penalty. This has occurred in Australia in circumstances where the court doubled a jointly proposed penalty.
In criminal proceedings the CDPP may not make a recommendation to the court on penalty, although a defendant party may do so. To the extent that the CDPP does not dispute the level of penalty put forward by a defendant, it may make submissions to the effect that the court will not fall into appealable error if a criminal penalty is awarded in the range proposed by the defendant. The prohibition on submissions by the CDPP on penalty is imposed because criminal penalties are matters entirely for the court.
In either of the above scenarios, the proceedings and penalties imposed are public and are not the subject of a confidential settlement agreement between the regulator and the party.
Settlement Agreements by Way of Enforceable Undertaking
Where the ACCC does not seek a penalty but seeks to have the party undertake to change its conduct or practices, it may request the party to enter into a court enforceable undertaking. This step does not require the ACCC to first serve proceedings on the relevant party. Undertakings are publicly available and are posted to the ACCC's website. They set out both the particular practice the party undertakes to cease, as well as any remedial steps to be taken. In the event that the parties do not comply with the terms of the undertaking, or continue to engage in the impugned conduct, they are at risk of proceedings being brought against them for breach of the undertaking or, alternatively, for continued contravention of the CCA.
Evidence in Chief
A party has discretion in regards which witnesses it chooses to call, but should call all witnesses necessary to establish the facts it pleads. The unexplained failure of a party to give evidence, call witnesses or tender documents/evidence may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the party's case (but not that it would have damaged their case).
The form of evidence in chief is ultimately at the discretion of the court and will usually depend upon the nature of the evidence.
In most antitrust proceedings, affidavits are used in place of a witness giving oral evidence in chief in court.
Trials are not usually run on the basis of oral evidence, other than cross-examination as discussed further below, because it is often more time-consuming. The use of affidavits accords with case management principles encouraging more time and cost-effective litigation. The form of an affidavit is highly prescribed.
In some courts there has been a more recent trend towards oral testimony, particularly where witness testimony is likely to be particularly contentious and there are issues of credibility. Where oral testimony is to be given, there will be a requirement for an outline of evidence to be served on the other side in advance of trial. This outline is not treated as evidence.
Providing an affidavit does not make the information contained in it part of the evidence, the affidavit must be read to the court before it forms part of the evidence (subject to any objections for admissibility). Evidence in chief, whether oral or by affidavit, must be admissible; that is, it must be relevant and must not fall within an exclusion. The common exclusions for lay witnesses are hearsay, relevance and opinion. For interlocutory matters the hearsay rule may be relaxed in some jurisdictions.
Generally, any witness who is called to give evidence by one party may be cross-examined by the party against whom the witness has testified.
Cross-examination is always oral and usually in person, although it may in some circumstances be undertaken virtually. Prior to the COVID-19 pandemic, a virtual examination was the exception rather than the rule, and usually only occurred when a witness could not reasonably travel to the relevant court and where the cross-examining party did not insist that they do so.
A witness may be cross-examined both on facts and credibility. As with evidence in chief, a witness in cross-examination must be confined to matters of fact which are admissible.
A party is not required to cross-examine witnesses. Where witness testimony is required to adduce documents that are not controversial, it is common for there to be no cross-examination. Where a party's case is unlikely to be assisted by cross-examination or an opponent's case may be improved by a witness giving oral testimony, a party may choose not to cross-examine.
A key factor in deciding whether or not to cross-examine a witness is whether a party wishes to lead evidence which is contrary to the witness' evidence or suggest that the witness' testimony is not accurate. A party may not lead evidence contrary to a witness' testimony without first putting the contrary evidence to the witness.
Where a witness is unwilling to testify, a party may apply for a subpoena to compel the witness to give evidence. Subpoenas can compel a witness to provide oral testimony or provide documents, or both. For strategic reasons, it is more common for a party to apply for subpoenas for the production of documents rather than the giving of evidence.
A party cannot compel a witness to speak with lawyers or otherwise engage with the litigation process outside of the bounds of a subpoena. When a subpoena is issued by the court it must then be served on the recipient. Subpoena recipients should be aware that as subpoenas are court orders, failure to comply with them is punishable as contempt of court. Failure to comply with a subpoena can result in a warrant being issued for the arrest of the recipient.
A subpoena requires payment for reasonable expenses. As a subpoena compels a recipient to the proceeding to do something, whether give evidence or produce documents, the recipient is entitled to payment of its reasonable costs of compliance.
A person served with a subpoena to give evidence may subsequently choose to give evidence in chief by affidavit to avoid the need for that evidence to be given orally. Where a witness is compelled it may also be the case that an application is made to the court for the party calling the witness to be permitted to cross-examine the witness as a hostile witness.
General Principles of Expert Evidence
Expert evidence is a common part of litigation, particularly in antitrust matters which often involve complex economic modelling, as the fundamental principle is that "the purpose of expert evidence is to provide the court with information which is outside the experience and knowledge of a judge and jury". Expert evidence is permitted as an exception to the general rule against opinion evidence. The facts upon which the expert bases their opinion must be separately established. While a common occurrence, parties do require the leave of the court to adduce expert evidence.
Parties may choose to engage "consulting" or "armchair" experts as well as testifying experts. Some jurisdictions require parties to identify such experts, so care should be exercised in selecting and communicating with experts.
The FCA requires that a party gives an expert it intends to retain a copy of the relevant court practice note dealing with guidelines for expert witnesses in proceedings in the court.
Form of Expert Evidence
The evidence in chief of an expert witness is given in the form of a report which is usually filed and served well in advance of trial. Generally, expert evidence is only called at trial after the completion of witnesses of fact. The expert will then be called upon to swear an affidavit as to whether they hold the opinion expressed in the report or if the expert now holds a different opinion, the nature of that opinion and the factual basis for that opinion.
The form of the expert report can vary considerably but must adhere to the rules of the relevant jurisdiction. There are several common elements required across all jurisdictions:
Other elements may also be prescribed by each jurisdiction, including costs arrangements.
Joint Reports, Conferral and Other Methods of Hearing Expert Evidence
It is common for the court to order some form of conferral between experts of the same or similar expertise following the filing of expert reports. The purpose of conferral is to identify where the experts might find agreement and areas in which they differ. These areas of agreement and difference and the reasons for the difference are then the subject of a joint report by the experts.
The form of the conferral is subject to the court's discretion. The court may direct that conferral occur with or without the parties' legal representatives and/or in the presence of a registrar of the court or other independent facilitator.
It is expected that the conferral would take place in person or by telephone or video conference when meetings in person are not practical. A conferral may occur over several meetings.
An expert directed to confer or prepare a joint report must:
The report should be composed by the experts and not the representatives of the parties. The joint report should be signed by all participating experts and then provided to the court.
Concurrent Evidence and Cross-Examination of Experts
Experts may be called for cross-examination in any order the court sees fit. Traditionally, experts would be called to give evidence one after the other in the usual order of evidence in chief, cross-examination and re-examination before the next expert is called.
However, each expert on the same subject matter or issue may be called for cross-examination and re-examination concurrently, known in Australia as a "hot tub", allowing parties to put the same question to each expert in turn and for the judge to also ask questions. In some instances, subject to the court's orders, in the concurrent process experts are also able to ask questions and comment on the evidence given by other experts.
Generally, damages are calculated on a compensatory basis; that is, to compensate an applicant for loss suffered as a result of a respondent’s wrongdoing.
Whilst the courts are empowered to award exemplary, punitive or aggravated damages, in practice exemplary damages are extremely rare. There are also extensive statutory restrictions on their application.
With respect to class actions brought in the FCA, under section 33ZB of the Federal Court of Australia Act 1976 (Cth) a judgment given in a representative proceeding must describe or otherwise identify the group members who will be affected by it.
The Australian courts have not yet directly considered the "passing-on" defence and, as a result, it is presently unclear whether it would be available in an action concerning a breach of competition law.
Australian courts are empowered to order interest on awards of damages. This can include pre-judgment and/or post-judgment interest.
The rate of interest will vary from court to court and is prescribed by the legislation and rules of the relevant court. For example, in New South Wales, Sections 100 and 101 of the Civil Procedure Act 2005 (NSW) indicate the rate at which pre-judgment (Section 100) and post-judgment (Section 101) interest is to be calculated for proceedings commenced in the local (civil claims), district and Supreme Courts.
Under Section 82 of the CCA a person who suffers loss or damage by conduct of another person that was done in contravention of the restrictive trade practices provisions of the CCA can commence proceedings against that other person, or against any person involved in the contravention, to recover the amount of the loss or damage.
Australian case law in Australia has not yet considered whether the liability of cartel participants under the CCA is several, or joint and several. However, it has been observed that the policy considerations which underlie the CCA, and the similarity with conspiracy to commit the tort of deceit which gives rise to joint and several liability, mean liability under the price-fixing cartel provisions may be joint and several.
Limitations on Liability to Direct Purchasers
Australia does not have any analogous provision to that contained in Article 11 of the European Directive that an immunity recipient's liability, as well as its contribution owed to co-infringers under joint and several liability, is limited to the harm caused to its direct or indirect purchasers.
Bringing Contribution Proceedings Against a Third Party
The CCA does not contain any provision which enables a contravener to bring a claim for contribution against another person and there is no broadly applicable contribution regime under any other federal statute. Similarly, the CCA does not provide for proportionate liability (in contrast to actions for damages under Section 236 of the ACL for which apportionment is available).
Claims for contribution in equity are unlikely to succeed, given a contravenor of the CCA is unlikely to be able to seek equitable relief with "clean hands".
However, rights of contribution in respect of liabilities under the CCA may be determined according to the statutory contribution regimes of the various Australian states. For example, Section 23B of the Wrongs Act 1958 (Vic) provides that a person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with the first-mentioned person or otherwise). This provision has been used to permit claims to be made between respondents in antitrust follow-on class action proceedings.
General Power of the Court to Grant an Injunction
The FCA has the power to grant injunctions (including interlocutory injunctions) to restrain conduct that may be in breach of the restrictive trade practices provisions of the CCA.
Anyone may make an application to the court for an injunction, other than in relation to proposed mergers, although it would be more usual for the ACCC to seek to do so in antitrust enforcement proceedings than for a private party. The CCPP can also seek an injunction for alleged cartel offences.
Although the court may grant an injunction on the basis of consent by all relevant parties, the more usual application is for:
Any urgent injunction will ultimately need to be supported by a claim substantiated in pleadings. The court will usually list hearings for applications for injunctions at the earliest appropriate time.
Circumstances in Which an Injunction Will Be Granted
The CCA confers relatively wide powers on the court to grant an injunction. The court will ultimately need to be satisfied on the civil standard of proof, being the balance of probabilities, that:
The latter part of the test is sometimes articulated as whether the applicant would suffer more damage if the injunction were not granted than the defendant would if the injunction was granted, thus requiring preservation of the status quo.
This means that a court may restrain a person from engaging in relevant conduct (and similarly, order a person to engage in relevant conduct) whether or not:
In the usual course, an application for an injunction needs to be accompanied by an undertaking as to damages. This is an undertaking:
In the context of injunction applications made by the ACCC for alleged breaches of the relevant CCA provisions, the court will not require such an undertaking to be given (the same applies for applications made by the CDPP for alleged cartel offences).
The court will make cost orders after the parties are given the opportunity to be heard in relation to the injunction application. For interlocutory injunction applications, the court orders are likely to be to the effect that costs be costs of the parties in the cause, to be determined as part of the subsequent substantive hearing. The ACCC is as liable to a costs order for applications that it loses as any other party.
Mediation is available as an alternate dispute resolution process.
As part of the court's framework for case management, a court will usually consider, and may order, that the parties are to engage in mediation with a view to settling the matter without the need for a trial. Mediation can also be sought by the parties prior to trial.
Further, the parties (and their lawyers) are expected to co-operate with each other and the court to achieve the court's overarching purpose of reducing costs and delays by:
Litigation funding for class actions is permitted in Australia and is an arrangement under which a third party (the funder) contributes some or all of a party’s costs, or provides security or indemnities for costs. If the action is successful the funder then receives part of the settlement or judgment sum.
As third party funders are providing a financial product or service they are subject to statutory regulation, including by the Australian Securities and Investments Commission (ASIC) and under the ASIC Act 2001 (Cth), which contains various consumer protections. They are also regulated under the Corporations Act 2001 (Cth). To reduce the risk that a funder may have insufficient funds to pay adverse costs, a recent amendment to the Corporation Act which came into effect on 22 August 2020 requires funders to register class actions as managed investment schemes and to hold an Australian Financial Services Licence. These amendments have been criticised by class action litigators and the ASIC, who is now required to oversee these changes. In September 2022, the Labor government released exposure draft regulations for public consultation that seek to exempt funders from the requirements to register a class action as a managed investment scheme and hold an AFSL. There is, as yet, no date for release of the regulations.
Where an application is funded by a litigation funder in a class action, the fact of the funding and the identity of the funder must be disclosed to the respondents.
In December 2020 the Federal Parliamentary Joint Committee on Corporations and Financial Services published a report on litigation funding and the class actions industry including recommendations directed at achieving fair and proportionate funding agreements, without windfall gains to the litigation funder. The report and recommendations led to the introduction of the Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021 (Cth) which sought to introduce the following changes:
This bill has not yet been passed and it is unclear if the newly elected Labor government will do so.
Specialist class action law firms may also self-fund litigation. Where that is the case, the defendants in the class action are likely to seek security for costs to mitigate the risk of the firm holding insufficient funds to pay costs.
Traditionally, Australian lawyers were not permitted to charge “contingency fees”; that is, a fee based on a percentage of the amount recovered. However, in late 2020 the State of Victoria passed legislation permitting contingency fees in class actions in its courts. In 2021 the first case allowing a contingency fee to be charged by a law firm was approved by the court at 27.5%. In that case it was successfully argued that although the firm had commenced the case on a “no win, no fee” basis, that was an interim measure, and were such an order not made, the firm would seek out a litigation funder. That meant that the commission charged by a funder was the appropriate counterfactual in deciding whether to grant the application for a contingency fee.
Costs at the Close of a Proceeding
Costs are awarded in antitrust litigation under the court rules and are granted in favour of the successful party. The usual form of costs is "party and party" costs, which means costs incurred in the conduct of the litigation that are fair and reasonable.
Costs are awarded by reference to a court scale, which sets the rates for particular work undertaken by reference to the seniority of the person who performed the work. The application of a court scale means that a successful party cannot expect full recovery of costs expended.
The usual practice for costs in interlocutory proceedings heard during the life of the matter is for costs expended in those proceedings to be costs in the cause, although specific orders may also be made by the court (for example, where the judge takes the view that the specific interlocutory proceeding should not have been brought).
Security for Costs
Security for costs may be sought under the FCRs. The court must consider the following factors:
The authorities have provided guidance for the making of an application for security for costs to the following effect:
In practice, an order that security be paid requires the payment of a sum into court, or into a solicitors' trust account, pending the outcome of the dispute. Applications for additional security for costs may also be made.
Judgments of a single judge of the FCA, whether interlocutory or final, may be appealed to the Full Court of the Federal Court (three or more judges sitting together) on questions of law.
Judgments of state or territory courts may be appealed, including to state or territory Supreme Courts or Courts of Appeal, on questions of law. An appeal from a state or territory Supreme Court to a Court of Appeal is possible, provided the relevant Court of Appeal grants permission to appeal.
Judgments of the FCA or a state or territory Court of Appeal may be appealed to the High Court of Australia (HCA), provided the HCA grants special leave to appeal.
The HCA must have regard to the following criteria when deciding whether to grant special leave to appeal:
If special leave is refused, there is no further avenue of appeal available in Australia. If special leave is granted, any decision from the HCA on the matter is final.
As a matter of process, and where there is material public interest or the potential for a miscarriage of justice, the HCA may hear both the special leave application and the appeal simultaneously, before issuing a final decision.