Collective Redress & Class Actions 2021

Last Updated November 09, 2021

Australia

Law and Practice

Authors



Clayton Utz is a leading Australian law firm, known for its independent culture and engaging approach. With over 163 partners and 1,300 employees across all of Australia's commercial city centres, the firm is able to bring together teams of lawyers with the right mix of legal and commercial skills to match the needs of its clients, and by so doing, it has built a reputation for innovative and incisive advice. Clayton Utz is a full-service commercial law firm and its lawyers have diverse and broad-ranging legal experience across a range of industry sectors. The firm's strength lies not only in the range of skills and depth of expertise held by its individual lawyers, but also in their ability to work together effectively as a full-service, national team.

Australia's current class action regimes have a developmental history of over 30 years. In 1988, the Australian Law Reform Commission (ALRC) published a report recommending that a class action regime be introduced in the Federal Court of Australia. The ALRC's express rationale was that group proceedings would reduce the costs for individuals seeking to bring a claim, thereby improving access to justice. Group or representative proceedings (as they have become known) were also thought to enhance court efficiency and consistency in the determination of common issues. On 5 March 1992, Part IVA of the Federal Court of Australia Act 1976 (Cth) came into force, setting out in detail a set of procedures to be used for representative proceedings in the federal jurisdiction. 

In January 2000, the Victorian Supreme Court Act 1986 was amended to include its own regime for representative proceedings. In 2011, New South Wales amended the Civil Procedure Act 2005 to do the same, followed by Queensland in 2016 and Tasmania in 2019. Most recently, the Western Australian parliament also considered introducing a statutory class action regime. 

As the federal procedure has been in force for more than 20 years, the balance of this chapter will refer to the provisions in the Federal Court of Australia Act (the “Act”).

The Australian representative proceeding regime is not modelled expressly on that of any other jurisdiction. While there are some similarities to the US class action regime, there are material differences. Firstly, Australia's regime has a very low threshold for the commencement of class actions. Essentially, all that is required is that there are seven or more persons with claims against the same person and those claims are in respect of, or arise out of, the same, similar or related circumstances and give rise to substantial common issues of law or fact. Secondly, there is no certification process. Rather, it is up to the respondent to move to have the class action "de-classed". Finally, unlike the US regime, there is no requirement for "numerosity" or that the common issues predominate. The Australian regime only requires there to be a matter or issue of substance that is common.

There is no applicable information in this jurisdiction.

As noted in 1.1 History and Policy Drivers of the Legislative Regime, Australia has representative proceeding regimes at the federal level as well as in some states. The federal regime is prescribed in Part IVA of the Act. The state courts of Victoria, New South Wales and Queensland each have their own statutory regimes. While the various regimes are similar, there are some differences. For example, in the New South Wales Supreme Court (where representative proceedings may be brought for claims based on negligence or for breaches of New South Wales statutes), class actions may be brought on behalf of a defined, limited group of identified individuals; not only an open, generally specified class. Furthermore, NSW class actions may be commenced against several defendants, even if not all of the group members have a claim against all of the defendants. In Victoria, the relevant legislation was recently amended to allow lawyers representing the plaintiffs and group members in class actions to charge percentage-based contingency fees in certain circumstances. This is a feature that is currently unique to Victoria's regime.

Representative proceedings can be brought in most areas of law in which the Federal Court of Australia has jurisdiction. The areas in which claims have been brought include:

  • financial services;
  • investment schemes;
  • shareholder litigation;
  • failure of infrastructure;
  • environmental contamination;
  • real estate investments/marketing;
  • consumer finance;
  • immigration law;
  • product liability; and 
  • anti-cartel proceedings. 

Representative proceedings may be commenced whether or not the relief sought is or includes equitable relief, or consists of or includes a claim for damages, even if the claim for damages would require individual assessment. Representative proceedings may also be commenced whether or not the proceedings concern separate contracts or transactions between the respondent in the proceedings and individual group members, or involve separate acts or omissions of the respondent done or omitted to be done in relation to individual group members.

Representative proceedings are defined under the Act to be proceedings commenced under Section 33C. Section 33C provides that where seven or more persons have claims against the same person and the claims of all those persons are in respect of, or arise out of, the same, similar or related circumstances; and the claims of all those persons give rise to a substantial common issue of law or fact, then a proceeding may be commenced by one or more of those persons as representing some or all of them. "Substantial" in this context has been interpreted by the courts to mean "real or of substance", rather than "large" or "of special significance".

See 2.1 Collective Redress and Class Action Legislation. Representative proceedings can be brought in the Federal Court or certain state Supreme Courts.

Requirements

Basic

As noted in 3.2 Definition of Collective Redress/Class Actions, representative proceedings can be commenced where at least seven persons have a claim against the same (legal) person and all of those claims give rise to a substantial common issue of law or fact. However, it is not a requirement that the common issues predominate over individual issues. All that is required is that there is at least one “substantial” common issue of law or fact. The High Court of Australia has interpreted “substantial” as meaning "of substance" rather than denoting a certain size. 

No certification

Furthermore, as noted in 1.2 Basis for the Legislative Regime, including Analogous International Laws, the Australian representative proceeding regime has no certification requirement. This means that the proceedings do not need to be judicially certified as appropriate to be brought in this form. Therefore, once a representative proceeding that meets the basic requirements has been commenced, it will continue until it is resolved or until the court determines that the proceeding should not continue as a representative proceeding. This decision usually involves an assessment of whether it is “in the interests of justice” for the proceeding to continue in this form. 

Option to opt out

Once a representative proceeding commences, all group members must be given notice of their right to opt out of the proceeding before a specified date. This notice must be given as soon as practicable and must be given before the trial begins. 

Representative proceedings may be commenced by a single representative claimant (or sometimes several claimants) for and on behalf of group or class members. Where a person has a sufficient interest to bring a claim on their own behalf, they are taken to have sufficient interest to bring the claim on behalf of the class.

The Australian competition regulator, the Australian Competition and Consumer Commission (ACCC), is also permitted under certain federal provisions to bring representative proceedings as a form of enforcement. These proceedings may be brought on behalf of persons who have suffered, or are likely to suffer, loss or damage by reason of conduct which contravenes those federal provisions.

The question of who belongs to a class is determined entirely by the definition of the class. While there is a minimum of seven class members, there is no upper limit on the number of people that may be in the class. Any person who falls within the class definition is automatically a group member, and once proceedings have commenced, the court fixes a date by which group members must opt out if they do not wish to be involved in the proceedings. This is done by providing written notice to the court. Anyone who is within the class as defined that does not opt out in time will be bound by any judgment of the court. Given this dynamic, the courts adopt a supervisory role over the group members, as their rights will be affected by proceedings that they may not even know are taking place. This supervisory role is seen across many rules and case management principles that govern representative proceedings.

Recently, the federal and Victorian courts have also shown a willingness to require claimants who do not opt out of proceedings to positively signal their intention to make a claim, through a registration process. In some cases, that registration process takes place at the same time as the deadline to opt out. Claimants who do not opt out but fail to register may be barred from making their claims. The Federal Court has also permitted classes to be defined as only including persons who have registered with a particular litigation funder (and their lawyers). In effect, such an order also operates as an informal opt-in system. 

Court rules across the jurisdiction allow third parties to be joined to proceedings in a range of circumstances. For example, in New South Wales, the court may order a person to be joined where it considers that they ought to be joined as a party, or where this is necessary for the determination of the matters in dispute. A third party may also apply to the court themselves to be joined as a party, either as a plaintiff or a defendant. However, given the requirement that there be a substantial common issue of law or fact, the joinder of additional parties to representative proceedings may raise issues with respect to maintaining sufficient commonality.

Judges presiding over representative proceedings in Australia have extensive case-management powers as, by their very nature, the proceedings rely on constant management. For example, the court has substantial powers regarding all notices issued to group members. Federal Court judges often finalise the exact wording of notices and make specific orders with respect to how the notices will be published. Another case-management power under the Act that is commonly deployed in representative proceedings is the use of a referee. Judges will often order that a specific question be considered by a referee who will then report their findings to the court.

Test Cases

In respect of test cases, there is no established precedent. Some representative proceedings begin with the determination of the lead applicant's case as a means of answering common questions for all group members. At other times or in other jurisdictions, the court may try preliminary issues of law or fact (or mixed fact and law). Typically, trials of preliminary issues have only been used on special grounds, such as to substantially narrow the field of controversy or shorten the trial, or where this would result in a significant saving of time or money.

Subgroups

If the determination of common questions would not or does not finally determine the claims of all group members and there are questions common to the claims of only some group members, the court may direct that those questions be determined by subgroups. The court may also allow an individual group member to take part in the proceeding for the purpose of determining a question that relates only to the claim of that member. If the subgroup questions or the individual questions cannot be adequately dealt with, the court can direct that further proceedings be commenced.

The timeframes for proceedings are highly dependent on the particular case and the nature of the claim. It may take anywhere between six months and several years for a matter to be heard and determined. Federal Court proceedings tend to be heard faster than those in the state and territory supreme courts. This is partly due to the Federal Court’s case-management system, in which proceedings are allocated to a particular judge who manages, hears and determines the case, and partly due to the higher caseloads in state supreme courts.

There are provisions in all jurisdictions for expedited hearings in appropriate circumstances. Examples of such circumstances include the health of a party to the proceedings. On the other hand, the courts also have the power to stay or dismiss proceedings that are considered vexatious, frivolous, or an abuse of process.

Costs

As is common in many jurisdictions, the "loser pays" rule applies in Australian representative proceedings. That is, the unsuccessful party is typically ordered to pay the costs of the successful party. These costs include not only out-of-pocket expenses such as court filing fees, but also the professional fees of legal representatives. However, the costs ordered do not usually amount to the total or actual costs accrued by the successful party. Costs orders are generally calculated with reference to a court scale that limits the amounts that a successful party can claim for disbursements and services performed by their lawyers. 

In unsuccessful representative proceedings, however, the "loser pays" rule does not apply to all the group members, other than those group members that commenced the proceeding. That is, the law protects all other group members from having adverse costs orders made against them. This is an element of the court's supervisory role over group members whose rights are being affected by proceedings over which they had little control. The "lead applicants" who commenced the representative proceedings, on the other hand, may be liable for adverse costs orders if the proceedings do not succeed. Equally, they may have costs orders made in their favour where the proceeding is successful.

Funding

Third-party funding of litigation is permitted in Australia. It is common in representative proceedings for professional litigation funders with no other interest in the matter's outcome to fund the action in exchange for a percentage of any judgment or settlement. If the proceeding is unsuccessful, the funder does not receive a return on its investment. Funders usually form agreements with a number of group members but not the entire class. However, group members that do not enter these agreements still ultimately benefit from the funding if the matter succeeds. The courts have used several mechanisms to try to resolve this apparent unfairness at the time of settlement or judgment, including by requiring all group members to contribute towards the costs of the litigation, regardless of whether they registered with the third-party funder. This concept, known as a "common fund" has recently been embraced by the Federal Court in certain circumstances. 

In Victoria, the relevant legislation has recently been amended to allow lawyers to charge contingency fees in certain circumstances. These are fees calculated by reference to the judgment or settlement sum awarded to the client, usually in the form of a percentage. Rather than simply permitting law firms to charge contingency fees, the reforms have allowed the courts to make a "group costs order", which may include a contingency fee structure. The court may do so if satisfied that it is appropriate or necessary to ensure that justice is done in the proceeding. At the time of writing, several class actions have been commenced intending to seek a group costs order. Only one application has been heard so far, in which the court declined to grant the order.

Discovery

Historically, discovery has been available as a right in Australian proceedings. However, over time, the courts have substantially reformed their approach in order to mitigate the burdens of cost and time associated with the process. Discovery is now subject to leave of the court and will only be permitted where it has been demonstrated as being necessary to the determination of issues that are genuinely in dispute. Furthermore, the courts will play an active role in case-managing discovery, and there is a focus on parties making reasonable efforts to provide discovery.

Where ordered, a party is obliged to discover (meaning identify and provide access to) all documents in its possession, custody or power which are relevant to a matter at issue in the proceedings. Discovery takes place at the pre-trial stage so that discoverable documents relevant to the case are disclosed before the hearing commences. Generally, relevant documents will be:

  • documents on which the party relies;
  • documents that adversely affect the party’s own case;
  • documents that support another party’s case;
  • documents that adversely affect another party’s case; and 
  • documents that are required to be disclosed by a relevant practice direction.

Parties must make a list of all discovered documents, and each party’s list is sworn and then provided to the other parties. Parties are entitled to inspect each other’s documents and to make copies, except for documents in relation to which a claim for privilege has been made. Much of this process now occurs using electronic systems and will therefore also deal with document-specific metadata.

The obligation to discover all relevant documents continues throughout the proceedings. This means that any document created or found after providing initial discovery must also be discovered.

Privilege

Evidence in representative proceedings is subject to "legal professional privilege" as it is known under common law, or "client legal privilege" as it has been renamed under the uniform Evidence Acts in the federal jurisdiction and some states. The uniform Evidence Acts govern issues of privilege where evidence is being adduced at trial, while common law covers privilege in the pre-trial stages.

Under the uniform Evidence Acts, confidential communications will be privileged if they were made and/or prepared for the dominant purpose of providing legal advice, or for the provision of legal services relating to actual or anticipated litigation. A similar threshold applies under common law, through a three-step test. Additionally, a third kind of privilege known as "without prejudice privilege" also applies. This form of privilege applies to communications between parties that are generally aimed at settling or resolving proceedings. These communications cannot later be put into evidence without the consent of all parties.

A broad range of remedies is available through representative proceedings, including equitable relief and damages, even where the claim for damages would require individual assessment.

There are a number of alternative dispute resolution mechanisms available to parties in representative proceedings. These mechanisms, including mediation and arbitration, may be engaged voluntarily by the parties or may be ordered by the court. It is common for a court to order mediation at some stage in a representative proceeding, while arbitration is comparatively rare.

The Act requires that representative proceedings may not be settled or discontinued without the court's approval. The approval process takes place in court, with the wording of the settlement notice being finalised by the judge, and it is then ordered to be distributed. This means that the settlement is typically not private or confidential.

When approving a settlement, the court determines whether it is a fair and reasonable outcome. This decision must take into account the interests of the group members as a whole, not only the lead applicant and respondent. The assessment is an active process, because settlement approval is a protective mechanism that must safeguard the interests and rights of group members. The court will consider the material presented and the advice provided by counsel as to the prospects of success, as well as the risk of any loss if the case were to proceed. The court may reject a settlement that has been agreed by the parties if it is not satisfied that the outcome is in the interests of the group members as a whole.

Under the Act, the court may:

  • determine an issue of law or fact; 
  • make a declaration of liability; 
  • grant any equitable relief; 
  • make an award of damages; 
  • make an award of damages for group members, subgroup members or individual group members, consisting of specified amounts or amounts worked out in such a manner as the court specifies;
  • award damages in an aggregate amount without specifying amounts awarded in respect of individual group members (where a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment); or
  • make such other order as the court thinks just. 

The court must also make provision for the payment or distribution of the money to the group members that are entitled to it. The court may also give directions in relation to the manner in which a group member is to establish their entitlement to share in the damages and the manner in which any dispute regarding such an entitlement is to be determined.

Any judgment of the court binds either all the group members, or a subset of group members specified by the court. As such, the judgment must describe or otherwise identify the group members who will be affected by it. Group members who have opted out of the proceeding are not bound by the judgment. 

Beyond this, judgments under Part IVA of the Act are enforced in the same way as any other judgment of the Federal Court of Australia.

Australia's continuous disclosure laws, which play an important role in shareholder class actions, were recently amended. Breaches of continuous disclosure obligations will now only attract civil penalties where a company has knowledge, or is reckless or negligent with respect to, whether the information would have a material effect on the price or value of securities. Prohibitions on misleading and deceptive conduct have also been amended to a corresponding extent, so that officers of corporations will not be liable where continuous disclosure obligations have been contravened, unless the requisite mental element has been proven. These changes are expected to reduce the number of future class actions in this area. 

In December 2020, the Federal Government Joint Committee on Corporations and Financial Services published a report titled "Litigation Funding and the Regulation of the Class Action Industry". The report made 31 recommendations for legislative and procedural reforms. Areas of proposed reform included:

  • dealing with multiple proceedings making the same allegations against the same defendants; 
  • improving transparency and management of potential conflicts of interest; 
  • proportionality of costs incurred during proceedings;
  • increased regulation of litigation funding; 
  • greater uniformity across jurisdictions; and 
  • an ongoing relaxing of continuous disclosure laws. 

While the last of these recommendations has recently been acted upon as noted in 5.1 Policy Development, it remains to be seen which of the other proposed reforms will be taken up.

Licence Requirements

In August 2020, the Corporations Regulations 2001 (Cth) were amended with the effect that litigation funders would fall within the regulatory regime relating to managed investment schemes, from which they had previously been exempt. The central consequence was that litigation funders would now be required to hold an Australian Financial Services Licence in order to fund Australian proceedings. Recently, the Australian Securities and Investment Commission (ASIC) has signalled its intention not to re-make exemptions that have similarly excused certain lawyers from these regulations. Specifically, lawyers that wish to use conditional costs arrangements, such as "no win, no fee" structures will also be required to hold Australian Financial Services Licences if these reforms are passed.

Brexit has had no impact on collective redress and class actions in Australia.

In March 2020, most Australian courts transitioned to virtual hearings. The use of online court platforms has been largely supported in the legal industry. Even as face-to-face appearances have gradually returned, a large number of case-management hearings, interlocutory hearings and final hearings have continued to take place through audio-visual links. These web conferences are considered very efficient, particularly for case-management hearings, and are likely to continue to be used to varying degrees even when the pandemic recedes.

In addition, a number of representative proceedings have been commenced that have arisen directly out of COVID-19. These include representative proceedings brought against:

  • governments, over financial losses caused by lockdowns;
  • aged care providers, over alleged failures to protect their residents from the virus;
  • security companies, over alleged negligence in managing quarantine hotels; 
  • a cruise ship operator, for alleged negligence and breaches of the Australian Consumer Law; and
  • insurers, who have refused to pay out businesses for losses during government-mandated closures.
Clayton Utz

Level 15
1 Bligh Street
Sydney
NSW 2000
Australia

+612 9353 4193

+612 8220 6700

cloveday@claytonutz.com www.claytonutz.com
Author Business Card

Trends and Developments


Authors



Clayton Utz is a leading Australian law firm, known for its independent culture and engaging approach. With over 163 partners and 1,300 employees across all of Australia's commercial city centres, the firm is able to bring together teams of lawyers with the right mix of legal and commercial skills to match the needs of its clients, and by so doing, it has built a reputation for innovative and incisive advice. Clayton Utz is a full-service commercial law firm and its lawyers have diverse and broad-ranging legal experience across a range of industry sectors. The firm's strength lies not only in the range of skills and depth of expertise held by its individual lawyers, but also in their ability to work together effectively as a full-service, national team.

Reforms to Australia's Corporations Legislation Hoped to Reduce Shareholder Class Actions

Companies listed on the Australian Stock Exchange (ASX) have legal obligations to disclose certain company information to investors. These obligations are commonly referred to as the "continuous disclosure" provisions. While serving as an important protection for investors, the continuous disclosure provisions have also formed the basis for multiple class actions against listed companies brought by shareholders alleging breaches of these provisions. Over the past decade, such shareholder class actions have surged in the Australian legal market, with many considering the continuous disclosure provisions to be a driver of the trend. In August 2021, the Australian parliament enacted substantial reforms to the continuous disclosure provisions. These reforms are expected to impact the climate of litigation in this area.

Continuous disclosure provisions

The continuous disclosure provisions are located in Chapter 6CA of the Corporations Act 2001 (Cth). The provisions are intended to ensure that investors are adequately informed about their investments and any company matters that may affect them. The provisions seek to achieve this intention by mandating that a range of relevant information be disclosed by the company. Broadly, the information that must be disclosedis information that is not generally available, but that a reasonable person would expect, if it were generally available, to have a material effect on the price or value of the company's securities.

Where a listed company fails to comply with the continuous disclosure provisions, liability may arise in the form of civil penalties or infringement notices issued by the Australian Securities and Investments Commission (ASIC); criminal liability under the Corporations Act; or representative proceedings brought by the shareholders. In recent years, it has been common for shareholders of ASX-listed companies to bring such class action claims, alleging that a company failed to make a required disclosure, that the shareholders were therefore not sufficiently informed as to whether to modify their investments, and in turn, that the shareholders suffered loss when the value of their investments decreased. Had the required disclosures been provided, shareholders argue, they could have avoided incurring the losses, such as by selling their shares in anticipation of the reduction in value. The losses alleged in claims such as these are usually referenced to changes in the company's share prices at particular points in time.

More often than not, these shareholder class actions are backed by third-party litigation funders.

Background to reforms

In May 2020, the Australian federal parliament announced a set of temporary changes to the continuous disclosure provisions. At the time, the amendments were said to be aimed at addressing issues regarding market confidence at the beginning of the COVID-19 pandemic. Given the economic uncertainty emanating from the pandemic, companies were understood to be experiencing difficulties in forecasting certain business figures. Information about company earnings, specifically whether earnings would be materially different from what was expected by the market, was information that was considered to fall within the scope of the continuous disclosure provisions. This meant that companies were obliged to disclose to investors forecasts and figures which were significantly impeded in their accuracy by the circumstantial uncertainty. The Federal Treasury expressly contemplated the effect of this issue on class action liability, stating:

"The heightened level of uncertainty around companies’ future prospects as a result of the crisis also exposes companies to the threat of opportunistic class actions for allegedly falling foul of their continuous disclosure obligations if their forecasts are found to be inaccurate."

There was a concern that litigants could use the continuous disclosure provisions to take advantage of the inherent uncertainty in company figures during this period, by claiming that companies had failed to disclose the information with the requisite accuracy. The government's temporary changes to the continuous disclosure provisions sought to address this issue by raising the threshold of what information would need to be disclosed. The mechanism by which this was done is discussed in more detail below.

After an initial temporary period as well as one extension, initial changes in this area lasted until March 2021. In the meantime, permanent changes were being considered. In December 2020, the Parliamentary Joint Committee on Corporations and Financial Services (the "Committee") published a report titled "Litigation funding and the regulation of the class action industry" (the "Report"). The Report made 31 recommendations for reforms across the broader class actions landscape, one of which was to permanently legislate these temporary revisions to the continuous disclosure regime. The Committee's rationale for this recommendation formed part of a broader intention to reduce the number of shareholder class actions commenced in the jurisdiction. The Committee asserted that shareholder class actions were "generally economically inefficient and not in the public interest", and that these proceedings "often generate excessive profits for litigation funders and lawyers at the expense of listed companies". The Committee also remarked that, overall, shareholders themselves often end up bearing the expense of defending the class actions.

Reforms to the continuous disclosure regime have also, in the past, been contemplated by the Australian Law Reform Commission (ALRC). ALRC Report number 134 on the topic of the "integrity, fairness and efficiency" of the class actions regime recommended that the impacts of the continuous disclosure provisions be reviewed in 2018.

By 2021, it appears that between ongoing discussions of reform to this area, the ever-increasing prevalence of shareholder class actions, and the final spur of pandemic-induced economic uncertainty, parliament was eventually convinced to permanently reform the continuous disclosure provisions.

Operation of the new provisions

The permanent amendments reflect the temporary ones, with one added component. They effectively raise the threshold for what kind of company information must be disclosed to investors. Companies need now only disclose information where the company "knows, or is reckless or negligent with respect to whether, the information would, if it were generally available, have a material effect on the price or value of (the company's) securities". In other words, a mental element has been added to the provision, without which the obligation of disclosure, and the potential liabilities associated therewith, do not arise.

The reforms added the same mental element as the requirement for a breach of the continuous disclosure obligations to trigger ASIC civil penalty proceedings, infringement notices, or the commission of an offence under the Corporations Act. Importantly, the reforms also amended, to an equivalent extent, the provisions of the Corporations Act that prohibit companies from engaging in misleading and deceptive conduct. In shareholder class actions, these provisions are often litigated upon in tandem with the continuous disclosure provisions, in respect of the same conduct. The amendments to the misleading and deceptive conduct provisions were new additions arriving with the permanent reforms, and were not included in the previous temporary reforms. The combined effect of the reforms is that corporations, as well as officers of corporations, will now not be liable for a failure to disclose information that was otherwise required to be disclosed, unless the requisite mental element of knowledge, recklessness, or negligence, has been proven. By bringing all of these provisions into line, the permanent amendments have substantially and consistently raised the overall threshold for corporate liability to shareholder class actions.

Conclusion – effects of reforms

These reforms, which bring the Australian regime more in line with other jurisdictions, are designed to have the effect of reducing the surge of shareholder class actions. Whether this will transpire remains to be seen. One potential issue may be the inherent difficulty in attributing a mental element, or state of mind, to a company. While the separate legal personality of a corporation is a long-standing principle, ascribing a state of mind to such an entity remains a legal challenge. Existing legislation and case law regarding similar dynamics may provide some guidance on this issue, but reasonable minds are likely to differ as to how and when a company may have known, or been reckless or negligent in not knowing, whether a given piece of information could materially affect its financial position and, in turn, its share price. Only future litigation, relying on the new continuous disclosure provisions, will indicate how the Australian courts will deal with this particular issue.

At the same time, the Australian class action regime is a constantly growing and evolving landscape. In the last few years, multiple substantial reforms have been announced, considered, debated and enacted. For example, the remaining 30 of the Committee's 31 recommendations remain unattended, the Victorian parliament recently made reforms of its own regarding the types of costs lawyers in class actions may charge, and potential reform is underway to further regulate litigation funders. It is clear to see that the appetite for class action litigation will remain subject to several competing variables. Whether one particular reform to one particular area of the law will have a noticeable impact on broader trends is therefore at the moment difficult to predict.

Clayton Utz

Level 15
1 Bligh Street
Sydney
NSW 2000
Australia

+612 9353 4193

+612 8220 6700

cloveday@claytonutz.com www.claytonutz.com
Author Business Card

Law and Practice

Authors



Clayton Utz is a leading Australian law firm, known for its independent culture and engaging approach. With over 163 partners and 1,300 employees across all of Australia's commercial city centres, the firm is able to bring together teams of lawyers with the right mix of legal and commercial skills to match the needs of its clients, and by so doing, it has built a reputation for innovative and incisive advice. Clayton Utz is a full-service commercial law firm and its lawyers have diverse and broad-ranging legal experience across a range of industry sectors. The firm's strength lies not only in the range of skills and depth of expertise held by its individual lawyers, but also in their ability to work together effectively as a full-service, national team.

Trends and Development

Authors



Clayton Utz is a leading Australian law firm, known for its independent culture and engaging approach. With over 163 partners and 1,300 employees across all of Australia's commercial city centres, the firm is able to bring together teams of lawyers with the right mix of legal and commercial skills to match the needs of its clients, and by so doing, it has built a reputation for innovative and incisive advice. Clayton Utz is a full-service commercial law firm and its lawyers have diverse and broad-ranging legal experience across a range of industry sectors. The firm's strength lies not only in the range of skills and depth of expertise held by its individual lawyers, but also in their ability to work together effectively as a full-service, national team.

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