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Vol 31 No 4 December 2017-February 2018

Certification of class actions: a ‘solution’ in search of a problem?
By Justice Michael Lee
 
… What I propose to do is to deal with a more current question, which is tangentially connected to the rise of multiple class actions, but is a matter of some present importance. It is the issue of whether there should be a threshold criterion for commencing class actions, being a pre-commencement hearing to consider and then determine whether certain conditions have been met.
This proposal can be more simply described as whether or not a certification regime should be introduced. The reason why this is a matter of current discussion is that in December 2016, the Victorian Attorney-General asked the Victorian Law Reform Commission (VLRC) to report on a number of issues with respect to group proceedings conducted pursuant to the Supreme Court Act 1986 (Vic). The stated reason for the reference was to ascertain whether reform was necessary to ensure that litigants, who seek to enforce their rights using the services of litigation funders and/or through group proceedings, are not exposed to unfair risks or disproportionate cost burdens.
 
 
Adverse costs: insurance as security for costs in class actions
By Odette McDonald and Roop Sandhu
 
Applications for security for costs can raise difficult questions when balancing the interests of parties in legal proceedings. On the one hand, an order for security for costs could stymie a plaintiff’s legitimate claim with undue impediments and costs. On the other hand, regard must be had for the risk that a defendant, typically an involuntary participant in the litigation, could end up out of pocket for their legal costs if they successfully defend proceedings. If security is ordered and then not provided, the court is able to stay or even dismiss proceedings. Accordingly, security for costs applications can be used as a sword to attack less wealthy plaintiffs, rather than as a shield, which is their primary purpose.
 
 
Pleading defendant knowledge in securities class actions: are allegations premised on inferences sufficient?
By Tim Finney
 
It is common ground amongst observers of class action litigation in Australia that ‘securities class actions’ (representative proceedings brought on behalf of a class of investors in an entity listed on a stock exchange) are increasing in number and frequency, although there is disagreement over whether the increase in recent years constitutes a ‘flood’ or should rather be considered steady and stable. Anecdotally, it appears that in recent years defendant strategy has shifted in response to this increase, with defendants and their legal teams evincing more vigorous opposition to class action proceedings in almost all areas of case management. This includes a renewed enthusiasm for interlocutory disputes over the adequacy of the plaintiff’s pleaded case at an early stage in the life of a proceeding.
 
 
Competing class actions: will certification stymie the competition?
By Noah Wortman, Ben Phi and Cameron Myers
 
Since its inception, the Australian class action regime has been underpinned by the preference for a scheme providing ease of commencement, tempered by a discretionary ‘control’ mechanism. Competing class actions commenced on behalf of ‘some or all’ putative claimants are a structurally permitted and increasingly common feature of the landscape, especially following the acceptance of the closed class and litigation funding. Despite this, there have been increasing cries by some commentators for radical overhaul by the legislature to curb the rise of multiple and competing class actions.4 Against this backdrop, two Australian courts have recently had the opportunity to clarify the principles to be applied and likely measures to be taken when substantially identical class actions are filed against a single defendant.
 
 
Recent developments in common fund applications: Pearson v State of Queensland & Blairgowrie v Allco Finance Group (No 3)
By Odette McDonald and Eliot Olivier
 
Following the Full Federal Court’s decision to make a common fund order in Money Max v QBE Insurance Group (‘Money Max’) in late-2016, there have been a number of common fund applications in Australian class action proceedings. In the context of a representative proceeding funded by a third-party litigation funder, ‘common fund order’ refers to an order of the court requiring all class members to pay the funder the amount in respect of costs and commission from their settlement or judgment award that they would have paid them had they entered a litigation funding agreement with the funder, regardless of whether they in fact entered into such an agreement.
  • Certification of class actions: a ‘solution’ in search of a problem?
    By Justice Michael Lee
    page 3
  • Adverse costs: insurance as security for costs in class actions
    By Odette McDonald and Roop Sandhu
    page 9
  • Pleading defendant knowledge in securities class actions: are allegations premised on inferences sufficient?
    By Tim Finney
    page 21
  • Competing class actions: will certification stymie the competition?
    By Noah Wortman, Ben Phi and Cameron Myers
    page 34
  • Recent developments in common fund applications: Pearson v State of Queensland & Blairgowrie v Allco Finance Group (No 3)
    By Odette McDonald and Eliot Olivier
    page 37
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