Trending Now
Case Developments Commercial Special Features

Federal Court of Australia makes first aggregate damages award in a funded representative proceeding in Toyota Class Action

June 9, 2022

Federal Court of Australia makes first aggregate damages award in a funded representative proceeding in Toyota Class Action

The following piece was contributed by Martin del Gallego and Matthew Harris of Australian law firm, Piper Alderman. This article considers a recent decision of the Federal Court of Australia, awarding damages to class action claimants on an aggregate basis.  Aggregate damages is a rare global award which covers all group members described or identified in the award.  This was the first instance of aggregate damages being awarded to a funded litigant in Australia, and may spur a trend in representative claims brought on this basis. In Williams v Toyota Motor Corporation Australia Limited (Initial Trial) [2022] FCA 344, Justice Michael Lee relied on s 33Z(1)(e) of the Federal Court of Australia Act 1976 (Cth) (the Act) to award damages to group members in possession of certain Toyota vehicles throughout the entirety of the claim period, calculated as the percentage reduction in value of their vehicle or vehicles.  It has been estimated that Toyota’s total aggregate damages bill may exceed AU$2 billion. Key Takeaways
  • For an order of aggregate damages to be made in a representative proceeding, the Court needs to be satisfied on a principled basis with which to assess and distribute the relief;
  • The analysis must be informed by general principles governing the assessment of damages, and can result in an award of aggregated damages applying to a specific class of group members within a representative proceeding;
  • While the judgment is liable to spur a trend in claims for aggregate damages, precisely how such an award will impact the approval of legal costs and a funder’s commission remains to be seen.
Background to the proceedings The case before the Court concerned claims relating to Toyota’s supply of 264,170 defective diesel vehicles to Australian consumers between 1 October 2015 and 23 April 2020 (Relevant Period).  These vehicles were fitted with diesel combustion engines and a ‘diesel exhaust after treatment system’, or ‘DPF’, aimed at reducing harmful pollutants and other emissions from the engine.  The case alleged that the vehicles were defective because the DPF was not designed to function during all reasonable driving conditions, and even if driven normally, there was a propensity for the car’s exhaust to emit excessive white smoke and malodour, and cause reduced fuel efficiency and trigger ‘excessive’ notifications prompting the need for service or repair. In alleging that the vehicles were not of ‘acceptable quality’ in breach of the statutory guarantee under s 54 of the Australian Consumer Law (ACL), and that Toyota’s conduct had been misleading and deceptive in contravention of ss 18, 29(1)(a) and (g), and 33 of the ACL, the lead applicant sought two types of damages under s 272 of the ACL:
  • Under s 272(1)(a), damages for the reduction in value of each relevant vehicle resulting from the failure to comply with s 54 of the ACL; and
  • Under 272(1)(b), other reasonably foreseeable loss or damage incurred as a result of the defect and failure to comply with s 54 of the ACL, including excess taxes, fuel consumption, financing costs, servicing costs and lost income.
Of these heads of damage, only two were suitable for determination at the initial trial of the lead applicant’s claim:  the ‘reduction in value’ damages under s 272(1)(a) and damages for excess GST paid by group members in connection with acquiring the relevant vehicles under s 272(1)(b).  (A separate question had been asked and answered in an earlier interlocutory application in the case, clearing the way for a potential aggregate damages award, in respect of only part of the lead applicant and group members’ claims.[1]) Aggregate Damages Having found in favour of the lead applicant, on among other things, their ‘acceptable quality’ cases, Justice Lee also found that the same determinations could be made on a common basis for the remainder of group members.  His Honour found that the lead applicant and group members were entitled to damages for the reduction in value of their vehicles, and for excess GST paid in connection with that reduction.  Accordingly, it was necessary for his Honour to determine a principled basis for arriving at a quantum of the reduced value which could be applied on an aggregate basis to all relevant group members. The Federal Court’s power to award damages on an aggregate basis is found in s 33Z of the Act. This section provides, among other things, that the Court may, in determining a matter in a representative proceeding, make an award of damages for group members, sub‑group members or individual group members, being damages consisting of specified amounts or amounts worked out in such manner as the Court specifies,[2] or award damages in an aggregate amount without specifying amounts awarded in respect of individual group members.[3]  Further, subject to section 33V of the Act, the Court is not to make an award of damages under s 33Z(1)(f) unless a reasonably accurate assessment can be made of the total amount to which group members will be entitled under the judgment.[4] Noting that class actions were not the ‘Galapagos islands’ of litigation, Justice Lee observed that an award of damages, even on an aggregate basis, was subject to two overarching principles as to the award of compensatory damages.[5]  His Honour observed that an award of compensatory damages must be considered in the light of the overriding compensatory principle, and that even where the process of estimating damages is difficult, the Court ‘must do what it can’, this principle equally applying to an assessment of ‘reduction in value’ damages. Justice Lee found that the Court is not permitted, by s 33Z of the Act, to take an approach of awarding aggregate damages on a per vehicle basis and determining the separate question of distribution at a later stage. Because of this, his Honour was faced with a challenge of how to distribute relief to group members who had possessed the relevant vehicles for only part of the Relevant Period.  His Honour termed these group members as ‘Partial Period Group Members’ and concluded at [432]: The bottom line is that without knowing the price at which, or the time at which, the Partial Period Group Members bought and sold Relevant Vehicles on the secondary market, one cannot determine on a principled basis how the compensation for the owners of those Relevant Vehicles ought to be assessed or distributed. One must always bear in mind the whole object of any award of damages is to put the claimant in the position the claimant would have been in but for the contravening conduct. Ultimately, the Partial Period Group Members will be required to undertake an individualised assessment of their loss. For the ‘Entire Period Group Members’, that is, people who possessed the relevant vehicles throughout the entirety of the Relevant Period, the Court awarded aggregate damages under s 33Z(1)(e) of the Act.  The award of aggregate damages for the Entire Period Group Members was calculated on the basis of a 17.5% reduction in value of the average retail price of the particular type of vehicle at the particular time it was purchased.  In circumstances where the group member paid a price lower than the average retail price for their vehicle, the lower of the two prices was said to be the applicable comparator from which the 17.5% reduction in value is to be calculated.[6]  In being satisfied there was a reduction in value of the relevant vehicles of 17.5% resulting from the failure to comply with s 54 of the ACL, Lee J also found that Entire Period Group Members were also entitled to recover the excess GST they paid on that reduction in value, calculated as 10% of the reduction in value.[7] Regarding the claim for damages under s 33Z(1)(f) of the Act, the Court declined to award aggregate damages on this basis, because his Honour was not satisfied that a reasonably accurate estimate could be made of the total amount owing to group members as required by s 33Z(3). Conclusion Williams is the first instance of a Court awarding aggregate damages in a funded representative proceeding, and provides helpful guidance on how the Court will approach such claims, particularly where only part of the claim is suitable for determination on an aggregate basis.  That said, while Justice Lee found in favour of the class on the issue, it is plain that such an assessment will need to be carried out on a case-by-case basis. About the Authors Martin del Gallego, Partner Martin is Chambers & Partners recognised commercial litigator with 15 years’ experience in high stakes, high value litigation. Martin specialises in class action and funded litigation, with expertise across a broad range of sectors including financial services, energy & resources, construction and insolvency. Matthew Harris, Lawyer Matthew is a litigation and dispute resolution lawyer at Piper Alderman with a primary focus on corporate and commercial disputes. Matthew is involved in a number of large, complex matters in jurisdictions across Australia. — For queries or comments in relation to this article please contact Kat Gieras, Litigation Group Project Coordinator | T: +61 7 3220 7765 | E:  kgieras@piperalderman.com.au [1] Williams v Toyota Motor Corporation Australia Limited [2021] FCA 1425. [2] Federal Court of Australia Act 1976 (Cth) s 33Z(1)(e). [3] Ibid s 33Z(1)(f). [4] Ibid s 33Z(3). [5] Williams [421]-[423]. [6] Williams [446]. [7] Williams [492].
Secure Your Funding Below
Secure Your Funding Sidebar

Case Developments

View All
Case Developments Commercial

Uber Told £340m Group Claim Must Follow Costs Budgeting Rules

By John Freund |

In a notable ruling, the High Court has directed that a £340 million group action against Uber London Ltd will be subject to costs budgeting, despite the claim’s substantial size. The decision was handed down in the case of White & Ors v Uber London Ltd & Ors, where the total value of the claim far exceeds the £10 million threshold above which costs budgeting is typically not required under the Civil Procedure Rules.

According to Law Gazette, Mrs Justice O’Farrell chose to exercise judicial discretion to apply the budgeting regime. Her decision marks a significant moment for large-scale group litigation in England and Wales, underscoring the court’s growing interest in ensuring proportionality and transparency of legal costs—even in high-value cases.

An article in the Law Society Gazette reports that the ruling means the parties must now submit detailed estimates of incurred and anticipated legal costs, which will be reviewed and approved by the court. This move imposes a degree of cost control typically absent from group claims of this scale and signals a potential shift in how such cases are managed procedurally.

The decision carries important implications for the litigation funding industry. Funders underwriting group claims can no longer assume exemption from cost control measures based on claim size alone. The presence of court-approved cost budgets may impact the funders’ risk analysis and return expectations, potentially reshaping deal terms in high-value group actions. This development could prompt more cautious engagement from funders and a closer examination of litigation strategy in similar collective proceedings moving forward.

Case Developments Commercial

Merricks Steps into Trains Case Amid Funding Tensions

By John Freund |

Veteran solicitor-campaigner Walter Merricks is poised to assume the role of class representative in a major collective action against rail operator Govia Thameslink Railway, following the death of the previous lead claimant. The case — brought under the opt-out regime before the Competition Appeal Tribunal (CAT) — alleges anticompetitive fare charging that harmed passengers traveling without a London Travelcard.

An article in the Law Society Gazette states that Merricks has formally applied to take over from former class representative David Boyle, who passed away earlier this year. The transition raises “a number of complex and difficult issues,” given the opt-out nature of the proceeding and the procedural demands of the UK’s evolving collective redress framework.

The move comes amid broader tensions between Merricks and his former litigation funder, Innsworth Capital. That dispute centers on the earlier £200 million settlement of Merricks’ landmark claim against Mastercard. Though the CAT approved the settlement, Innsworth launched a judicial review and initiated arbitration proceedings to challenge the allocation of proceeds, arguing its entitlement to a larger portion of the award. Merricks has been openly critical of the funder’s conduct, calling its approach an “embarrassment” and warning it could undermine public trust in third-party funding.

For the rail case, Merricks has retained Wilkie Farr & Gallagher as counsel. His application to replace Boyle as class representative is currently before the tribunal and will be considered at a hearing in January 2026.

Case Developments Commercial

Pogust Goodhead Secures Landmark Win Against BHP in Brazil Dam Case

By John Freund |

In a major breakthrough for cross-border group litigation, Pogust Goodhead has secured a resounding victory in its long-running claim against mining giant BHP over the 2015 collapse of the Fundão tailings dam in Mariana, Brazil. The UK High Court has ruled BHP liable for the disaster, which killed 19 people and unleashed a wave of toxic sludge through the Rio Doce basin, displacing entire communities and leaving lasting environmental damage.

According to Non-Billable, the ruling confirms BHP’s liability under both Brazilian environmental law and the Brazilian Civil Code. In rejecting the company’s jurisdictional and limitation defenses, the court made clear that English law recognizes the right of over 600,000 Brazilian claimants to pursue redress in UK courts. The judgment underscores BHP’s operational and strategic control over the Samarco joint venture and found that the company was aware of critical dam defects more than a year before the collapse. The attempt to distance itself through the argument of being an indirect polluter was also dismissed.

This outcome is a critical milestone in one of the largest group actions ever brought in the UK. A trial on damages is now scheduled for October 2026, with case management proceedings set to resume in December.

The win comes amid internal turbulence at Pogust Goodhead, including recent leadership changes and reported tensions with its litigation finance backers, but the firm remains on course to press forward with what could be a multibillion-dollar compensation phase.