Australian High Court Rules on Competing Class Actions
Australian courts have had to adapt to the changes brought about by the increased use of litigation funding. The practice is a net gain for the community and clients who gain access to justice they could not otherwise afford. Still, some say that the availability of funding has sparked an untenable number of lawsuits—class actions in particular.
MONDAQ details that a High Court ruling has confirmed how competing collective actions should be handled. While this is an important confirmation, it doesn't differ markedly from the current paradigm. When there are competing class actions, courts can analyze the facts of each case to determine which should progress. Other cases would then be stayed or consolidated as appropriate.
This clarification comes after five class actions from shareholders were filed within five weeks of each other in the AMP claim. In that instance, three actions against the same defendant were stayed and two consolidated. Each case had a different legal team and its own litigation funding in place.
While there isn’t one uniform approach that will work for all competing class action situations, there is a standard approach to address that eventuality:
- Presume that multiple cases are not needed.
- Litigation funding should not make or break a case moving forward, but may be a relevant consideration.
- The first-in-time rule may not apply, but timing can be a factor in determining which case should move forward.
- Best interests of the group members should be a primary consideration.
- Courts may consider the likelihood of success.
While legal professionals may disagree on the particulars of the High Court’s decision, adding clarity and some measure of predictability to the process is a good thing.
Will this ruling lead to express statutory power for courts to rule on which and how many collective actions should move forward? Only time will tell.
