2019 is shaping up as a watershed year for class actions.

With royal commissions, the release of the ALRC report and its proposals for law reform, increased competition in the litigation funding market and confirmation of courts' power to make common fund orders in open class actions, some say there are the conditions for a perfect storm.

Our class actions group has identified ten developments we expect to see this year.

  1. We'll see fewer competing open class actions. Even though common fund orders have been upheld, in the shadow of GetSwift[1] funders will be less interested in funding open class actions because they carry an unpredictable risk of being stayed.
  2. Funders will sharpen their focus on claims other than for securities fraud. Funders, and lawyers who originate litigation concepts, will be attracted to claims outside of the securities space because history tells us they are less likely to be the subject of competing open class actions.
  3. We'll see a renewed focus on closed class actions and book-building, particularly outside the securities fraud space. To avoid the risk of a GetSwift result, look out for funders to focus more of their attention on closed class actions, and building solid books to sustain them.
  4. We will continue to see open class actions in the securities space. Institutional book-building will present a challenge.
  5. Despite courts discouraging a 'race to the court' by plaintiff lawyers, expect those who stand behind open class actions to strive to file quickly. We wouldn't be surprised if the first filing douses the enthusiasm of some lawyers and funders to file a competing claim.
  6. We will see a spate of employment misclassification claims. It appears to be the flavour of the month.
  7. While the findings of the Banking Royal Commission will catalyse some claims, the floodgates will not open. We don't subscribe to the floodgates theory. There are too many natural constraints in play, including:
    • the bandwidth of plaintiff law firms capable of prosecuting major class actions;
    • the historic conservatism of funders;
    • the expense associated with prosecuting major claims and securing costs; and
    • the adverse costs exposure.
  1. There may be a spike in claims against service providers in the aged care sector. Much will depend on how the current Royal Commission into Aged Care pans out.
  2. Expect courts to take a more interventionist approach where appropriate when approving settlements to ensure the reasonableness of legal fees and net returns to funders relative to the net returns to group members.
  3. Short sellers will come under the microscope.


1Perera v GetSwift Limited (2018) FCAFC202; 363 ALR394.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)