A class action lawsuit involves multiple people filing a lawsuit against an individual or organisation. A group of people or businesses can file a class action lawsuit against a common defendant.
This means that the group of business, or group of individuals have suffered from some common injury, issue or loss.
People consider a class action lawsuit in situations when their individual claims are too small. When a group of individuals make a damages claim, it is considered a class action lawsuit.
For example, if certain employees have faced injury due to a common employer, the group of employees can file a class action lawsuit against that employer.
There are two important terms to keep in mind. Firstly, plaintiffs bring the claim forward against a respondent. In the above example, the employees are plaintiffs, and the respondent is the employer.
Class action lawsuit is important as it increases the chances of success when a group of people are making claims against a common respondent. If a single individual has to make the same claims, things can get very stressful. This is especially true if the defendant is a large corporate or government entity.
This article will explore different aspects related to class action lawsuit in Australia.
Factors Plaintiffs Need To Consider
Before proceeding with a lawsuit, the plaintiffs should consider certain things. Given below is a list of factors that plaintiffs should consider.
1 – Chance of success
The plaintiffs need to consider whether the respondent has committed a serious wrong. If plaintiffs are confident that they have a chance for a successful outcome, they can proceed with the lawsuit.
2 – Can plaintiffs recover damages?
They should be confident about the prospects of recovering damages. These lawsuits can be expensive, therefore, all members of the lawsuit should be confident that they can recover damages.
Requirements For Class Action Lawsuit In Australia
The Federal Court and State Supreme Courts of Australia such as the NSW Supreme Court handle such lawsuits. In order to file a lawsuit, there are certain requirements.
- Firstly, the group must consist of at least 7 people who are making a claim;
- The plaintiffs must be facing either same issue/injury, or some related issue;
- The claims must be related to at least one common issue of law.
Australian legislation has an opt-out model. This means that:
- All plaintiffs automatically become a member of the class when filing a claim.
- All plaintiffs will be bound by the judgement of the court, unless they opt-out of the process. Those who wish to opt-out need to do so before a specific date. It is important for all plaintiffs or claimants to be aware of their rights to opt-out, and to be aware of their proceedings.
- Judgements are not binding on claimants who have opted-out of the process. Following this, the plaintiff can launch an individual case if they wish to.
Notably, in countries that allow an opt-in model, each plaintiff is required to explicitly state their intention to be a part of the proceedings. In the opt-out model, this happens automatically, until and unless they opt-out.
How To Proceed With A Class Action Lawsuit
There is one lead plaintiff who will represent the entire cohort of plaintiffs. The lead plaintiff makes allegations against the respondent. Importantly, these allegations of injury must be the same or similar to those of other plaintiffs.
The lead plaintiff has the responsibility to demonstrate that all plaintiffs have a strong claim against the respondent. Moreover, he/she will also need to show that all claims are similar.
Once this is done, the Court will certify the class. As mentioned above, under Australian legislation, the opt-out model means that all plaintiffs will automatically become a member of the class.
Examples Of Such Lawsuits
- SP AusNet: Australia
One of Australia’s biggest lawsuit includes power distributor SP AusNet, and asset managers Utility Services Group.
A class action lawsuit was filed on behalf of survivors of Victorian bushfires in 2009 (Black Saturday bushfires). The bushfires had devastating impacts. It claimed 119 lives, and destroyed about 1,000 homes.
- Sigma Pharmaceuticals: Australia
Many shareholders (nearly 600) filed a lawsuit against Sigma Pharmaceuticals in 2010. The shareholders made allegations that the company engaged in deceptive conduct and breached certain disclosure obligations.
The company paid 57.5 million Australian dollars to the litigants.
- AOL Time Warner: USA
Investors filed a lawsuit against AOL Time Warner for fraud under federal securities law. The organisation reportedly forged many transaction documents to show a higher advertising revenue than they were actually generating.
The organisation reached a settlement of US 2.5 billion dollars.
Litigation Lawyers: JB Solicitors
Before proceeding with class action lawsuit, it is important to try dispute resolution. This saves time and money. Parties are encouraged to consider methods such as conflict mediation, round-table negotiation and arbitration.
Where these methods fail to reach a conclusion, parties must proceed with the lawsuit. There are many steps involved in a trial such as discovery, trial and settlement. This is a lengthy and complicated process.
In either case, our lawyers at JB Solicitors are here to help all clients. If you choose to opt for arbitration, rest assured because we have award-winning lawyers on our team. We also have the experience of representing clients in court cases and lawsuits.
As a first step, it is important to gain legal advice and understand all your options. Once you are aware of all alternatives, our lawyers will guide you and help you choose the right method to resolve the dispute.
Alternatively, contact us through our enquiry forms and our team will be in touch with you. You can also call our office at 1300 287 911.