Queensland introduces class actions: A new Landscape - Class Actions

The Limitation of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016 (Qld) recently received royal assent. Among other things, this piece of legislation has introduced a regime for representative proceedings, otherwise known as class actions, into Queensland.

Queensland is only the third State to introduce a class action regime. The Federal Court's class action regime came into operation in the early nineties. Victoria was the first State to bring in the regime back in 2000 and New South Wales followed suit in 2011. The portion of the legislation introducing the class action regime in Queensland has yet to be proclaimed and its commencement date is unknown.

WHY IS A CLASS ACTION REGIME IMPORTANT FOR QUEENSLAND?

The introduction of a class action regime into Queensland will enable Queenslanders to seek redress more cheaply and efficiently in their home jurisdiction.

Previously, Queenslanders who wished to bring class actions had to do so either through the Queensland registry of the Federal Court, or in New South Wales and Victoria. There are obvious limitations to both approaches. The Federal Court is limited in its jurisdiction to dealing with federal subject matter, potentially giving the respondent an opportunity to attack the Court's jurisdiction to hear the matter.¹ Similarly, although the State Supreme Courts may have jurisdiction over disputes that have minimal connection with the home State,² running disputes in another State is more costly for all parties and can add several layers of complication both legally and logistically.

This means that there is likely to be an increase in the number of law firms conducting investigations into potential class actions in Queensland, and a likely increase in the number of Queenslanders willing to consider taking part in class actions.

Queensland-based respondents could save significant legal costs and logistical challenges in having the matter heard locally, rather than in the more expensive southern States. In addition, while the class action regime shifts the balance of power in favour of the plaintiff, the aggregation of claims into a class action may still benefit a respondent in allowing it to avoid defending multiple potential proceedings over the same set of factual circumstances, which inevitably leads to higher costs.

WHAT HAPPENS NEXT?

Number of class actions

19 class actions were filed in the first five years of operation of the NSW regime, and 18 class actions in the first five years of the Victorian regime.³

Historically, there have been class actions arising out of Queensland that have commenced in other jurisdictions. The Queensland floods class action is being run in the Supreme Court of New South Wales, and since 2013, five class actions have also been filed in the Queensland registry of the Federal Court of Australia. Two of these have been filed since July 2016.

Based on the statistics from Victoria and New South Wales, and the number of class actions arising out of Queensland filed in other jurisdictions, it is reasonable to assume that, on average, four or five class actions will be commenced in Queensland each year.

Types of class actions

From 1992 to 2016, the most commonly litigated class actions have been product liability matters (18.3%).⁴ The landscape is, however, changing. From 2004 to 2016, 27.6% of class actions were claims by investors other than shareholders, and 24.8% were claims by shareholders.⁵ Product liability claims came in fourth at 11.6%.⁶

Because the Federal Court has a corporations jurisdiction, it's likely investor and shareholder class actions will continue to be litigated in the Federal jurisdiction. The class actions currently being run in New South Wales and Victoria cover a broad spectrum of matters, such as bush fires, payday loans, navy training (failure to obtain certain qualifications), personal injury in detention and product liability, and it is likely that matters such as these will also be run in Queensland.

HOW WILL THIS CHANGE THE LANDSCAPE?

There's no reason to suggest that the Queensland experience will be different from that in Victoria and New South Wales, or in the Federal court. Plaintiffs or law firms who were previously reticent to commence class actions because of the issues arising out of litigating interstate may now decide to conduct an action in Queensland and the major class action plaintiff firms already have operations in Queensland.

Over the last 12 years, a dozen class action proceedings were commenced in the Federal Court in Western Australia, South Australia, and the Australian Capital Territory.⁷ It's possible that causes of action arising in these remaining jurisdictions without a class action regime may be litigated in Queensland, as a cheaper alternative.

Victoria and New South Wales may have led the way. Queensland, however, will learn valuable lessons from both States while charting its own course over the next few years.

Footnotes

¹ Grave, D, Adams, K and Betts, J, Class Actions in Australia (Second edition) (2012), at page 96.

² Grave, D, Adams, K and Betts, J, Class Actions in Australia (Second edition), 2012, at page 97.

³ Morabito, V, An Empirical Study of Australia's Class Action Regimes Fourth Report: Facts and Figures on Twenty-Four Years of Class Actions in Australia (2016), at page 17.

⁴ Morabito, V, An Empirical Study of Australia's Class Action Regimes Fourth Report: Facts and Figures on Twenty-Four Years of Class Actions in Australia (2016), at page 11.

⁵ Morabito, V, An Empirical Study of Australia's Class Action Regimes Fourth Report: Facts and Figures on Twenty-Four Years of Class Actions in Australia (2016), at page 12.

⁶ Morabito, V, An Empirical Study of Australia's Class Action Regimes Fourth Report: Facts and Figures on Twenty-Four Years of Class Actions in Australia (2016), at page 12.

⁷ Morabito, V, An Empirical Study of Australia's Class Action Regimes Fourth Report: Facts and Figures on Twenty-Four Years of Class Actions in Australia (2016), at page 16.

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