Class actions scrutinised

By Kate Tilley

The new tort of privacy, once legislated, corporates’ climate change and ESG reporting requirements, and crypto currency traders are all areas ripe for potential future class actions.

That was the view from defendant lawyer Amanda Beattie, a partner with Wotton + Kearney, and Rebecca Jancauskas, a director with plaintiff firm JGA Saddler, when the pair discussed “trends, tensions and triumphs in class action litigation” at the AILA conference.

Ms Beattie said shareholder class actions had slowed in 2024, but that was not an indication there would be significantly fewer in future. She noted settlements, which “spark great deadlines” like “no more go away money”, were more common than judgements.

 “A lot of plaintiff lawyers are moaning but filings have been relatively steady,” Ms Jancauskas said.

Caption: L-R Rebecca Jancauskas and Amanda Beattie.

Roundup case dismissed

Session chair Liana Isaac, special counsel at Wotton + Kearney, asked the pair about Federal Court Justice Michael Lee’s July class action judgement where there was insufficient evidence to prove a common weed killer product caused cancer.

After hearing evidence in a lengthy trial, Justice Lee said, on the balance of probabilities, the 800 plaintiffs failed to prove their exposure to the product's active ingredient, glyphosate, caused non-Hodgkin lymphoma.

Justice Lee acknowledged the scientific community’s mixed views about the risks of Roundup, manufactured by Monsanto, and said further research could provide a more definitive answer.

Ms Jancauskas said Justice Lee found no clear link with the epidemiology.

“It was an unfortunate decision where we couldn’t get a causal link,” she said.

“It highlights that causation is a hairy challenge for us and a cautionary tale for many seeking to bring cases.”

Ms Beattie said Justice Lee found it “useful to understand the science” and it was likely more experts would be used in future class actions to resolve complex science questions.

Data breach actions

Asked about the potential for data breach cases – like Medibank and Optus’s well-publicised failures – to spark class actions, Ms Beattie said actions had been filed against Medibank and Optus, but not against Latitude Financial – yet. The Australian Communications and Media Authority had filed against Optus. In both the Medibank and Optus cases there were “stoushes over expert reports” and whether or not they were privileged.

Ms Jancauskas said the Federal Government’s response to the 2023 Privacy Act review gave the impression it would adopt most of the recommendations. However, the draft Bill tabled in Federal parliament during the AILA conference established a new tort for serious privacy invasions, but did not include a direct right to action.

The privacy tort required actions to be defined as “serious, reckless and intended to cause harm, therefore I’m not sure if a cybercrime would meet the criteria. Plaintiff firms and funders see a growth area for cyber claims”.

Ms Jancauskas said consumer class actions, including for privacy breaches and defective medical products, cladding and cruises, historically dominated but the class action industry has matured and shareholder class actions have come to the fore.

Consumer actions were assisted by the Australian Consumer Law’s (ACL) consumer guarantees, compared with the finance space grappling with whether an act was unconscionable.

“Liability can be clear cut for a breach of the ACL. However, with small losses in a big group, it can be unviable to distribute compensation.”

Competing class actions

Ms Jancauskas said competing class action claims lodged by different plaintiff firms against defendants for the same action were “a blood sport”, but consolidation was emerging as a trend, with courts “focusing on the interests of group members, those at the heart of the case”.

Ms Beattie said employment law claims had been identified as an area with a large number of potential claimants. There was uncertainty about the construction of enterprise bargaining agreements and rest break clauses. The Federal Government’s Fair Work “closing loopholes” legislation changed some definitions, but the ‘contract is king’ approach remained reality in the workplace.

Ms Isaac asked about different approaches to quantification of loss.

Ms Jancauskas said aggregate damages were currently rare. “Courts can award for all of a class or a subgroup if a reasonably accurate assessment can be made. It’s a useful avenue if it’s difficult to identify individual losses.”

Ms Beattie said there were definitely cases where aggregate damages were a good idea.

Ms Jancauskas said in privacy cases and other actions “we’re seeing ‘distress and disappointment’ awards”. For example, in Scenic Cruises, claimants were awarded $6,000 to $20,000 each “to reflect that their dream holiday didn’t pan out how they had hoped. It’s not an enormous head of damage on its own, but we will see more of it.”

Cruise trauma compensated

In July 2023, after almost a decade of litigation, Scenic Group was ordered to pay $26 million in compensation and costs in a class action over the cancellation of 13 river cruises in 2013 after heavy rainfall in Europe meant claimants travelled by bus instead of on cruise ships.

Ms Beattie said privacy actions were becoming more complex because, for example, for a domestic violence victim having their address published on the internet may have way more impact than for someone else.

Asked to predict areas for future class action claims, Ms Jancauskas said “ASIC has been taking action against crypto asset players, [so] we’ll see activity there”.

Ms Beattie said ASIC already had some wins in actions against corporates that made false ESG claims “and we’ll see more action there. Mandatory climate action reporting is passed. It will take time and some immunities are there, but there are a lot of question marks”. Requirements for disclosures on supply chains also could prompt actions.

Asked by barrister Kevin Holyoak about security of costs, each lawyer’s response reflected their respective roles.

“It depends on the judge, the court and funding arrangements but we would pursue it aggressively,” Ms Beattie said.

“We would resist vigorously and get away with as much as we can.” Ms Jancauskas said.

Photo credit: AILA 2024 Conference photos supplied warringtonphotography.com.