Australian litigators raise the bar for Europeans re class actions 'downunder'

Sydney, 20 July 2006: The invitation for two litigators from Clayton Utz, Australia's leading defence lawyers, to join the European Justice Forum (EJF)[1] signals European lawyers desire to understand first-hand how Australia is handling the recent growth of a class action movement in Australia.

Stuart Clark the Managing Partner of the Clayton Utz Litigation and Dispute Resolution Department has been invited to join the EJF along with his colleague Colin Loveday. Commenting on their appointment Mr Clark said there is a resurgence of class action activity in Australia as well as an increasing incidence of Australian plaintiffs seeking to join class actions in the United States.

"Australian institutions are increasingly concerned about whether they should join as class members in US security class actions," Mr Clark explained. "On the other hand we are also hearing that certain Australian institutions are being advised by class action lawyers that if they don't join in some of the local class actions that they may in turn be exposing themselves to class actions from either their members or their investors.

"Our practice predicted this trend several years ago so we have been actively advising institutional clients about the problems associated with class actions.

"We believe that the growth of shareholder class actions in the US has had a significant and adverse impact on their market, because the cost of that litigation is very significant for the business community. We're talking about billions of US dollars. This has a range of impacts such as the very defensive way in which new IPOs proceed in the US, for example. The state of play in the US in relation to class action has been creating a very different approach to the practice of corporate law in the US, compared to Australia.

"We have to ask how likely is it that some of this will rub off on Australia? And already Australia is recognised as the place outside North America where a corporation will most likely be forced to defend a class action.

"Europe recognises the fact that currently it is actually a lot easier to launch a class action here than in the US, and there's no doubt that the EJF 's decision to invite two of us from one firm to join the Forum means that the Europeans want to learn from our experience.

"In Europe they are seeing significant pressure from plaintiff's groups and particularly American plaintiff lawyers seeking to introduce a system of class actions similar to that found in the US into the continental European market. As a consequence I was invited to France last year to speak to a group debating the proposed new class action system in France.

"The Europeans recognise that we have the experience in Australia of running these class actions and of the problems and they are telling us they want to learn from our experience and learn about some of the pitfalls so that this assists them in representing our clients in Europe."

[1] The EJF is a not-for-profit organisation dedicated to maintaining Europe's traditional approach to litigation, and in particular legislation governing class actions, product liability, contract and anti-trust law. It provides a network to monitor legal developments in the conduct of litigation, and produces regular communication on major trends and themes in the international litigation environment. The EJF involves a network of leading lawyers from Europe, USA, Australia and South American jurisdictions.