The Western Australian class action regime is now live

By David Benson, Will Atfield, Alex Corsaro and Gabriella Lim
30 Mar 2023
Time to read: 2.5 minutes

WA's class actions regime will most likely be used for WA-related mass claims, with the Federal Court continuing as the leading forum of choice for class actions in Australia.

Class action reform in Western Australia had been under consideration for more than a decade. In September 2022, WA became the fifth Australian State to enact a class actions regime. However, the regime did not commence immediately, giving the WA Supreme Court the opportunity to develop supporting practice directions to ensure that class action proceedings are conducted efficiently and fairly.

The Court's Consolidated Practice Directions (CPDs) have now been updated to provide procedural guidance as to how class actions are to be conducted and managed in the jurisdiction, and the regime has now come into effect.

The Consolidated Practice Directions: key takeaways

The new part of the CPDs (CA Directions) provides procedural guidance as to how several common challenges that arise in class actions should be navigated in the jurisdiction.

The CA Directions are similar to the equivalent documents in the Federal Court and other State courts where class actions are available. However, one notable difference is that the CA Directions are less detailed and prescriptive than some of the equivalent documents. One possible explanation for the lighter-touch approach is that in the early stages of the regime, the WA Supreme Court would prefer to have additional flexibility in the case management of class actions.

Legal costs

The CA Directions seek to manage transparency of legal costs and litigation funding in four ways.

First, they stipulate that if the representative party's lawyers are going to charge any applicable legal costs or litigation funding charges, those lawyers should ensure that group members are notified of those costs and charges as soon as practicable and in clear terms. Further, notice of any material changes to those arrangements should be promptly given to group members. Failure to discharge these obligations may be taken into account by the WA Supreme Court in approving any settlement.

Secondly, the representative party's lawyers must email, on a confidential basis, unredacted copies of any costs agreement and/or litigation funding agreement to the associate of the managing judge before the first directions hearing. Any amended versions of these documents must also be provided to the Court.

Thirdly, the representative party's lawyers must serve copies of any costs agreement and/or litigation funding agreement on all other parties to the class action. However, these copies may be redacted to conceal any information which might be reasonably be expected to give a tactical advantage to another party to the proceeding (for example, any budget or costs estimates).

Finally, where a proposed settlement contemplates that any part be used to reimburse the representative party's lawyers for the unrecovered legal costs, or for paying any litigation funding charges, the WA Supreme Court may appoint a referee to determine whether those costs are reasonable and proportionate, and ought to be permitted.

Competing class actions

Lawyers of the representative parties must notify the managing judge as soon as practicable after becoming aware of an overlapping or competing class action being managed in the WA Supreme Court.

In our view, consideration could be given to extending this obligation so that notice needs to be provided of any overlapping or competing class action, regardless of the court in which that competing action is being managed. This would be more consistent with the Federal Court's approach and would be a practical step given the volume of class actions that are commenced in the Courts in the Eastern States.

Determination of individual claims

Increasingly, judges in other jurisdictions are faced with the difficult decision on how to approach the determination of individual claims that are not resolved on the common questions, and no uniform approach has emerged. The CA Directions stipulate that where there are individual issues remaining following determination of the common questions, the managing judge shall give directions as to next steps. Once again, one possible explanation for this approach is the WA Supreme Court would prefer to have additional flexibility in the case management of class actions.

Class action risk in Western Australia

When these reforms were first announced, we expected the Federal Court would continue to be the leading forum of choice for class actions in Australia, in part because it has the longest history of such proceedings, while the Supreme Court of Victoria's popularity would continue to grow, given the contingency fee provisions which are favourable to plaintiff law firms and funders. We still believe this to be so.

It also remains our expectation that any class actions initiated in the WA Supreme Court, as opposed to another jurisdiction, will have a strong nexus to Western Australia, such as mass tort or negligence actions relating to natural disasters or environmental events in Western Australia.

Getting proof of that might take some time, however. Following equivalent reform in Tasmania, it took almost two years for a class action to be commenced so it will also be interesting to see how long it is before a class action is commenced in WA.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.