Class Actions

Question 1

Criteria for a class action

Answer 1

• Seven or more people are claiming against the same defendant
• The claim must be in respect of or arise from the same, similar or related circumstances
• The claim must give rise to a common issue of law or fact, meaning the same issues are determined by the court for all claims

Question 2

People in a class action

Answer 2

• A class action is usually commenced by a single person who represents the group or class, called the lead plaintiff
• The people who form part of the group are known as group members

Question 3

Additional obligations for the lead plaintiff in a class action

Answer 3

• Assuming the risk and cost of litigation on behalf of the entire group
• Ensuring the claim serves the interest of the group members in not pursued solely for personal benefit
• Providing instructions to their lawyers regarding the conduct of the claim and making decisions regarding settlement or negotiations
• Filing the case under their own name

Question 4

5 types of class actions

Answer 4

• Workplace accidents
• Medical malpractice
• Financial malpractice
• Preventable natural disaster
• Faulty or dangerous goods or services

Question 5

Strengths of class actions

Answer 5

• Litigation funders allow for more class actions to be entered
• They are managed by the most senior and experienced judges in the supreme and federal court
• Juries are available to ensure impartiality
• Class actions are more efficient way of dealing with a number of claims, saving time and court resources
• Class actions reduce costs for defendants by allowing them to respond to multiple claims without going through separate proceedings
• They are usually supported by experienced lawyers, ensuring the case is presented in the best possible light for all group members

Question 6

Weakness of class actions

Answer 6

• The lead plaintiff is required to assume the risk and cost of litigation on behalf of the entire group
• Juries are not available if a class action is commenced in the federal court
• If litigation funding is not obtained, the lead plaintiff may not be willing to bear the costs associated with bringing the action
• The share given to each plaintiff after costs may be minimal, especially after a large percentage of damages is provided to litigation funders
• Class actions can be extremely costly, requiring a 3rd party to fund, which, without funding, may not commence
• They can take a long time to be heard and completed, often taking several years due to the amount of evidence required, therefore delaying remedies and justice
• Some group members may not get adequate or up to date information about the proceedings