An Evidence-Based Approach to Class Action Reform in Australia: Closed Class Actions, Open Class Actions and Access to Justice

2018 ◽  
Author(s):  
Vince Morabito
Keyword(s):  
Class Action ◽  
Access To Justice ◽  
Evidence Based ◽  
Class Actions ◽  
Closed Class ◽  
Open Class

Necessity is the Mother of Invention: The Adoption of Third-Party Litigation Funding and the Closed Class in Australian Class Actions

2009 ◽  
Vol 38 (3) ◽  
pp. 245-267 ◽  
Author(s):  
Michael Legg ◽  
Louisa Travers
Keyword(s):  
Class Action ◽  
Third Party ◽  
Access To Justice ◽  
Contractual Relationship ◽  
Class Actions ◽  
Closed Class ◽  
Opt Out ◽  
Group Members ◽  
Contingency Fees ◽  
Financing Gap

Australian class actions have recently undergone a revolution in relation to the financing of litigation and group definition. Australia has historically banned contingency fees and adopted an opt-out class action. However, the law now allows for third-party litigation funding where non-lawyers may finance class actions in return for a share of the recovery and for the class action to be defined as a closed class that only includes those group members who have entered into a litigation funding agreement. These developments have important ramifications for class action practice. Litigation funding filled the financing gap in Australian class actions and consequently facilitated access to justice. However, the need for a contractual relationship to allow for the quasi-contingency fee to be recovered led to the employment of a closed class. The closed class dissuaded ‘free-riding’ but also undermined the Australian class action objectives of access to justice and efficient resolution of disputes.

Understanding the Economics of Class Actions

2021 ◽  
pp. 87-120
Author(s):  
Michael Molavi
Keyword(s):  
Rational Choice ◽  
Rational Choice Theory ◽  
Choice Theory ◽  
Class Action ◽  
Access To Justice ◽  
Class Actions

This chapter delves into one of the strongest arguments in favour of the access to justice potential of class actions, which can be found in the rational choice theory of orthodox economics. It explains the economic access to justice framework that is based on the recognition that the class action allows the pursuit of claims that would not be pursued by rational actors. It also talks about how class actions allow the pursuit of negative value claims or claims in which the value of the claim is outweighed by the costs of its pursuit. The chapter elaborates how allowing for ideological representatives to advance claims on behalf of harmed groups can contribute towards preventing injustices by deterring misconduct by potential wrongdoers. It explores important issues pertaining to the economics of class actions that impact the access to justice and are achieved through mass litigation.

scholarly journals Reforming New Zealand's Class Action Procedures to Enhance Efficiency and Improve Access to Justice

2021 ◽  
Author(s):  
Danielle Thorne
Keyword(s):  
New Zealand ◽  
Class Action ◽  
Access To Justice ◽  
Efficient Procedure ◽  
Legislative Reform ◽  
Class Actions ◽  
Opt Out ◽  
Action Type ◽  
Enhance Efficiency ◽  
Action Procedure

<b>Abstract </b><p>This thesis addresses the question of whether New Zealand should reform its class action procedures in order to better meet the class action objectives of efficiency and access to justice. Class actions are a mechanism whereby groups of claimants with the same or similar claims can band together and bring proceedings. The ability for groups of similarly affected claimants to bring proceedings together provides certain advantages, including efficiency (both judicial efficiency and cost efficiency) and access to justice (where there may otherwise be none). The existence of a class action mechanism can also have a regulatory effect and serve to discourage illegal or inappropriate conduct. </p> <b>Currently, New Zealand does not have a dedicated class actions regime, and instead operates a class action type procedure under r 4.24 of the High Court Rules (known as a representative action). A review of the New Zealand position in relation to r 4.24 indicates that while there is a substantial body of law relating to the use of the representative action procedure, the objectives of the representative action procedure are not being met. The lack of legislative guidance in relation to the representative action has created significant difficulties for claimants in New Zealand. </b><p>Reforming the New Zealand class action procedure through legislative reform would provide a more efficient procedure and enhance access to justice. Wholesale legislative reform in the form of a dedicated class actions statute would be the best way forward for New Zealand. Legislative reform would need to address particular issues that have arisen in Australia and Ontario, including issues associated with the same interest requirement, opt-in and opt-out mechanisms, settlement requirements and limitation periods. The experience in Ontario and Australia illustrates the importance of ensuring the legislation is as clear as possible, and learning from the experience in those jurisdictions is vital if the objectives of the class action procedure are to be met. </p>

CANADIAN REFLECTIONS ON THE TOBACCO WARS: SOME UNINTENDED CONSEQUE5NCES OF MASS TORT LITIGATION

2004 ◽  
Vol 53 (3) ◽  
pp. 579-604
Author(s):  
Jeff Berryman
Keyword(s):  
United States ◽  
The United States ◽  
Class Action ◽  
Large Impact ◽  
Access To Justice ◽  
Mass Tort ◽  
Class Actions ◽  
Tort Litigation ◽  
Mass Torts

During the 1990s many Commonwealth legislatures enacted ‘class action’ or ‘representative proceedings’ legislation.1The main justification for these initiatives was to increase access to justice for claimants particularly where the injury was widespread but the harm suffered by any particular individual was small. Much of this legislation built on developments in the United States, which had developed a sizable jurisprudence in the area. ‘Mass torts’, those defined as having a large impact engaging multiple claimants, have often formed the cause of action in US class actions. A review of the website ‘Big Class Actions‘,2which lists over one hundred current suits in the United States, is instructive on how the class action industry has grown in that country.

scholarly journals An empirical analysis of class actions in South Africa

2020 ◽  
Vol 24 ◽  
Author(s):  
Theo Broodryk
Keyword(s):  
South Africa ◽  
South African ◽  
Empirical Analysis ◽  
Data Access ◽  
Class Action ◽  
Access To Justice ◽  
Class Actions ◽  
Comprehensive Data ◽  
Opt Out ◽  
Available Information

ABSTRACT As far as the author is aware, there has not been an empirical analysis of class actions in South Africa since the introduction of the mechanism by the interim Constitution of 1993 more than 25 years ago. There is no publicly available data which provides meaningful empirical insight into the operation of the South African class action. There is consequently much that we do not know about it. This article attempts to examine class actions over a period spanning more than 19 years. The purpose of the article will be to provide, through an analysis of case law, an empirical exposition of class actions instituted in South Africa using the criteria and methodology mentioned below. The study demonstrates that, although there have been only a limited number of certification judgments delivered to date, there has been rapid growth in the number of certification judgments delivered in the past five years. Most of these judgments are aimed at providing access to justice for poor and marginalised individuals. The data presented herein could place South Africa in the fortuitous position of being able to build a comprehensive data archive in which the class action is statistically dissected. Without comprehensive data concerning the operation of the class action, the available information will be insufficient from the perspective of providing adequate insight to enable its optimal development going forward. Keywords: Class action; empirical data; access to justice; certification; opt-in; opt-out; bifurcation; settlement

scholarly journals The initiation and operations phase of the litigation funder – class action law firm relationship

2018 ◽  
Vol 60 (2) ◽  
pp. 595-626
Author(s):  
Vicki Catherine Waye
Keyword(s):  
Strategic Alliance ◽  
Ethical Issues ◽  
Class Action ◽  
Legal Rights ◽  
Law Firms ◽  
Access To Justice ◽  
Law Firm ◽  
Positive Role ◽  
Content Type ◽  
Class Actions

Purpose Drawing on “Strategic Alliance” literature and qualitative research methods, the purpose of this study is to examine the initiation and operations phases of the relationship between Australian litigation funders and class law firms. The initiation phase examines factors such as complementarity between needs and assets compatibility between the funder and the class law firm goals of the alliance trust and alliance structure. The operations phase considers factors such as governance, communication and risk management and accountability. Because of its focus on the fairness of settlement, case law provides limited understanding of the drivers of the class law firm and funder relationship. An “inside look” of how the funder-law firm is initiated and made operational provides a more accurate picture and has important implications for the management of the ethical issues that arise during the course of that relationship. Design/methodology/approach This paper is a content analysis and contains qualitative interviews. Findings The strategic alliance between class law firms and litigation funders has evolved within an institutional climate that has acknowledged the benefits that the alliance can bring to the conduct of class actions. That same institutional environment has led to an alliance which is informal and transactionally oriented, where each of the parties maintains a demarcation in function. Although they share aspects of the strategic management of class actions, funders continue to be diligent monitors of class law firms, and class law firms continue to advance the legal rights of class members. Research limitations/implications It is observed that the size of the sample is small driven by a number of market participants. Practical implications The paper confirms that the litigation funder–law firm strategic alliance works well as a result of institutional constraints. Social implications Each of the alliance partners was keen to ensure that neither they nor their partner acted in a way which might attract judicial disapproval. Each also believed that they played a positive role in promoting class member interests, albeit that their primary motivation was to earn fees or a commission. The success of the alliance between class law firms and litigation funders has substantially improved access to justice in Australia for small claims holders. Originality/value The paper provides insight into a strategic alliance which is formed primarily for the benefit of third parties. This is one of the first papers to consider the litigation funder–law firm relationship through the lens of strategic alliance literature.

scholarly journals When Pragmatism Leads to Unintended Consequences: A Critique of Australia’s Unique Closed Class Regime

2018 ◽  
Vol 19 (1) ◽  
pp. 303-332
Author(s):  
Vicki Waye ◽  
Vince Morabito
Keyword(s):  
Ethical Dilemmas ◽  
Critical Mass ◽  
Federal Court ◽  
Unintended Consequences ◽  
Class Action ◽  
Law Firms ◽  
Access To Justice ◽  
Res Judicata ◽  
Closed Class ◽  
Opt Out

Abstract In an effort to ensure access to justice, Australian courts have fashioned a unique hybrid opt in-opt out process known as “closed classes.” The rationale that underlies closed classes is to prevent free-riding that may undercut the position of funders and class action law firms reliant upon entering into agreements with a critical mass of class members. However, multiple closed classes also pose problems for respondents seeking the comfort of finality. To secure settlement and thus ultimately benefit participating class members, Australian courts have formulated a procedure whereby the closed class is opened and nonparticipating class members are invited to either register their claims or opt out so that thereafter those who do not register and those who opt out are effectively precluded by res judicata from making further related claims. We argue that Australian courts’ support of closed classes, while driven by pragmatism, has produced unintended consequences. Many relate to the ethical dilemmas faced by class action law firms and litigation funders seeking to advance the interests of participating class members over and above those of nonparticipating class members. The Full Federal Court has recently approved an alternative common fund approach. However, questions remain as to whether Australian courts are appropriately equipped to measure and compare the alternative transaction costs associated with the current and proposed approach, and whether they are appropriately equipped to determine the commercial rectitude and fairness of litigation funding agreements.

scholarly journals The South African Class Action Mechanism: Comparing the Opt-In Regime to the Opt-Out Regime

2019 ◽  
Vol 22 ◽  
pp. 1-17
Author(s):  
Theo Broodryk
Keyword(s):  
South African ◽  
Class Action ◽  
Access To Justice ◽  
Constitutional Court ◽  
Preferential Treatment ◽  
Class Actions ◽  
Opt Out ◽  
To Come ◽  
The Individual ◽  
Do So

In Mukaddam v Pioneer Food (Pty) Ltd 2013 2 SA 254 (SCA), Nugent JA stated that, once the class is confined to claimants who choose positively to advance their claims and are required to come forward for that purpose, he can see no reason why they are not capable of doing so in their own names through joinder – they do not need a representative to do so on their behalf. The members who choose to opt in to the class action will thus be identifiable. If that is the case then, according Nugent JA, joinder may be the appropriate procedural device. A problem evidenced by this approach is accordingly that, by suggesting that joinder is the appropriate procedural device where all the claimants are identifiable, rather than a class action, the court essentially attacked the viability of the opt-in regime of class action litigation. The preferential treatment afforded by our courts to the opt-out class action regime is further reinforced by the finding of Nugent JA that the opt-in class action regime can be utilised only in exceptional circumstances. As exceptional circumstances had not been proved, he found that a class action was not the most appropriate way to pursue the claims. He accordingly suggested that joinder was a viable option to pursue the claims. The opt-in class action regime requires individual class members to take positive steps to participate in the class action. In other words, class members are required to come forward and opt into the class action, failing which they will not be bound by or benefit from the outcome of the litigation. Support for the opt-in regime is essentially premised on the belief that individuals who are unaware of the litigation should not be bound by its outcome. The opt-out class action regime, on the other hand, automatically binds members of the class to the class action and the outcome of the litigation unless the individual class members take steps to opt out of the class action. Support for the opt-out regime is essentially based on the view that the opting-in requirement could undermine one of the primary purposes of class action litigation, which is to facilitate access to justice. The Constitutional Court in Mukaddam v Pioneer Foods (Pty) Ltd 2013 5 SA 89 (CC) held that Nugent JA was wrong to find that an applicant in an opt-in class action is required to show exceptional circumstances. However, the court did not provide reasons for its disagreement. The issue relating to exceptional circumstances in opt-in class actions was dealt with in two sentences. The Constitutional Court also failed to deal with the nature and status of the opt-in class action compared with opt-out class actions in South African law. The note will accordingly consider when, if at all, it is appropriate to use the opt-in class action regime compared to the opt-out class action regime.  

Access to Justice and the Limits of Environmental Class Actions in Ontario

2020 ◽  
Vol 35 (3) ◽  
pp. 391-412
Author(s):  
Michael Molavi
Keyword(s):  
Case Studies ◽  
Integrated Assessment ◽  
Holistic Approach ◽  
Class Action ◽  
General Level ◽  
Access To Justice ◽  
Representative Case ◽  
Class Actions

AbstractFor over half a century, it has been axiomatic that environmental claims are particularly well suited for class actions. This paper examines this notion in the context of Ontario’s regime and finds that environmental class actions have been limited in the extent to which they have promoted access to justice. Starting with a brief overview of class action history in Canada and the economics of mass litigation at a general level, the paper then analyzes barriers specific to environmental claims. A series of representative case studies is then offered to substantiate the central contention on the limits of environmental class actions. In so doing, the paper takes a holistic approach, incorporating empirical, economic, political, and procedural factors and dynamics to provide an integrated assessment about the type of access to justice that is presently achieved and achievable for environmental claims in Ontario.

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