The successful appeal of the ANZ bank class action last week could make penalties claims much harder, warns lawyer.
Jenny Campbell, partner at Allens has told Australasian Lawyer that the recent decision in the ANZ bank class action could throw a spanner in the works for other class actions.
“I think that the decision on Wednesday will be a significant hurdle when it comes to the other penalties cases that are said to be in the works, for example utilities and telecommunications companies. It’s certainly going to make penalties claims much harder to bring than was previously the case,” she said.
A recent report by Allens found that class actions have become increasingly common and that companies in Australia are more likely to face class action litigation than in any other jurisdiction, other than corporations operating in the United States.
A report by Maurice Blackburn on the other hand, said that the number of class actions in Australia remains low and steady. It concludes that there have only been 15 class actions in the Federal Court every year since the inception of the regime, amounting to just 0.3 per cent of the 5,000 matters filed in the Court each year.
While there is debate around the direction that class action numbers are trending in, both Allens and Maurice Blackburn agree that the number of cases is not disproportionate to Australia’s population.
Allens’ report found that the number of class actions in 2014 was the highest it has ever been, however the same number was reached in 2010.
The report attributes the occurrence of class actions in Australia to a number of factors, including a focus on corporate governance and the endorsement of various peak regulators on the importance of class actions, the business opportunity for more firms to develop class action practices and the facilitation of class actions by the courts.
“There is a lot of debate about whether class actions in Australia are out of control or not,” said Campbell. “My view is that there is no doubt that we are seeing more class actions now than ever before but we’re not seeing the sort of explosion of class actions that people were talking about five or six years ago. I don’t think that the flood gates have opened.”
While class actions have impacted companies of many industries, Campbell anticipates further class actions in the banking and finance sector.
“I do think that they have become quite a target for class actions; the bank fees cases are the classic example of that but we’ve also seen a number of class actions brought by investors against banks and other financial services organisations,” she said. “I think that banks, as very large commercial organisations with deep pockets are going to be a sector of the market that the class action promoters are always going to be focussed on.”