Class actions coming to Queensland Courts

Queensland’s Attorney-General, Yvette D’Ath, has today announced that the government will proceed with long-awaited class action reforms.

The reforms to class actions (also known as ‘representative proceedings’) will mean that these actions will be able to be conducted in the Queensland courts in substantially the same manner that they can already be conducted in New South Wales, Victoria and in the Federal Court.

While the Queensland court rules already allow for what are known as ‘representative party proceedings’, it is widely acknowledged that these provisions are inadequate and discourage litigation involving large numbers of claims.

In the past, this state of affairs was thought to protect Queensland businesses from class action litigation, however recent experience has demonstrated that the claims will simply be brought in different jurisdictions, often increasing the cost and inconvenience to Queensland businesses in defending such proceedings.

The reform process to date

Under the present regime outlined in the Queensland court rules, it is difficult to launch a class action in Queensland.

Those rules allows for a limited ‘representative party’ jurisdiction, in which:

A proceeding may be started and continued by or against one or more persons who have the same interest in the subject matter of the proceeding as representing all persons who have the same interest and could have been parties in the proceeding.

The requirement that all claimants have the ‘same interest’ has limited the ability for claimants to start a representative action because it is rare that all claimants have exactly the same claim against a defendant.

Another drawback of the current Queensland regime, which is unfavourable to both claimants and respondents, is that a representative party proceeding does not prevent or discourage litigation involving similar claims from being conducted separately from the main proceeding. This means Queensland businesses are often required to fight multiple pieces of litigation addressing the same issues either at the same time or in succession, dramatically increasing costs.

Given the expansion of the jurisdiction of the Federal Court and the increasingly interstate nature of trade and commerce in Australia, it is frequently possible to invoke the jurisdiction of the Federal Court or the courts of New South Wales or Victoria.

Faced with a choice of jurisdiction, many claimants conducting class action claims have chosen to file the claim in courts with court rules that facilitate the more efficient resolution of their claims. An example of this is the litigation involving claimants who had lost property in the 2011 floods of the Brisbane and Bremer Rivers, who made the decision to file the claim against the operators of the Wivenhoe dam in the New South Wales Supreme Court.

In January 2014 the Bar Association of Queensland (BAQ) wrote to the then Attorney-General, Jarrod Bleijie, to outline deficiencies in the law and the need for reform. The BAQ strongly advocated for the Queensland Government to implement legislative change to establish a class action regime. The BAQ’s vice-president, Shane Doyle QC, stated:

There is a degree of urgency in these steps being undertaken if possible to avoid the likelihood of significant numbers of Queensland plaintiffs being compelled to litigate their disputes interstate.

In response, on 26 November 2014, Mr Bleijie introduced the Justice and Other Legislation Amendment Bill 2014 to Queensland Parliament, which would have implemented a wide range of reforms, including a representative proceedings regime that would have closely followed the regime in the Federal Court.

The Bill was referred to committee, but the committee did not have an opportunity to report before the dissolution of the Parliament on 6 January 2015.

With the election of a new government, most bills introduced by the previous government did not proceed while the new government pursued different priorities. However, the representative proceedings reforms have always enjoyed broad, bipartisan support in the Parliament and in the legal community, which has meant that the reforms have remained on the agenda.

Comment

We are yet to see whether the legislation that will now be introduced will be in the same terms as the lapsed 2014 Bill, however it seems likely that it will soon be easier for class actions to be brought and managed in the Queensland courts.

While there is some potential that this could encourage more claims, past experience has shown that the more likely scenario is that, in the absence of reforms, the same claims would be pursued, but just in a jurisdiction that does allow class actions. As a result, the current state of the law in Queensland serves to increase costs for Queensland businesses by forcing them to conduct litigation outside their home state.

Litigation, including claims involving many claimants, is, unfortunately, becoming a real risk for many Queensland organisations. Court procedures that facilitate the fair and speedy resolution of claims at a minimum of expense will, in the long run, benefit all users of the justice system, including businesses that may find themselves as a respondent to those claims.

Cooper Grace Ward’s dispute resolution group has experience in advising on class action matters and associated risks. If you would like more information about how our group can help you, or information about this publication, please contact Rocco Russo on +61 7 3231 2468.