Thinking about starting or joining a class action? Maybe you're already part of one and want to make sure it's the right decision for you. The law surrounding class actions in Australia is vast and complex, and deciding whether you want to take part is not always easy.
What is a class action?
Class actions, or representative proceedings, occur when one person, the 'lead applicant', represents an entire group of claimants known as the 'group members'. The lead applicant and group members must have suffered a similar loss or wrongdoing, giving rise to a common cause of action against the same party/parties responsible. There can be more than one lead applicant, depending on the nature of the case.
Some examples of recent class actions in Australia can be found here.
Taking part in a class action
It is commonly thought that to become part of a class action, an you must proactively register your interest. This, however, is not usually the case. Most class actions in Australia are run on an 'opt-out' model; even if members don't actively sign up, they will be part of the claim if they meet a set of eligibility criteria. These eligibility criteria will depend on the facts of the case in question, and work to ensure each person in the class has the same, or highly similar claims against the defendant. Each person who meets these criteria will be automatically included in the action unless they choose to opt-out.
What it means to be part of the group
The main consequence of becoming a group member is that, unless an individual chooses to opt-out, they will be bound by the final outcome of the class action, whether that be an award of compensation or dismissal of the case. Despite this, group members have minimal involvement in the actual running of the case. Unless they are the lead applicant, members are not required to instruct lawyers, pay legal fees or take an active role in the case.
Should I opt-out?
Generally, if you classify as a group member, you will be required to opt-out by a particular date set down by the Court. A public notice will be published prior to this date, often in a major national newspaper, that sets out how you can opt-out of the action. There are various reasons why an individual may not wish to be part of a class action:
- The class action might not address their particular claim or needs.
- Different members of the class action may have conflicts of interest.
- The money from a successful claim may be lower than if an individual claim was pursued.
In such cases, other legal options, such as bringing a private legal claim, may be more appropriate.
Shine Lawyers: Australia's class action experts
To find out more about class actions, or to get in touch for an obligation-free first consultation with our class action experts, visit Shine Lawyers' Class Action service.
Written by Shine Lawyers on July 25, 2017. Last modified: September 27, 2018.