DP8 Class actions Flashcards
What is a class action?
A legal proceeding in which a group of 7 or more people who have a claim against the same defendant, based on similar or related facts, join together to bring that claim to court under the name of one person, who is the lead plaintiff.
Which court hears class actions?
The Supreme Court, which is the only dispute resolution institution within the Victorian civil justice system that hears class actions. They cannot be heard in tribunals or other courts (however mediation and other can occur). Most class actions are settled in mediation prior to trial, and the Supreme Court oversees such settlement to ensure it is fair and reasonable for all members.
What is the lead plaintiff?
One member who commences the proceedings on behalf of the group, and is responsible for the costs if the class action is not responsible. Other plaintiffs are called group members and do not a actively participate in the case (e.g do not need to appear in court).
What are the benefits of a class action for plaintiffs?
Plaintiffs who do not have the money or time to pursue their claim otherwise can pursue their claim in a class action, as group members usually do not have to bear costs. Furthermore, the class action is often funded by a litigation funder, which is a legal firm or organisation that bears the costs. However, litigation funders usually take between 20-40% of the settlement.
What are the benefits of a class action for defendants?
It can reduce the cost, as the defendant does not need to respond to multiple claims in separate proceedings, and instead, one large proceeding for multiple claims
What are the benefits of a class action for the legal system?
Class actions are a more efficient way for the court to deal with multiple similar claims, saving the time and resources of the court. However, courts oversee class actions, which may take a large amount of time, especially if it has not been settled.
When are class actions appropriate?
Class actions are appropriate where there are 7 or more people with the same or similar claim against the same defendant, there someone is willing to be the lead plaintiff. If there is no leaf plaintiff, then the class action cannot occur. Furthermore, they are only appropriate where the claim is large enough to make it worth the effort or cost. Because class actions are large and complex, and are heard in the Supreme court, legal representation is recommended and thus the costs would be large. Additionally, since there are a large amount of plaintiffs, the settlement amount or amount of damages needs to be appropriate for the amount of group members in the class action. If there is a litigation funder, then the lead plaintiff avoids the burden of costs.
When are class actions not appropriate?
If there is no one willing to be the lead plaintiff, class actions may not be appropriate. Because there are large risks involved with being the lead plaintiff, including the large costs involved, people may not want to be the public face of the action, and thus class actions may not be appropriate. Furthermore, if the claim is relatively small, it may not be worth pursuing the claim as a class action, and thus the claim may be more suited to non-judicial methods, such as CAV/VCAT or other courts. Additionally, if there is no litigation funder or law firm willing to fund the claim (e.g not likely to succeed or claim too small), then the lead plaintiff will need to incur all costs and thus may not be appropriate. Finally, if an individual has suffered significantly more than other group members, they may prefer to conduct their own proceeding and thus class actions may not be appropriate.
