GETTING INVOLVED IN CLASS ACTIONS
Class action. The words evoke images of shared justice finally delivered; of consumers banding together to force the big guys to come to the table. When large groups of people are hit by the illegal actions of a business, this often results in calls for a class action. But what does that actually mean, and is it worth your time to get involved?
What is a class action?
In NSW, a class action is a legal proceeding in which seven or more people, all of whom have claims arising from the same or similar circumstances, sue a large corporation or company. A representative, either one person or more, would lead the action on behalf of the large group, or ‘class’.
A class action results from a collective grievance, and has to highlight a serious issue of fact or of law that affects everyone for whom the claim is being made. That issue could be breaches in consumer rights or human rights, exposure to harmful products or dangerous conditions, harm to the environment, and more. Two recent prominent examples of grievances suitable for class actions are the 2022 Medibank and Optus data breaches. Major law firms are now looking into both cases.
Is it expensive?
Generally, it doesn’t cost anything upfront to get involved in a class action. Legal firms may operate on a contingency fee or Group Costs Order, which means they recover their fees by taking a percentage of any settlement, or the case may operate on what’s known as a ‘no win, no fee’ basis.
In other cases, an unrelated third party may provide funding to run the class action, and will receive a percentage of the settlement in return.
If you are part of a class action, you will need to discuss this with the legal team involved, to understand their fee structure and basis for payment. Additionally, the ‘loser-pays’ rule applies in Australia, which means the losing party usually pays the costs of the winner.
Do I have to go to court?
Usually, if you are a member of the ‘class’ being represented in the class action, you won’t have to go to court. The representative plaintiff – the one chosen to present the grievance on behalf of themselves and the group – is the one who must prove the case in court.
Is it worth it?
Getting involved in a class action can be worth it for those who win. Many class actions result in massive payouts in millions of dollars, shared amongst those who brought the case. But it is important to be aware of the risks involved, including that you may not win or that the win may be small financially after legal costs are deducted. If you’re involved in a class action or considering getting involved in one, be sure to speak with the lawyers representing the case about what you need to do, and the potential personal risks.
How can I join a class action?
If you believe you have a group grievance that could be addressed through a class action, you should approach a class action specialist. If you feel that you should be part of a class action that has already commenced, contact the law firm representing that action to find out what you need to do.