A record 63 class actions were filed in Australia between 2020 and 2021 according to research published by King & Wood Mallesons. That is despite increased regulatory pressure on litigation funders after treasurer Josh Frydenberg announced in March 2020 when funders would have to abide by tough new rules set by the Australian Securities and Investment Commission.
The Review: Class Actions in Australia 20/21 indicates that at least 20 class action settlements were approved in the 12 months to June 30 2021, representing an astounding $850M in total settlement funds.
Research showed the three main types of claims were consumer claims (24) related to Covid-19 actions, pharmaceutical products and medical devices, claims against the state (12) for the recovery of wages for indigenous workers and Covid-19 outbreaks in Victoria, and employment claims (11) lodged against public health services relating to wage underpayment.
There was a notable drop in new actions involving a litigation funder this past year, particularly after the introduction of additional regulatory requirements applying to funders from August 2020. Just 19% of actions were backed by a litigation funder after the new requirements went into effect — the lowest proportion of funded actions since 2013/2014 — compared to 65% prior to the regulatory changes, according to the report.
The report further highlighted that in the 15 years since the High Court decided litigation funding was not an abuse of process or contrary to public policy, litigation funders have become an integral part of the Australian legal market.
Class actions have been on the rise overseas in recent years, as different jurisdictions begin to adopt procedures used to fuel the many class actions filed in the US. Recently, Deloitte’s German legal arm teamed up with German boutique firm Frommer Legal to establish a new law firm focused on defending companies against class actions in Münich amid a rise in European class action lawsuits.
And earlier this year, a study published by CMS revealed that class actions in the EU and the UK grew by 120% from 2018-2018 as a result of the introduction of US-style opt-out procedures in the UK and the Netherlands, with the number of technology cases having increased 15-fold over the last four years.