Legal development

Western Australias new class actions regime is now in action

24 April 2023

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    What you need to know

    • A new class actions regime has come into effect in Western Australia.
    • The Civil Procedure (Representative Proceedings) Act 2022, which was enacted in September 2022, commenced on 25 March 2023.  The Act provides for representative proceedings (otherwise known as class actions) in the Supreme Court of WA and is substantially modelled on Part IVA of the Federal Court of Australia Act 1976 (Cth).  The Act is also substantively consistent with the analogous provisions in other states.
    • The Rules of the Supreme Court 1971 (WA) and the WA Supreme Court's Consolidated Practice Directions have been amended to support the implementation of the Act and provide guidance as to how class actions will be run in the Court.
    • As class actions are now entrenched as a feature of the Australian litigation landscape, this is a welcome change that brings Western Australia into alignment with other class actions regimes across the country.

    The new class actions regime

    The substantive provisions of the Civil Procedure (Representative Proceedings) Act 2022 (the Act), which was enacted in September 2022, commenced on 25 March 2023.

    The Act provides for class actions (referred to in the Act as "representative proceedings") in the Supreme Court of WA.  The new regime provides plaintiffs with a new forum for filing class actions and enables class actions to be pursued in WA for state-based claims and causes of action.

    The Rules of the Supreme Court 1971 (WA) (RSC) have been amended, including by the introduction of new Order 18A titled "Representative proceedings under the Civil Procedure (Representative Proceedings) Act 2022.  The Supreme Court has also issued a new Consolidated Practice Direction 9.19 to provide guidance as to how class actions will be run in the Court.

    Key features of the new regime

    The key features of the WA class actions regime, as set out in the Act, the RSC and Consolidated Practice Direction 9.19, are summarised below.

    Standing & scope of proceedings
    • A class action can be commenced in the name of one or more "representatives" on behalf of 7 or more persons who have claims against the same respondent(s).
    • The persons who are claiming against the respondent(s) in a class action are known as "group members".
    • The claims of all group members must:
      (a) be in respect of, or arise out of, the same, similar or related circumstances; and
      (b) give rise to a substantial common issue of law or fact.
    • The relief sought by each group member does not need to be the same.
    • Where there is more than one respondent, each group member is not required to have a claim against every respondent in the proceeding.
    • The proceeding can be commenced regardless of whether the proceeding relates to separate contracts or transactions between the respondent and individual group members, or involves separate acts or omissions of the respondent in relation to individual group members.
    Group members
    • The consent of a person to be a group member in a class action is not required unless that person falls into a particular category (for example, the Commonwealth or a Minister).
    • If a person does not wish to be a group member, they must opt out of the class action. The Court will fix a date by which group members must opt out.
    Resolution of issues not common to all group members
    • The claims of all group members are not required to overlap completely.
    • The Court may give directions in relation to the determination of issues which are not common to all group members.
    • For example, the Court may establish a sub-group to determine issues common to some group members; or the Court may permit an individual group member to appear for the purpose of determining an issue that relates only to that members. The sub-group representative or the individual group member will be liable for costs associated with the determination of the separate issue, as the case may be.
    • The Court may also give directions relating to the commencement and conduct of a separate proceeding, where a separate issue cannot be conveniently dealt with within the class action process.
    Settlement / Discontinuance
    • A class action may only be settled or discontinued with court approval and there are conditions that must be complied with when making an application for approval.
    • Where a proposed settlement contemplates deductions for legal costs or litigation funding charges, the Court may appoint a referee to determine the proportionality of costs, whether the litigation funding charges ought reasonably and properly be allowed, and any other relevant matters.
     Notice Requirements
    •  Notice must be given to all group members of various matters during the proceedings, including:
      (a) the commencement of the class action and the right of the group members to opt out of the action before a specified date; and
      (b) an application for the Court's approval of a settlement of the class action.
    Costs & litigation funding
    • The Court may not award costs against any group member except for the representative party; or a sub-group representative or individual group member in relation to the determination of a separate issue.
    • A litigation funder may be engaged to fund the class action.
    • The claimants must disclose any costs agreement or litigation funding agreements to all group members, the Court and the other parties to the proceedings.
    Case management
    • Class actions will be case managed by a judge in a Representative Proceedings List.
    • A first directions hearing will be fixed on a date within six weeks of filing.
    • A strategic conference will then be listed to determine the steps required to progress the application and set a date by which group members must opt out of the action.
    Suspension of limitation periods
    • The running of any limitation period that applies to the claim of a group member suspends on commencement of a representative proceeding.
    • Limitation periods will not begin to run again in relation to a group member unless the group member opts out or the proceeding (including any appeals arising from it) is determined without finally disposing of that group member's claim.
    Competing class actions
    • The legal practitioners of the representative party must notify the Court of any overlapping representative proceedings also being managed by the Court.
    • The Supreme Court will display a current list of Class Actions when they occur. This may be useful in tracking whether overlapping or competing class actions have been lodged.

    Advantages of class actions

    Commencing proceedings by way of a class action can bring many advantages, including:

    1. Potential for reduced legal costs - Class actions allow claims which are individually of a low value to be pursued in a time and cost effective manner.  They avoid the need for multiple proceedings to determine those claims.  There remain risks that interlocutory disputes regarding issues which would not arise in individual proceedings, such as challenges to the constitution of the group or the determination of issues for sub-group members, can increase legal costs.  However, where there is a large number of group members, the costs involved in a class action are still likely to be significantly lower than pursuing individual claims.
    2. Flexibility of remedies - The court may order a wide variety of relief.  For example, it may determine an issue of law or fact, make a declaration of liability, grant any equitable relief, or award damages.  In awarding damages, the court may either identify specific amounts for individuals or particular classes of group members, identify methods of calculating a specific amount for individuals or particular classes of group members, or determine an aggregate amount without specifying how much must be paid to individual group members.
    3. All group members are bound – Generally, all group members do not actively participate in the litigation.  The court hears the representative party's case and makes a decision, including on the common issues.  Consent to be a group member is not required and unless the group member opts out before the required date, they are bound by the outcome of the litigation.  This can provide for greater certainty when managing litigation risk concerning multiple parties.

    Outlook for class actions in WA

    The new regime brings WA into line with the regimes operating in other states and at the federal level.  The Act and the associated rules and practice directions are substantially modelled on Part IVA of the Federal Court of Australia Act 1976 (Cth) and are also substantively consistent with the regimes in Victoria, New South Wales, Queensland and Tasmania.

    The Federal Court's class actions regime is the longest standing in Australia and has overwhelmingly been the preferred forum for class actions in Australia.  For class actions that concern matters within the Federal Court's jurisdiction, the Federal Court is expected to remain the preferred forum.

    However, the WA regime will enable class actions to be pursued in WA for state-based claims and causes of action, such as claims under WA legislation or claims in tort for negligence which operate at the state level.

    Enhanced case management procedures in WA, such as the requirement to bring the matter on for a case management conference at an early stage, may help to prevent class actions from being unnecessarily delayed by interlocutory disputes which have often plagued class actions in different jurisdictions. Consolidated Practice Direction 9.19 sets out in clear terms that the class action procedures are intended to facilitate the just, efficient, timely and cost-effective conduct of representative proceedings by ensuring that the real issues in dispute are identified at an early stage and that proceedings are not unnecessarily delayed by interlocutory disputes. One key difference to the federal regime is that the WA practice directions are generally a lot broader, giving the Court wide discretion to case manage the class action in a way that facilitates these aims. This means that whether the aims of the regime are met will depend on the approach taken by judges in charge of the new Representative Proceedings List.

    The broad nature of the practice directions also means that not all class actions will be run in the same way in WA. For example, one area of uncertainty concerns how issues which are not common between group members will be managed in an efficient manner. While the Practice Directions provide that the Court may make directions regarding the determination of uncommon issues, they are silent as to when such directions can be sought and what they might look like.

    Based on the experiences of the other states, we expect the new regime will only lead to a modest increase in class actions and the use of litigation funding services in WA in the immediate future. Still, the new regime is a welcome change that brings Western Australia into alignment with the rest of the country and provides greater certainty for class actions litigation in WA.

    Section 36 of the Act mandates a review of the operation and effectiveness of the regime in five years’ time. It will be interesting to see what the uptake of the regime is in this period and whether there is enough experience to adequately assess the regime's effectiveness at that time.

    Authors: Adrian Chai, Partner; Charles Dallimore, Lawyer; Yasoda McGeary, Lawyer.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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