Highs and lows of 24 years of class actions

By Sarah Danckert
Updated July 30 2016 - 2:18am, first published 12:15am
This week, the ANZ Bank won a High Court appeal over an initial Federal Court decision that found its late payment fees were too high. Photo: Erin Jonasson
This week, the ANZ Bank won a High Court appeal over an initial Federal Court decision that found its late payment fees were too high. Photo: Erin Jonasson
Settlements in the class actions brought by victims of the Kilmore and Murrindindi-Marysville bushfires in February 2009 achieve total settlements of $794 million. Photo: Jason South
Settlements in the class actions brought by victims of the Kilmore and Murrindindi-Marysville bushfires in February 2009 achieve total settlements of $794 million. Photo: Jason South
The Centro class action resulted in the biggest shareholder settlement in Australia's history. Photo: Michel O'Sullivan
The Centro class action resulted in the biggest shareholder settlement in Australia's history. Photo: Michel O'Sullivan

Highlights

  • New laws In March 1992 an amendment to the Federal Court of Australia Act enabled class actions to be run in Australia. The first case launched in Australia was brought by a group of grantors against NZI Securities over allegedly misleading and deceptive conduct. The matter was settled in 1995.
  • Black Saturday payouts Settlements in the class actions brought by victims of the Kilmore and Murrindindi-Marysville bushfires in February 2009 achieve total settlements of $794 million. The operator of the power lines that fell sparking the fires forked out $494 million to settle the Kilmore action – marking it the largest settlement in Australian history. While the pace of distributions to victims has been criticised by some, the payouts will bring some financial relief to people affected by Australia's biggest peacetime catastrophe. More bushfire class actions are now being considered.
  • Centro class action The biggest shareholder settlement in Australia's history. After the Australian Securities and Investments Commission won a case against the directors and executives of the nearly failed property group for breaching their duties when signing off on the company's faulty accounts, two class action trials began. After weeks of testimony the company and its auditor PricewaterhouseCoopers agreed to a $200 million settlement. The settlement gave redress to shareholders, some of whom in the original company restructure only received 5c a share on stock once worth more than $10.

Lowlights

  • Class action failures This week, the ANZ Bank won a High Court appeal over an initial Federal Court decision that found its late payment fees were too high. But it's not the first big loss. In 2012, Slater & Gordon had to pay out $10.5 million in legal fees over the failed class action against Merck Sharp & Dohme over allegations people suffered heart attacks after taking the drug Vioxx. More recently in May this year, a group of 34 first home buyers lost a class action against a developer taking procession of their property.
  • "Abuse of process" A class action in the Federal Court in Victoria was recently described as an "abuse of process" by presiding judge Justice Lindsay Foster and thrown out. Along with describing the case as "at best very weak if not hopeless", Justice Foster was not satisfied with the litigation funding arrangement underpinning the matter.
  • Poor advice Law firm M+K Lawyers were criticised in a Senate inquiry report for advising their clients in the Great Southern class action to stop paying off their debts to the agribusiness giant in the hope of a class action win. The action was resolved in a $23 million settlement which barely covered legal costs and left Great Southern's investor-borrowers further in the red. 

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