• Phone
  • 02 8046 3913
  • Email
  • enquiries@aequitaslitigationfunding.com.au
  • Location
  • Level 35, One International Towers, 100 Bangarooo Avenue, Sydney NSW 2000

Class Actions

What is a class action?
A class action is a court case in which a group of people sue a single party. There will usually be at least one ‘lead plaintiff’ that represents all of the people involved in the class action. All of the other claimants in the class action are known as ‘group members’.

It is the lead plaintiffs who runs the case with the lawyers and appears in court on behalf of the class. Generally group members are not obligated to be involved in the case until:

  • a court decides the defendant’s liability; and
  • the court needs to assess the basis of each claimant’s losses.

If the claim is successful, the court will often fairly divide the compensation amount between all of the members of the class based on:

  • calculations in relation to quantum; and
  • occasionally, other methods relevant to the case.

Class actions allow greater access to justice for people with the same claim and generally results in a faster and more cost-effective way to bring claims before the courts.

How do I join a class action?
In Australia, class actions operate on an ‘opt-out’ basis. This means that when the lead plaintiff brings the case the group members might not initially know about the claim but become members of the class action through the process.

Once the case is before the court it will make an order requiring the publication of a notice to bring the case to the attention of all potential group members. The notice will generally:

  • outline the particular legal claim that the plaintiff(s) are making; and
  • provide group members with a deadline to ‘opt out’ from the claim if they do not want to be a part of it.

Group members who do not respond to the notice willcontinue to be represented in the class action and be bound by the outcome of the case.

Group members therefore stand to gain from any settlement or judgment by this process. However, those group members who do not ‘opt out’are unable to bring their own court proceedings relating to the same issues as those in the class action.

How are class actions funded?
The lead plaintiff assumes the risk and cost of the class action. Broader class members do not have to pay any legal fees as a general rule.

In practice, most class actions in Australia are funded by litigation funders. They receive a share of the compensation if the case is successful in exchange for funding the class action.

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