High court endorses class action ‘beauty parades’

High Court Class Action

The High Court has endorsed a common sense approach to the case management of competing class actions and affirmed the jurisdiction of first instance courts to determine how class actions proceed.

What are competing class actions?

Competing class actions involve multiple class actions commenced against the same defendant and concerning the same subject matter. The class actions may substantially overlap, including with respect to group member definitions and claim periods.

According to the Parliamentary Joint Committee on Corporations and Financial Services in its 21 December 2021 report into ‘Litigation Funding and the Regulation of the Class Action Industry’, while concurrent class actions are common in Australia, they undermine the objectives of the class action regime, which is for a single decision to resolve claims that are the same or similar in nature.

However, before recommendations from the Parliamentary Joint Committee could be implemented, the High Court has weighed in on the topic.

Wigmans v AMP Limited & Ors [2021] HCA 7

The Wigmans class action is one of five class actions commenced in the NSW Supreme Court against AMP Limited covering similar, but not identical, grounds. The class actions involve claims from shareholders of AMP during periods in which AMP allegedly failed to disclose, to the market, information that ultimately emerged during the Banking Royal Commission.

Of the five class actions, two were consolidated, and the plaintiffs in the consolidated proceedings sought orders that the other proceedings be permanently stayed. The NSW Supreme Court ruled that the consolidated proceedings should continue, while the other proceedings be stayed.

Following a process commonly referred to as a ‘beauty parade’, the trial judge relied on the multifactorial test to determine that the funding model in the consolidated proceedings, being a no-win, no-fee model, would most likely provide the best return to group members.

The Wigmans appealed to the NSW Court of appeal on the basis that allowing only the consolidated proceedings would be an abuse of process. The Court of Appeal dismissed the appeal, & the Wigmans appealed to the High Court.

The High Court’s decision

In a 3:2 decision, the High Court dismissed the Wigmans’ appeal.

In doing so, the High Court affirmed the jurisdiction of the NSW Supreme Court to regulate competing class actions, recognising that they could be no ‘one size fits all’ approach, but that the NSW Supreme Court can examine the merits of the competing class actions and progress the action in the best interests of group members.


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