This month, the Victorian Supreme Court resolved a multiplicity dispute between competing class actions brought against energy company Beach Energy and granted the third ever Group Costs Order.
The competing class actions were represented by Slater & Gordon and Shine Lawyers. Both proceedings also sought to run the class action using a Group Costs Order (a contingency fee), with Slater & Gordon seeking 24.5%, and Shine seeking 24.5% up to $100m, 18% between $100m and $150m, and 15% above $150m. The Court awarded sole carriage of the class action to Slater & Gordon and permanently stayed the competing Shine class action.
In permitting the Slater & Gordon class action to proceed, the Court acknowledged that there was no “striking feature” to distinguish the two class actions, given similar Group Costs Orders were sought, and the claims were substantially similar. The factor given most weight was the Court’s view that the pleadings in the Slater & Gordon proceeding were “notably more particular and comprehensive”. While it was not a factor accorded “significant weight,” the Court also considered that the “standard of legal work” in the proceeding was superior in the Slater & Gordon class action.
The Court also awarded a Group Costs Order in the Slater & Gordon proceeding pursuant to s33ZDA of the Supreme Court Act 1986 (Vic). Under the order, the legal costs payable to Slater & Gordon will be 24.5% of the amount of any judgment award or settlement obtained. The Court noted that the rate of 24.5% would “likely warrant revisiting.”
In granting the Group Costs Order, the Court took into account a range of factors including that :
- group members were guaranteed to receive not less than 75.5% of any compensation recovered.
- the existing funding arrangements between the law firm and the plaintiffs were not likely to result in a better outcome than the Group Costs Order.
- the Group Costs order would permit the calculation of costs at a reasonable rate, by comparison with the likely alternative form of funding.
- the Group Costs Order would provide a readily understandable and straightforward means of calculating legal costs.
For further information, please contact:
Jason Betts, Partner, Herbert Smith Freehills