26 July, 2019
Civil Procedure (Representative Proceedings) Bill 2019 (WA)
What you need to know
- On 26 June 2019, the Civil Procedure (Representative Proceedings) Bill 2019 (WA) was introduced into the WA Parliament. The Bill provides for representative proceedings in the Supreme Court of WA and is substantially modelled on Part IVA of the Federal Court of Australia Act 1976 (Cth). The Bill contains similar provisions to Part IVA and also is substantively consistent with the analogous provisions in the regimes in other states.
- The Bill was introduced in response to the report by the Law Reform Commission of Western Australia in June 2015, which found that order 18 rule 12 of the Rules of the Supreme Court 1971 (WA), which presently deals with representative proceedings, is inherently uncertain and inadequate to facilitate large representative actions.
- It remains to be seen what effect the Bill will have on WA related matters if enacted, noting that the majority of class actions to date have had a national or eastern states connection and have historically been dealt with in the Federal Court, which now has judges and registrars who specialise in class actions.
What are the main features of a class action?
Some notable aspects of the Bill are:
- proceedings are commenced in the name of a single "representative" on behalf of 7 or more persons;
- consent to be a "group member" of the representative proceedings is not required but a group member may "opt out" of the proceedings prior to a certain date;
- causes of action accruing after commencement of the representative proceedings may be dealt with as part of the representative proceedings;
- the Court may discontinue proceedings in circumstances where costs incurred in the proceedings are likely to exceed the costs that would be incurred if each group member conducted separate proceedings (among other reasons);
- notice of certain matters must be given to group members, including in relation to commencement of the proceedings and the date to opt out of the proceedings;
- the Supreme Court may order the constitution of a fund consisting of the money to be distributed to group members; and
- representative proceedings cannot be settled or discontinued without the approval of the Court.
Differences between the Bill and other Australian regimes
Following commencement of Part IVA of the Federal Court of Australia Act in 1992, various states adopted similar regimes. These regimes have been adopted in New South Wales, Victoria and recently Queensland. It remains to be seen whether the Northern Territory, Tasmania, South Australia and the ACT will follow suit.
There are a number of minor differences between each of the regimes, and WA has had the benefit of observing and considering how each regime has worked in the other states. Some key differences are as follows:
- In NSW, a court may discontinue proceedings if the representative party is unable to adequately represent the interests of its group members. There is presently no such provision in the Bill.
- The Bill provides that it is not necessary that each claimant have a claim against every named defendant. As noted in the explanatory memorandum for the Bill, this provision was inserted in order to avoid the effect of Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487, which is authority for the proposition that, under the Federal Court of Australia Act, group members must have a claim against all respondents. This provision was inserted notwithstanding doubt having been cast over this proposition in Cash Converters International Limited v Gray [2014] FCAFC 111. This issue is not addressed in the federal or Victorian regimes, but is addressed in the Queensland and New South Wales regimes.
- Both the Bill and the regime in NSW contain provisions permitting a Court to determine sub-issues for sub-groups. However the Bill, but not the regime in NSW, contains a provision which provides that a representative of a sub-group, as opposed to the representative party, may be liable for costs associated with determining the sub-issue.
Will the Bill improve access to justice?
The aims of Part IVA of the Federal Court of Australia Act was described in Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Ltd [2016] FCAFC 148 at [177]:
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"…the central aims of Part IVA of the Act include enhancing access to justice and increasing the use of judicial measures by allowing a common, binding decision to be made in one proceeding instead of in multiple proceedings…such purposes underpin class action regimes around the world".
Likewise, Attorney General Quigley has identified the purpose of the Bill as being improving access to justice for claimants.
Given the cost of litigation, many claims are not pursued because the amount likely to be recovered is too small relative to the costs of prosecuting a claim in court. However, when many persons suffer a similar loss, albeit of a low value, an opportunity arises to deal with them at the same time in a cost effective manner. The experience under the class action regimes in the Federal Court of Australia Act and in the other states suggests that the new regime will enable claims to be prosecuted which would otherwise be uneconomical to pursue.
Will there be an increase in the prevalence of class actions in WA?
The Bill provides WA litigants with a clear alternative to the Federal Court and will enable class actions to be brought where there is no federal cause of action or jurisdiction. In other states, class actions have been brought in the tort of negligence under the state regimes, including in relation to disasters affecting large numbers of claimants, such as bushfires and floods.
If enacted, the Bill will likely result in:
- an increase in the number of representative actions being commenced in the WA Supreme Court, which have dwindled in recent years;
- a reduction in costs associated with pursuing representative actions in the WA Supreme Court;
- improved certainty for parties when considering their options with respect to commencing or defending a class action and identifying the associated costs; and
- depending on the response to enactment of the Bill, dedicated WA Supreme Court resources.
While the immediate impact of a new class action regime for WA remains to be seen, it is likely to significantly alter the local litigation landscape.
For further information, please contact:
Adrian Chai, Partner, Ashurst
adrian.chai@ashurst.com
