Class Actions Practice Note (GPN-CA)

J L B Allsop, Chief Justice 25 October 2016

General Practice Note

1. Introduction

1.1 This practice note sets out the arrangements for the management of class actions matters within the National Court Framework ("NCF"). It applies to actions commenced under Part IVA of the Federal Court of Australia Act 1976 (Cth) ("Federal Court Act") and:

(a) it is to be read together with:

the Central Practice Note (CPN-1), which sets out the fundamental principles concerning the NCF of the Federal Court and key principles of case management procedure. The Central Practice Note is an essential guide to practice in this Court in all proceedings;

Part IVA of the Federal Court Act and Division 9.3 of the Federal Court Rules 2011 (Cth) ("Federal Court Rules"); and

any National Practice Area ("NPA") practice note of the NPA within which the class action is managed, such as the Commercial and Corporations Practice Note (C&C-1).

(b) it takes effect from the date it is issued and, to the extent practicable, applies to proceedings whether filed before, or after, the date of issuing (so far as the circumstances permit);

(c) it is intended to set out guiding principles for the conduct of class actions and is not intended to be inflexibly applied; and

(d) applies to all class actions. However, practitioners should also familiarise themselves with the General Practice Notes that operate across NPAs (see the further practice information in Part 16 below).

1.2 Taking into account that this practice note uses the common expressions "class action" and "class member" instead of "representative proceeding" and "group member", words and expressions in this practice note that are defined in Part IVA of the Federal Court Act and
r 9.31 of the Federal Court Rules have the meanings given to them in that Part and rule.

2. Objectives

2.1 The aim of this practice note is to:

(a) address some of the practical issues which frequently arise in class actions and to indicate the Court's expectations regarding the management of those issues; and

(b) facilitate the efficient and expeditious conduct of class actions, in particular by ensuring that the issues that are in contest are exposed early in the proceeding and that class actions are not unnecessarily delayed by interlocutory disputes.

2.2 A practitioner who anticipates problems in complying with any aspect of this practice note is expected to raise the matter with the Court as early as is practicable.

3. Commencement of Class Action Proceedings

3.1 A class action is to be commenced by filing an originating application in accordance with Form 19. The originating application, statement of claim (Form 17) or affidavit (Form 59) filed in support of the application must, in accordance with s 33H of the Federal Court Act:

(a) describe or otherwise identify the class members either by name or characteristic;

(b) specify the nature of the claims and the relief claimed by the applicant on its own behalf and on behalf of the class members; and

(c) specify the common questions of law or fact which are said to arise in the action.

It will usually be the case that the concise statement pleadings process contemplated by the Central Practice Note and the Commercial and Corporations Practice Note will be inappropriate for use in class actions.

3.2 The statement of claim should be drawn so that the applicant's personal claim can be used as the vehicle for determining the common questions in the action. Ordinarily the trial of the action will be aimed at resolving all common questions together with any non-common questions raised by the applicant's personal claim (eg. the applicant's individual claim for damages).

4. Case Management

Allocation of Class Actions

4.1 At an appropriate time soon after filing, the class action will be allocated to a docket judge to conduct a trial of the proceeding ("Docket Judge"). In appropriate cases, a designated case management judge may also be assigned to the proceeding ("Case Management Judge").

The Different Judicial Roles

4.2 Where a Case Management Judge has been assigned to a class action, the role of that judge is to conduct the first and subsequent case management hearings so as to case manage the proceeding expeditiously and efficiently, particularly in relation to the interlocutory disputes that commonly arise in class actions. The Case Management Judge will also hear certain applications which may be more appropriately heard by a judge not hearing the trial (eg. depending on the circumstances, certain legal professional privilege disputes).

4.3 The role of the Docket Judge is to preside over the trial of the proceeding, deal with pre-trial issues and, where a Case Management Judge is not assigned, to case manage the proceeding and hear all interlocutory applications therein.

4.4 The Case Management Judge and the Docket Judge will work collaboratively to ensure an efficient and consistent approach to the management of the proceeding, including any interlocutory disputes and the pre-trial and trial phases of the proceeding. The case management process will be flexible and tailored to the particular needs of the case and the parties.

4.5 Taking into consideration these roles the parties should contact, or may be contacted by, the associate of the relevant judge in relation to any case management issue that may be identified.

The Role of the Class Actions Registrar

4.6 In appropriate cases a registrar of the Court may also be assigned to a class actions proceeding as a Class Actions Registrar.

4.7 If a Class Actions Registrar is assigned, the role of that registrar is to assist the judge or judges and the parties in the proceeding.

5. Disclosure to Class Members Regarding Costs Agreements and Litigation Funding Agreements

5.1 In this practice note:

costs agreement:

means any fee and retainer agreement and costs disclosure entered into between the applicant's lawyers and the applicant and/or any class members, whether in standard form or otherwise;

litigation funding agreement:

means any agreement by which a litigation funder is to pay or contribute to the costs of the proceeding, any security for costs or any adverse costs order and/or to receive payment of commission, costs or charges of any type in relation to the proceeding, whether by way of third-party or commercial litigation funding or by way of litigation funding provided by some of the class members;

legal costs:

means any legal costs and disbursements (including those estimated) to be charged to class members;

litigation funding charges:

any litigation funder's commission, fees and other charges (including those estimated) to be charged to class members.

5.2 Any costs agreement and litigation funding agreement must be in writing.

5.3 In circumstances where the applicants' lawyers notify class members (who are clients or potential clients of the applicants' lawyers) of any applicable legal costs or litigation funding charges the applicant's lawyers should ensure that the notification is:

(a) in clear terms; and

(b) is provided as soon as practicable.

This is an ongoing obligation and applies to any material changes to the legal costs or litigation funding charges.

5.4 Failure to do so may be taken into account by the Court in relation to settlement approval under s 33V of the Federal Court Act (see paragraph 15.1 below).

5.5 The obligation on the part of the applicant's lawyers to notify class members of any applicable litigation funding charges is satisfied if class members have been provided a document that properly discloses those charges.

5.6 When notifying class members of any applicable legal costs in accordance with paragraph 5.3 above, the applicant's lawyers should bear in mind that there are various categories of legal costs which may arise in class actions. These may include:

(a) common benefit costs, being costs incurred in connection with the common questions in the proceeding or in managing the proceeding for the benefit of the class overall;

(b) sub-group costs, being costs incurred for the common benefit of the sub-group whose claims raise sub-group question(s);

(c) individual costs, being costs incurred in connection with issues which are individual to particular class members (eg. individual damages assessments); and

(d) any "uplift" which the applicant's lawyers intend to charge (where permitted by applicable professional practice rules or regulations).

5.7 The applicant's lawyers should also bear in mind that the recoverability of legal costs in class actions is affected by:

(a) section 43(1A) of the Federal Court Act, which limits the circumstances in which costs orders may be made against class members;

(b) section 33ZJ of the Federal Court Act, which permits orders requiring that any damages awarded to class members be applied to reimburse the representative applicant for legal costs incurred by the applicant but not recovered from the respondent(s); and

(c) sections 33V(2) and 33ZF of the Federal Court Act, which permit orders requiring that settlement payments be applied to reimburse the representative applicant for unrecovered legal costs.

5.8 When notifying class members of legal costs the applicant's lawyers should provide information in relation to the applicable categories of legal costs and the different situations in which class members may be required to meet a share of unrecovered costs.

Conflicts of Interest

5.9 Any costs agreement or litigation funding agreement should include provisions for managing conflicts of interest (including of "duty and interest" and "duty and duty") between any of the applicant(s), the class members, the applicant's lawyers and any litigation funder.

5.10 The applicant's lawyers have a continuing obligation to recognise and properly manage any such conflicts throughout the proceeding.

6. Disclosure of Costs Agreements and Litigation Funding Agreements to the Court and Other Parties

Confidential Disclosure to the Court

6.1 Subject to any objection, prior to the first case management hearing the applicant's lawyers shall, on a confidential basis, email the costs agreement and any litigation funding agreement to the associate of the judge presiding over the first case management hearing with both the email and the agreements clearly marked "Confidential for the Court only (per Class Action Practice Note, paragraph 6.1)".

6.2 The provision of such agreements to the Court may be limited to an example of the standard form of each agreement, and need not include individual variations to the standard forms that might be negotiated with different class members.

6.3 Subject to any objection, the applicant's lawyers shall email to chambers any updated costs agreement and/or litigation funding agreement on the same confidential basis as soon as practicable after the applicant's lawyer become aware that:

(a) there is a change to the standard form of litigation funding agreement or costs agreement which significantly alters the agreement;

(b) a proceeding not previously subject to a litigation funding agreement becomes subject to such an agreement;

(c) there is a change of the litigation funder funding the proceeding; or

(d) the litigation funder becomes insolvent or otherwise unable or unwilling to continue to provide funding for the proceeding.

Disclosure of Litigation Funding Agreements to Other Parties

6.4 Subject to any objection, no later than 7 days prior to the first case management hearing, the applicant's lawyers shall file and serve a notice in accordance with the "Notice of Disclosure - Litigation Funding Agreements" together with a copy of the litigation funding agreement. Such disclosure may:

(a) be limited to an example of the standard form of the agreement, and need not include individual variations to the standard form that might be negotiated with different class members;

(b) be redacted to conceal any information which might reasonably be expected to confer a tactical advantage on another party to the proceeding including, without limitation, information:

(i) as to the budget or estimate of costs for the litigation or the funds available to the applicants, in total or for any step or stage in the proceeding;

(ii) which might reasonably be expected to indicate an assessment of the risks or merits of the proceeding or any claim in, or aspect of, the proceeding.

6.5 Subject to any objection, the applicant's lawyers shall file and serve an updated Notice of Disclosure (with any appropriate redactions), in the event that the lawyer becomes aware of any of the circumstances set out in paragraph 6.3 above.

Objection to Disclosure

6.6 Where a question of legal professional privilege, prejudice or other significant detriment arises in making any disclosure under Part 6 of this practice note, the applicants' lawyers may object in whole or in part to the requirement to make such disclosure or alternatively propose a sensible redaction process.

6.7 Where such an objection is sought to be made, it should be raised with the Court and with other parties, with concise reasons provided, in writing no later than 7 days prior to the first case management hearing. The matter will then be substantively addressed at a hearing.

7. First Case Management Hearing

7.1 The first case management hearing will ordinarily be fixed for a date within 8 weeks from the date on which the application is filed, and the date will be noted on the application. The extended time allowed prior to the first case management hearing reflects the fact that class actions are often large and complex and the matters to be dealt with will require the parties to undertake a significant amount of case preparation.

7.2 If there is any genuine reason why a party may be unable to participate meaningfully in the first case management hearing on the date fixed, that party should liaise with all other parties about that as soon as practicable before that hearing. Where appropriate, the parties may approach the associate of the judge hearing the first case management hearing to propose a later date.

7.3 The parties are encouraged to file a joint position paper in advance of the first case management hearing, listing the major points the parties anticipate raising and outlining their respective positions on these points, with each one summarised in no more than
3 sentences.

7.4 The first case management hearing may, if it is appropriate, be conducted along relatively informal lines. In that event, the emphasis will usually be on an "exchange" between all participants (rather than having only counsel speaking and then only in a fixed sequence). The lawyer with primary responsibility for the proceeding within the applicant's and respondent's law firms must attend.

Matters to be Dealt with at the First Case Management Hearing

7.5 This section should be read together with the Central Practice Note in regard to case management hearings (see Part 8 of the Central Practice Note, including the obligation to communicate with other parties in advance of a case management hearing in paragraph 8.6).

7.6 At the first case management hearing the parties will be asked to outline the issues and facts that appear to be in dispute.

7.7 Unless specific disclosure in accordance with Parts 5 and 6 above has already been made, the question of the disclosure requirements and any issues arising, including any objections, will be substantively addressed.

7.8 In addition, the parties should be in a position to address the following:

(a) any issues regarding the description of class members (see ss 33C(1) and 33H(1) of the Federal Court Act);

(b) a timetable for the delivery of a defence;

(c) any pleading issues;

(d) discovery, including the utility of orders for the provision of affidavits by any party as to where relevant documents are stored, what types of documents exist, in what form they are held, and the likely timetable and costs consequences of making discovery of particular categories of documents;

(e) whether the respondent proposes to seek an order for security for costs;

(f) the timetabling of any interlocutory applications;

(g) the timetabling of a further case management hearing to deal with other issues; and

(h) any of the matters set out in paragraph 8.2 below where the parties are in a position to address such matters at the first case management hearing.

7.9 The Court will fix dates as early as are practicable for the filing, service and return of any interlocutory application, and endeavour to deal with such applications on an expedited basis.

7.10 Any interlocutory application that is not filed and served within the time required must not subsequently be filed without leave of the Court.

7.11 The Court will endeavour to give judgment on any interlocutory application within 6 weeks of the interlocutory hearing.

8. Subsequent Case Management Hearings

8.1 This section should be read together with the Central Practice Note in regard to further interlocutory steps (see Part 12 of the Central Practice Note, including the obligation to communicate with other parties in advance of any interlocutory application in paragraph 12.2 of the Central Practice Note).

8.2 The complexity of class actions means that there may be a need for a number of case management hearings to deal with issues, including the following:

(a) issues put over from the first case management hearing;

(b) discovery;

(c) whether the matter should be referred for alternative dispute resolution ("ADR") and, if so, a timetable within which the ADR process might proceed. Mediation, and information-sharing in that context, is likely to be considered proactively (see Part [9] of this practice note);

(d) the joinder of additional parties;

(e) whether or not sub-groups should be formed or sample class members put forward;

(f) the timing and form of the opt out notice;

(g) methods of communicating with non-client class members;

(h) whether there is utility in the use of sample class members;

(i) the common and other questions for trial;

(j) if appropriate, determining any common question as a preliminary question (r 30.01 of the Federal Court Rules) or giving summary judgment on any common question (s 31A of the Federal Court Act);

(k) whether it is appropriate to refer any one or more of the common questions to a Full Court pursuant to s 20(1A) of the Federal Court Act;

(l) the appropriateness of a split trial. It is usual for the common questions, together with such part of the applicant's case as is appropriate to decide at that stage, to be heard in an initial trial. Consideration should be given to whether the whole of the applicant's case should be heard at the initial trial or whether it is appropriate to hear and determine one or more separate questions at that trial;

(m) the provision of expert reports and production of joint expert reports, conferences of experts and the use of concurrent evidence at trial (see also the Expert Evidence Practice Note (GPN-EXPT));

(n) the possible use of referees (under s 54A of the Federal Court Act); and

(o) the mode of conducting the trial (eg. whether it is to be an eTrial, whether witness statements will be used etc).

9. Mediation and ADR

9.1 The Court expects that the parties will mediate (or utilise other ADR processes) to resolve the claims of the applicant and class members on one or more occasions in the course of the action. Registrars of the Court are experienced in assisting the parties to achieve settlement through mediation.

9.2 There are often obstacles to the settlement of class actions which are not present in other types of litigation. For example, it is often the case that documents material to the issue of liability are not available to the applicant and class members, and the number of class members interested in participating in the class action and the quantum of claims made by them is not known and cannot readily be assessed by the respondent.

9.3 At an early stage in the proceeding the parties should take steps to establish the methods by which relevant information might be gathered and exchanged which, without compromising the utility of the class action procedure, would assist the parties to have settlement discussions which are as informed as possible. The Court will make such directions, including directions in relation to information sharing in a mediation or other ADR process, as it considers appropriate.

9.4 After the close of pleadings the Court will hold a case management hearing for the purpose of investigating steps for the settlement of the claims, including scheduling an appropriate ADR process to assist in achieving the overarching purpose.

10. Communications with Class Members

10.1 Unless leave is granted by the Court, if a class member is a client of the applicant's lawyers then any communication with the class member by the respondent or the respondent's lawyers or agents in relation to the proceeding shall only be through the applicant's lawyers. However, there is no intention to limit the respondent's communication with class members in the ordinary course of business. Where the respondent's lawyers are uncertain as to whether the class member is a client of the applicant they should liaise with the applicant's lawyers to clarify the status of the class member, before any communication takes place. In an appropriate case, the Court may make an order that the applicant's lawyers inform the other parties whether class members are clients of those lawyers.

10.2 The Court may make orders concerning communications with class members who are not clients of the applicant's lawyers, including establishing a protocol for such communications. Where class members are not clients of the applicant's lawyers then the respondent and its lawyers or agents should use reasonable endeavours to ensure that any communications with class members in relation to the proceeding are in writing.

10.3 Where a respondent and/or its lawyers or agents communicate with a non-client class member suggesting that the class member do or not do something, the communication should, in plain language, explain the consequences of following the suggestion and encourage the non-client class member to obtain legal advice.

11. Opt Out Notice

11.1 Class members may opt out of a class action by giving a written opt out notice to the Court by a date which must be fixed for that purpose by the Court (see s 33J of the Federal Court Act). An opt out notice must comply with Form 21 (see r 9.34 of the Federal Court Rules).

11.2 The applicant's lawyers should ensure that the opt out notice:

(a) uses plain language and gives a balanced, succinct description of the claims and defences in the proceeding;

(b) clearly describes the consequences of remaining a class member or alternatively opting out of the proceeding, including a succinct explanation of how a judgment or settlement in the proceeding will or may preclude class members from relying on the same or related claims or defences in other proceedings;

(c) alerts class members to the fact and consequences of any costs agreement or litigation funding agreement made or intended for the proceeding;

(d) is sent, published or broadcast via media which are best calculated to achieve the effective dissemination of the notices among class members in the most cost-effective way.

A sample form of such an opt out notice is available on the Court's website. It may be appropriate in some cases to use a shorter form of notice.

11.3 Where the class members are, or are likely to be, identifiable from a respondent's records (for example, shareholders of a respondent corporation or unitholders in a managed investment scheme) then the parties should, subject to any clear statutory or legal obligations requiring otherwise, cooperate with a view to using the respondent's records as the basis for a direct mail or email distribution of notices, whether by the applicant, by the respondent or by a third party (for example, a commercial mail house).

11.4 An objection to the use of the respondent's records to assist the opt out process in this way must be advised by the respondent to the applicant's lawyer at the earliest practicable opportunity. The parties should engage in a genuine effort to resolve the issue in a practical way before agitating the issue before the Court.

11.5 The Court will approve an appropriate manner of distribution of the notice to be given to class members informing them of the commencement of the class action, and of their right to opt out of the proceeding by the date that the Court has fixed (see ss 33X(1)(a), 33X(2) and 33Y of the Federal Court Act).

11.6 The timing of the opt-out notice to class members is a matter to be dealt with at a case management hearing.

12. Initial trial - Trial of Common Questions

12.1 In an appropriate case (and appropriateness will be determined by practical as well as legal considerations) the trial may be split so that common issues together with non-common issues concerning liability may be determined first. Such a trial may be structured to address:

(a) the issues raised by the claim of the representative applicant(s), namely the common questions as well as the individual issues relating to the representative applicant(s) including any individual claims for damages; and

(b) issues common to sub-groups which also might efficiently be addressed at the initial trial.

12.2 Unless the Court makes orders under ss 33Q or 33R of the Federal Court Act, "sample" class members whose claims are presented at a split trial will retain their status as class members for the purposes of s 43(1A) of the Federal Court Act.

12.3 Following a trial on issues of liability it will be necessary to decide whether the individual claims of class members will be determined within the existing proceeding (eg. under ss 33Q or 33R of the Federal Court Act) or determined in separate proceedings (s 33S of the Federal Court Act).

13. Settlement - Requirement for Court Approval

13.1 A class action may not be settled or discontinued without the approval of the Court (see s 33V(1) of the Federal Court Act). If the Court gives its approval to a settlement, it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court (see s 33V(2) of the Federal Court Act; note also ss 33ZF and 33ZJ).

13.2 The Court will usually not determine an application for approval of a settlement unless a notice, approved by the Court, has been given to the class members (see ss 33X(4) and 33Y of the Federal Court Act).

14. Settlement - Procedure

14.1 An application for the Court's approval of a proposed settlement must be made by interlocutory application. The orders which are commonly made on such an application include orders for:

(a) at the first return of the application:

(i) the confidentiality of evidence to be filed in support of the application for approval;

(ii) the timetable for any person to file evidence in respect of the application for approval; and

(iii) Court approval of a notice to class members of the proposed settlement.

(b) at the second return of the application, Court approval of:

(i) the proposed settlement;

(ii) any scheme for distribution of any settlement payment; and

(iii) arrangements for the reimbursement of any costs incurred by the applicant(s) but not recovered from the respondents.

(c) following the completion of any settlement distribution scheme - disposing of the proceeding (eg. by dismissing the application).

14.2 Notice of the proposed settlement will usually be required to be given to class members. The notice should usually include the following:

(a) a statement that the class members have legal rights that may be affected by the proposed settlement;

(b) a statement that an individual class member may be affected by a decision whether or not to remain as a class member (in the event that the opt-out date has not already passed or where there is a further opportunity to opt out);

(c) a brief description of the factual circumstances giving rise to the litigation;

(d) a description of the legal basis of the claims made in the proceedings and the nature of relief sought;

(e) a description of the class on whose behalf the proceedings were commenced;

(f) information on how a copy of the statement of claim and other legal documents may be obtained;

(g) a summary of the terms of the proposed settlement;

(h) information as to any "funding equalisation payment" which affects the ultimate settlement amount received by class members who have not entered into a litigation funding agreement;

(i) information on how to obtain a copy of the settlement agreement (except where confidentiality provisions in the settlement agreement preclude disclosure at that time);

(j) an explanation of who will benefit from the settlement, including an explanation as to how class members or sub-groups will benefit relative to each other;

(k) where all class members are not eligible for settlement benefits - an explanation of who will not be eligible and the reasons for such ineligibility;

(l) an explanation of the Court settlement approval process;

(m) details of when and where the Court hearing will be and a statement that the class member may attend the Court hearing;

(n) an outline of how objections or expressions of support may be communicated, either in writing or by appearing in person or through a legal representative at the hearing;

(o) an outline of any steps required to be taken by persons who wish to participate in the settlement (in the event that affirmative steps are required);

(p) an outline of the steps required to be taken by persons wishing to opt out of the settlement (if that is possible under the terms of the settlement); and

(q) information on how to obtain legal advice and assistance.

14.3 When applying for Court approval of a settlement, the parties will usually need to persuade the Court that:

(a) the proposed settlement is fair and reasonable having regard to the claims made on behalf of the class members who will be bound by the settlement; and

(b) the proposed settlement has been undertaken in the interests of class members, as well as those of the applicant, and not just in the interests of the applicant and the respondent(s).

14.4 The material filed in support of an application for Court approval of a settlement will usually be required to address at least the following factors:

(a) the complexity and likely duration of the litigation;

(b) the reaction of the class to the settlement;

(c) the stage of the proceedings;

(d) the risks of establishing liability;

(e) the risks of establishing loss or damage;

(f) the risks of maintaining a class action;

(g) the ability of the respondent to withstand a greater judgment;

(h) the range of reasonableness of the settlement in light of the best recovery;

(i) the range of reasonableness of the settlement in light of all the attendant risks of litigation; and

(j) the terms of any advice received from counsel and/or from any independent expert in relation to the issues which arise in the proceeding.

14.5 To the extent relevant, the affidavit or affidavits in support of the application for Court approval should state:

(a) how the settlement complies with the criteria for approving a settlement;

(b) why the proceeding has been settled on particular terms;

(c) the effect of those terms on class members (ie. the quantum of damages they are to receive in exchange for ceasing to pursue their claims and whether class members are treated the same or differently and why);

(d) the means of distributing settlement funds;

(e) the time at which it is anticipated settlement funds will be received by class members;

(f) the frequency of any post-approval report(s) to be provided to the Court regarding the distribution of settlement funds;

(g) the terms of the costs agreement including the reasonableness of legal costs;

(h) the terms of any litigation funding agreement and its application if the settlement is approved;

(i) a response to any arguments against approval of settlement raised by class members; and

(j) any issues that the Court directs be addressed.

14.6 The Court will require to be advised at regular intervals of the performance of the settlement (including any steps in the settlement distribution scheme) and the costs incurred in administering the settlement in order that it may be satisfied that distribution of settlement monies to the applicant and class members occurs as efficiently and expeditiously as practicable.

15. Court Supervision of Deductions for Legal Costs or Litigation Funding Charges

15.1 Where a proposed settlement contemplates that any part of the payments to be made to class members will be applied toward reimbursement of the unrecovered legal costs of the proceeding, or toward payment of litigation funding charges, the Court will usually require that the material filed in support of the application should demonstrate:

(a) that reasonable steps were taken to alert class members to the likelihood of such deductions as soon as practicable after that became apparent, so that class members were, at the relevant time, able to take such steps as may have been practicably available to them to negotiate as to legal costs or as to litigation funding charges as applicable, or to remove themselves from the class action; and

(b) that the amounts to be deducted have been calculated in accordance with the terms of the costs agreement and any litigation funding agreement.

15.2 It will usually be sufficient that an independent expert has examined the relevant files or records of the applicant's lawyer and any litigation funder and that:

(a) in relation to legal costs the expert:

(i) has examined a sufficient sample of the legal work recorded to clarify whether the work was properly costed in accordance with applicable costs agreements; and

(ii) expresses an expert opinion, by reference to the sample and the expert's experience of comparable litigation, as to whether the total legal costs claimed are fair and reasonable; and

(b) in relation to litigation funding charges, the expert has examined the litigation funder's records in order to provide assurance to the Court that the litigation funding charges, as calculated, are appropriate having regard to the terms of the litigation funding agreement.

15.3 Lawyers should expect that a more extensive sampling of legal costs, a greater level of examination by an independent expert, or a more extensive examination of the litigation funder's records may be required where:

(a) the class members include persons who are not clients of the applicant's lawyers or of the litigation funder;

(b) the deduction per class member constitutes a significant proportion of the settlement amount otherwise payable to each class member; or

(c) the litigation funder imposes charges beyond the percentage commission set out in the litigation funding agreement (eg. project management fees).

15.4 Where any application for Court approval of a proposed settlement or settlement distribution scheme involves an evaluation as to whether the legal costs incurred on behalf of the class members are reasonable, the Court may:

(a) have regard to the corresponding legal costs incurred by the respondent to the action; and

(b) make such orders for the confidentiality of the applicant's legal costs or a respondent's legal costs as may be appropriate.

16. Further Practice Information and Resources

16.1 The following key documents are relevant to class actions matters and are available from the Court's website:

(a) Notice of Disclosure - Litigation Funding Agreements;

(b) Sample Opt Out Notice (including sample Form 21 – Opt Out Notice);

(c) Federal Court Form 21, Opt Out Notice.

16.2 Practitioners should also familiarise themselves with the General Practice Notes of the Court. The following practice notes can be of particular relevance to class actions: Expert Evidence Practice Note (GPN-EXPT), Survey Evidence Practice Note (GPN-SURV) and Subpoenas and Notices to Produce Practice Note (GPN-SUBP). These general practice notes and all of the Court's practice notes are available on the court's website.

16.3 Further information to assist litigants, including a range of helpful guides, is also available on the Court’s website. This information may be particularly helpful for litigants who are representing themselves.

16.4 In addition, further practice and procedure information and resources can be found on the Court's class actions webpage.

 

J L B ALLSOP
Chief Justice
25 October 2016