Practice Note CM 17
This Practice Note is REVOKED
On 25 October 2016, as part of the National Court Framework reforms, all existing practice documents were revoked and new national practice notes were issued, effective immediately.
To assist Court users to understand these practice note changes, the Court has prepared:
Representative proceedings commenced under Part IVA of the Federal Court of Australia Act 1976 (Cth)
Practice Note CM 17 issued on 1 August 2011 is revoked with effect from midnight on 9 October 2013 and the following Practice Note is substituted.
1.1 This Practice Note was issued on 9 October 2013 in replacement for Practice Note CM 17 issued on 1 August 2013. Both Practice Notes are identical in content however this Practice Note attaches a revised version of Form 21, Opt out notice, approved on 9 October 2013. That revised version of Form 21 differs from its predecessor in that it contains an address to which the completed form must be sent. For convenience “Practice Note”, when used below, refers to both this Practice Note and its predecessor.
1.2 This Practice Note applies to new and, so far as the circumstances permit, existing representative proceedings. The Practice Note supplements Part IVA of the Federal Court of Australia Act 1976 (Cth) and Division 9.3 of the Federal Court Rules 2011. Words and expressions in this Practice Notes that are defined in Part IVA and Rule 9.31 have the meanings given to them in that Part and Rule.
1.3 The aim of this Practice Note is to:
(a) address some of the practical issues which frequently arise in representative proceedings, and to indicate the Court’s expectations regarding the management of those issues; and
(b) facilitate the efficient and expeditious conduct of representative proceedings, in particular by ensuring that the issues that are in contest are exposed at an early date and that representative proceedings are not unnecessarily delayed by interlocutory disputes.
1.4 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.
2.1 A representative proceeding is to be started by filing an originating application in accordance with Form 19. The originating application, statement of claim or affidavit filed in support of the application must, in accordance with s 33H of the Act, (a) describe or otherwise identify the group 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 group members, and (c) specify the common questions of law or fact which are said to arise in the action.
2.2 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 resolve all common questions together with any non-common questions raised by the applicant’s personal claim (eg the applicant’s individual claim for damages).
3. Case Management
3.1 An initial case management conference will be fixed by the registry for a date within six weeks from the date on which the application is filed. The date will be stated on the application.
3.2 The initial case management conference will take place before a Judge.
3.3 The case management conference may be held in a conference room and will, insofar as it is appropriate, be conducted along relatively informal lines. The emphasis will usually be on an “exchange” 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. The proceedings at the case management conference will usually be recorded, whether held in a conference room or in court, and a transcript is to be taken and to be available.
3.4 At the initial case management conference the parties will be asked to outline the issues and facts that appear to be in dispute. Usually, the parties will also be asked to indicate whether the matter should be referred for alternative dispute resolution and, if so, a timetable within which the alternative dispute resolution might proceed.
3.5 In addition, the parties should be in a position to address the following:
(a) any issues regarding the description of group members (see ss 33C(1) and 33H(1));
(b) any pleading issues;
(c) the timing and form of the opt out notice;
(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 (from high level down to particular), in what form they are held, and as to the costs of making discovery of particular categories of documents;
(e) evidence, including the utility of requiring that affidavits of lay or expert witnesses be filed at an early stage of the proceeding to enable a better understanding of the issues in dispute and the proper identification of individual and common questions;
(f) the joinder of additional parties;
(g) to the extent possible, the appropriateness of a split trial and the issues to be determined at a split trial;
(h) whether the respondent proposes to seek an order for security for costs; and
(i) the timetabling of any interlocutory applications.
3.6 At or prior to the initial case management conference each party will be expected to disclose 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. Any funding agreement disclosed may be redacted to conceal information which might reasonably be expected to confer a tactical advantage on the other party.
3.7 During the progress of the proceeding the Court may direct that there be further case management conferences.
4. Conferring by lawyers
4.1 Before making any application for an interlocutory order which is in dispute the parties’ lawyers must confer and attempt in good faith to resolve the dispute. If the parties are unable to resolve the dispute, any application must be accompanied by an affidavit of the applicant’s lawyer that the ‘meet and confer’ requirement was completed, though unsuccessful. Failure to file an affidavit in those terms may result in the application being immediately refused.
5. Interlocutory Applications
5.1 The Court will fix dates as early as are practicable for the filing, service and return of any interlocutory application:
- challenging the commencement of the proceeding as a representative proceeding (see ss 33C(1) and 33H);
- seeking an order under s 33M or s 33N, or otherwise modifying or removing the representative character of the action;
- seeking summary dismissal under s 31A or Rule 26.01 of the Federal Court Rules 2011;
- seeking a striking out under Rule 16.21 of the Federal Court Rules 2011;
- seeking an order that the applicant provide security for costs;
- seeking an order under s 33ZF; or
- seeking an order for discovery.
5.2 Any interlocutory application that is not filed and served within the time required must not subsequently be filed without leave of the Court.
5.3 The Court will endeavour to give judgment on any interlocutory application within 6 weeks of the hearing.
6. Communications with group members
6.1 The applicant’s lawyers should inform the other parties whether group members are its clients. Where group members are not clients of the applicant’s lawyer (ie where no notice of acting has been given) then all other parties should use reasonable endeavours to ensure that any communications with group members are in writing.
6.2 Where a party communicates with a non-client group member suggesting that the group member do or not do something, the communication should explain the consequences of following the suggestion and encourage the non-client group member to obtain legal advice.
6.3 The Court may make orders establishing a protocol for communications between parties and non-client group members.
Opt Out Notice
7.1 Group members may opt out of a representative proceeding 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. An opt out notice must comply with Form 21 – see Rule 9.34.
7.2 The Court will approve the manner of distribution of the notice to be given to group members informing them of the commencement of the representative proceeding, 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.
7.3 The usual practice is to send opt-out notices to group members shortly after the close of pleadings.
8. Preliminary Questions and Summary Judgment
8.1 To narrow the scope of the dispute, at the earliest practicable date the Court may consider the utility of either:
(a) determining any common question in the proceeding as a preliminary question: see Rule 30.01 Federal Court Rules; or
(b) giving summary judgment on any common question in the proceeding: see s 31A./p>
9. Trial of common questions
9.1 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.
9.2 In framing the issues to go to trial the parties’ lawyers should consider whether there are issues common to subgroups which also might efficiently be addressed at the initial trial. Unless the Court makes orders under s 33Q or s 33R, group members whose claims are presented at a split trial will retain their status as group members for the purposes of s 43(1A).
9.3 Following a trial on issues of liability it will be necessary to decide whether the individual claims of group members will be determined within the existing proceeding (eg under s 33Q or s 33R) or determined in separate proceedings (s 33S).
10.1 A representative proceeding may not be settled or discontinued without the approval of the Court: s 33V(1). 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: s 33V(2).
10.2 The Court will not determine an application for approval of a settlement unless a notice, approved by the Court, has been given to the group members: see ss 33X(4), 33Y.
11. Court approval of settlement
11.1 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 group members who will be bound by the settlement; and
(b) the proposed settlement has been undertaken in the interests of group members, as well as those of the applicant, and not just in the interests of the applicant and the respondent/s.
11.2 When applying for Court approval of a settlement the parties 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 group 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 representative proceeding;
(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.
11.3 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:
(a) for the confidentiality of evidence
(b) for notice to group members of the proposed settlement;
(c) approving any scheme for distribution any settlement payment; and
(d) disposing of the proceeding (eg. by dismissing the application).
11.4 To the extent relevant, the affidavit or affidavits in support should state:
(a) how the settlement complies with the criteria for approving a settlement;
(b) why the proceedings have been settled on particular terms;
(c) the effect of those terms on group members (ie the quantum of damages they are to receive in exchange for ceasing to pursue their claims and whether group members are treated the same or differently and why);
(d) the means of distributing settlement funds;
(e) the terms of fee and retainer agreements including the reasonableness of legal costs;
(f) a response to any arguments against approval of settlement raised by group members;
(g) any issues that the Court directs be addressed;
(h) a hearing of the application for settlement approval, including consideration of any group members’ objections to the settlement and an order dealing with costs.
11.5 When it is appropriate that notice of the proposed settlement be given to group members, the notice should usually include the following:
(a) a statement that the group members have legal rights that may be affected by the proposed settlement;
(b) a statement that an individual group member may be affected by a decision whether or not to remain as a group member (where 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 group 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 on how to obtain a copy of the settlement agreement;
(i) an explanation of who will benefit from the settlement;
(j) where all group members are not eligible for settlement benefits - an explanation of who will not be eligible and the reasons for such ineligibility;
(k) an explanation of the Court settlement approval process;
(l) details of when and where the Court hearing will be and a statement that the group member may attend the Court hearing;
(m) 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;
(n) 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);
(o) 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
(p) information on how to obtain legal advice and assistance.
J L B ALLSOP
9 October 2013
Schedule A – Sample Opt Out Notice
FEDERAL COURT OF AUSTRALIA
[Generic name of] CLASS ACTION
1. Why is this notice important?
A class action has been commenced in the Federal Court of Australia by [insert Applicant’s name here] against [insert respondent’s name here]. The action arises out of [insert simple summary of the origin and general nature of the claim].
The Federal Court has ordered that this notice be published for the information of persons who might be members of the class on whose behalf the action is brought and may be affected by the action. You have been identified as a potential class member [delete where appropriate]. You should read this notice carefully. Any questions you have concerning the matters contained in this notice should not be directed to the court. If there is anything in it that you do not understand, you should seek legal advice.
2. What is a class action?
A class action is an action that is brought by one person (“the Applicant”) on his or her own behalf and on behalf of a group of people (“class members”) against another person (“the Respondent”) where the Applicant and the class members have similar claims against the Respondent.
Class members in a class action are not individually responsible for the legal costs associated with bringing the class action. In a class action, only the Applicant is responsible for the costs.
Class members are bound by any judgment or settlement entered into in the class action unless they have opted out of the proceeding. This means that:
(a) if the class action is successful, class members may be eligible for a share of any settlement monies or Court-awarded damages;
(b) if the class action is unsuccessful, class members are bound by that result; and
(c) regardless of the outcome of the class action, class members will not be able to pursue their claims against the Respondent in separate legal proceedings unless they have opted out.
3. What is Opt Out?
The Applicant in a class action does not need to seek the consent of class members to commence a class action on their behalf or to identify a specific class member. However, class members can cease to be class members by opting out of the class action. An explanation of how class members are able to opt out is found below in the section headed “How can you opt out of the proceeding”.
4. What is this class action?
This class action, the [insert generic name of class action] class action is brought by [insert name of representative party, ie, the Applicant] (“the Applicant”) on [his, her or its] own behalf and on behalf of all persons who are “class members” as defined in the proceeding.
The Applicant alleges in the statement of claim in Federal Court proceeding [title and number of proceeding] that from [date to date] [insert summary of the claim].
The respondent/s to the class action is/are [insert name of respondent/s]. The respondent/s does/do not admit the allegations and are defending the class action [if this is the case]. The respondents have claimed contribution from each other in the event that the respondent claiming contribution is found liable. [if this is the case]
5. Are you a class member?
You are a class member if [insert identifying factors].
If you are unsure whether or not you are a class member, you should contact [Applicant’s lawyers] on [telephone number] or email [email address] or seek your own legal advice without delay.
6. Will you be liable for legal costs?
You will not become liable for any legal costs simply by remaining as a class member for the determination of the common questions. However:
(a) if the preparation or finalisation of your personal claim requires work to be done in relation to issues that are specific to your claim, you can engage [Applicant’s lawyers] or other lawyers to do that work for you. A copy of the terms on which [Applicant’s lawyers] are acting in the class action may be obtained from them on the number/s shown below;
(b) if any compensation becomes payable to you as a result of any order, judgment or settlement in the class action, the Court may make an order that some of that compensation be used to help pay a share of the costs which are incurred by the Applicant in running the class action but which are not able to be recovered from the respondents; and
(c) class actions are often settled out of court. If this occurs in the class action, you may be able to claim from the settlement amount without retaining a lawyer.
7. What will happen if you choose to remain a class member?
Unless you opt out, you will be bound by the outcome of the class action. If the class action is successful, you will be entitled to share in the benefit of any order, judgment or settlement in favour of the Applicant and group members. (In some cases you may have to satisfy certain conditions before your entitlement arises.) If the action is unsuccessful or is not as successful as you might have wished, you will not be able to sue on the same claim in any other proceedings.
8. How can you remain a class member?
If you wish to remain a class member there is nothing you need to do at the present time. The Applicant will continue to bring the proceeding on your behalf up to the point where the Court determines those questions that are common to the claims of the Applicant and the class members. However, you are invited to contact the Applicant’s lawyers, [Applicant’s lawyers], on the number below and register as a group member so that future notices about the class action can be sent to your preferred address.
9. How can you opt out of the class action?
If you do not wish to remain a group member you must opt out of the class action. If you opt out you will not be bound by or entitled to share in the benefit of any order, judgment or settlement in the class action, but you will be at liberty to bring your own claim against the respondent/s, provided that you issue Court proceedings within the time limit applicable to your claim. If you wish to bring your own claim against the respondent/s, you should seek your own legal advice about your claim and the applicable time limit prior to opting out.
If you wish to opt out of the class action you must do so by completing a “Notice of opting out by class member” in the form shown below (Form 21 of the Court’s approved forms), then returning it to the Registrar of the Federal Court of Australia at the address on the form. IMPORTANT: the Notice must reach the Registrar by no later than [time and date], otherwise it will not be effective.
You should submit the Notice of opting out by class member if:
(a) you qualify as a class member and you wish to opt out of the class action; or
(b) you believe that you have been incorrectly identified as a class member, because you do not meet the criteria set out in the section headed “Are you a class member” above.
Each class member should fill out a separate form. If you are opting out on behalf of a company or business please provide your name, the name of the company or business and your position within the company or business (e.g. director or partner).
10. Where can you obtain copies of relevant documents?
Copies of relevant documents, including the application, the statement of claim, and the defence or defences, may be obtained by:
(a) downloading them from [Applicant’s lawyers’ website];
(b) inspecting them between 9am and 5pm at one of the offices of [Applicant’s lawyers], contact details for which are available from [Applicant’s lawyers’ website] or by calling [telephone number];
(c) inspecting them on the Federal Court website: www.fedcourt.gov.au or by visiting a District Registry of the Federal Court in Sydney, Canberra, Melbourne, Brisbane, Adelaide, Perth, Hobart or Darwin: the addresses for these registries are available at www.fedcourt.gov.au or by calling the [State or Territory] District Registry on [telephone number].
Please consider the above matters carefully. If there is anything of which you are unsure, you should contact [Applicant’s lawyers] on [telephone number] or email [email address] or seek your own legal advice. You should not delay in making your decision.
Opt out notice
No. of 20
Federal Court of Australia
District Registry: [State]
[Name of First Applicant] [if 2 or more add "and another" or "and others"]
[Name of First Respondent] [if 2 or more add "and another" or "and others"]
To: The Registrar
Federal Court of Australia
[State] District Registry
[Name of group member], a group member in this representative proceeding, gives notice under section 33J of the Federal Court of Australia Act 1976, that [Name of group member] is opting out of the representative proceeding.
Date: [eg 19 June 20..]
Signed by [Name]
[Insert capacity eg group member / Lawyer for the group member]
Filed on behalf of (name & role of party):
Prepared by (name of person/lawyer):
Law firm (if applicable)
Address for service
(include state and postcode)
[Version 2 form approved 9/10/13