High Court decision casts pall of uncertainty over class action lawsuits in Australia

Australia’s ABC news reports..

The High Court decision cast uncertainty over the use of common fund orders, which are a mechanism for lawyers and litigation funders to be paid their fees for a class action.

It may sound like an irrelevant legal technicality but these orders have a big impact on whether a litigation funder, which bears the upfront costs, decides to invest in a particular class action or not.

These orders give lawyers and litigation funders the confidence at the beginning of the legal process that they can take their fees from the total settlement from a class action, regardless of whether claimants have signed a funding agreement with them.

As a result, there was previously little pressure to sign up big numbers of people to class actions to ensure they proceeded.

But now, there is some uncertainty around this particular PFAS class action, which has been billed as Australia’s biggest ever, involving eight sites across Australia.

Shine’s plan to file the class action by last Christmas was derailed by the High Court’s decision and Shine now needs to reassure its litigation funder LCM — which bears the upfront costs of the legal action — the action is financially viable.

It is a setback for the firm, which made a high-profile announcement, using the star power of environmental campaigner Erin Brockovich, that this class action was going ahead just three months ago.

Shine is trying to get as many people as possible to sign two agreements, one appointing Shine Lawyers as its legal representative and the other committing them to paying a percentage of any successful settlement to the litigation funder.

Shine’s head of class actions Jan Saddler said the High Court decision had led to the company returning to the practice of building some class actions through a mixture of grassroots campaigning and community gatherings, like in Bullsbrook.

“The High Court decision does not impact the merit of this PFAS class action and we will continue to fight for compensation on behalf of residents whose property prices have plummeted as a result of environmental contamination,” she said.

Shine can count Mr Butland and his fellow Bullsbrook residents Gary and Karen Breadsell as successes after they signed up on Friday.

Read full article . https://www.abc.net.au/news/2020-01-11/class-action-lawsuit-changes-and-what-they-mean-for-consumers/11858928