Bounce-back in class action filings
The headline trend is that class action filings in 2023 bounced back to reflect longer-term trends after a marked downturn in 2022.
Filings in 2023 were in a similar ballpark to filing levels over the last five years (save for the anomaly of 2022). For that reason, we do not view this as an escalation in class action risk and, as discussed further below, it may not necessarily mean abandoning any hope that class action risk might be subsiding.
A core factor in the 2023 filings is the relatively high number of competing class actions (ie multiple claims against the same defendant in respect of the same or similar issues). Our analysis indicates that competing claims account for roughly one-quarter of total filings—the largest proportion in at least the last decade. While competing claims have typically been seen in the shareholder class action context, in 2023 the competing claims were comprised of roughly one-third shareholder claims, one-third consumer claims and the balance being made up with various other types of claims.
Consumer and shareholder claims dominate a smaller pool
In a continuation of trends seen in recent years, consumer and shareholder claims accounted for roughly 60% of claims filed in 2023. Within that trend, consumer claims returned to the fore, accounting for almost 40% of claims filed, while shareholder claims accounted for roughly 20%.
The biggest driver of consumer claims in 2023 was alleged defects in motor vehicles. The other notable trend was the first class actions in relation to high-profile data breaches (against Medibank and Optus). We discuss both of these trends later in this report.
The subject of other consumer claims included travel experiences, building defects, superannuation fees, inflated prices and general products claims.
Shareholder class action filings have remained fairly steady for a number of years now, with between 10-12 claims having been filed in each of the last five years. As in previous years, a large percentage of the claims in 2023 were competing claims—indeed, three of the shareholder class actions filed in 2023 were the fourth claim filed against a defendant for the same or similar conduct.
The other notable contributors to 2023 filings were:
- employee claims for underpayments and rest breaks—a continuation of a growing trend in recent years; and
- public interest claims, including in respect of the 'stolen generation', racial discrimination and the treatment of women and young people in custody.
A broad range of sectors targeted
Another trend that has remained fairly stable for a number of years is that class action filings have been spread across a broad range of sectors—with no obvious focus on particular sectors since the decline in focus on the banking and financial services sector after about 2020.
In 2023, the biggest target was the retail, hospitality and leisure sector (being the subject of about one-quarter of claims filed). The most obvious trend driving this outcome is the number of class actions brought on behalf of retail employees for alleged underpayment and/or rest break issues. Beyond that trend, the claims in this sector are varied—including in respect of product complaints, shareholder claims, traveller experiences and claims against the AFL for racial discrimination and concussion-related injuries.
After a brief reprieve in recent years, the banking and financial services sector was the second biggest target for class action filings in 2023. However, for the second year in a row there were no class actions filed against the major banks in 2023 (although one case was filed against a subsidiary on behalf of superannuation members). The claims in this sector covered a range of circumstances, including superannuation, conduct in selling complex financial products (a return to the type of claim commonly seen in the wake of the global financial crisis), shareholder class actions and data breach.
The third biggest target was the industrials sector, primarily driven by the ongoing trend of claims against auto manufacturers.
Also of note is:
- the trailing off of claims against the government sector—which was the biggest target in both 2021 and 2022, largely driven by a broad range of public interest claims; and
- the relatively small number of claims in the technology, telecommunications and media sector—a sector we expect to become a target given the increasing focus on data/privacy issues, and also because many businesses in this sector are mass consumer-facing.
Preferred jurisdictions: Federal Court and Supreme Court of Victoria
The Federal Court continues to attract the majority of class action filings—roughly two-thirds in 2023, which is broadly in line with overall trends in recent years.
There has, however, continued to be an increase in the claims filed in the Supreme Court of Victoria—which accounted for all but one of the other class actions filed in 2023, cementing Victoria as the clear second jurisdiction of choice for class action filings. While there may be other factors at play, one obvious reason for this trend is the availability of contingency fees in class actions in that court.
The remaining claim in 2023 was filed in the Supreme Court of NSW—a new low for this jurisdiction which, up until 2020 when contingency fees became available for class actions in the Supreme Court of Victoria, had received between roughly 20-30% of class action filings.
The other notable contributors to 2023 filings were:
- employee claims for underpayments and rest breaks—a continuation of a growing trend in recent years; and
- public interest claims, including in respect of the 'stolen generation', racial discrimination and the treatment of women and young people in custody.