Crypto
While we have seen only one crypto-based class action in Australia (which is still making its way through the courts), claims involving digital asset platforms loom large on the horizon as an emerging area of risk. At present, the position of most digital asset platforms is that cryptocurrency is a not a financial product and that issuers do not provide a financial service. However, with a proposed regulatory framework for digital asset platforms in the pipeline and ASIC challenging the positions of crypto issuers in the courts, it may be only a matter of time until there are developments in the legal landscape that provide ammunition to plaintiff law firms assessing the viability of these claims.
ESG
In line with our last Class Action Risk Report, the scope of ESG matters featuring in class actions continues to widen as more novel forms of class actions are filed that seek to bring about changes in the law or conduct, or to hold businesses and government to account (including the claims against the AFL for racial discrimination and concussion-related injuries). We expect the trend of ever-expanding ESG class actions to keep pace with developments abroad.
In Australia, we are seeing continued regulatory focus on greenwashing and bluewashing, and we expect to see increased enforcement activity across a broader range of ESG matters—including sanctions and anti-bribery compliance. Legislative reforms in those areas, as well as the proposed introduction of mandatory climate reporting and increased modern slavery reporting and due diligence requirements, will also fuel class action risk. Australian corporations should remain vigilant of the class action risks that might follow any regulatory prosecutions or shareholder activism in this space.