Okay, here’s a breakdown of the key facts from the provided text, focusing on the implications for New Zealand class action law. I’ll organize it into sections for clarity:
1. Soft Class Closure Orders (Australia & Implications for NZ)
* What they are: In Australia, “soft” class closure orders allow defendants to request that class members actively register to be included in a settlement. While the system is generally “opt-out” (you’re automatically included unless you choose to leave), these orders create a practical need to “opt-in” to receive settlement funds. They don’t affect participation in proceeds if the case goes to judgment.
* Australian High Court ruling: the Australian High Court confirmed that courts can issue notices signaling the intention to seek soft closure orders. This doesn’t change the opt-out nature of the system,but it encourages registration for settlement purposes.The court still has discretion over whether to ultimately make the order.
* Impact/Strategic Affect: Soft closure orders blur the line between opt-out and opt-in. They may incentivize defendants to settle early, as the potential payout is tied to the number of registered class members.
* Relevance to new Zealand: New Zealand courts haven’t addressed this issue yet, but it’s expected to arise. The decision highlights a risk for class members – they might need to proactively participate even in opt-out cases to benefit from a settlement.
2. Common Fund Orders (CFOs) – Australia & Implications for NZ
* What they are: CFOs require all class members (who haven’t opted out) to contribute to the litigation funder’s commission, a percentage of any settlement or judgment.
* Australian High Court Ruling: The Australian High Court confirmed the Federal Court’s power to make CFOs.Though, they ruled that CFOs are not permissible when the litigation funder is a law practice (a “solicitors’ CFO”). this is as it would violate rules against law firms basing fees on the amount of recovery.
* Key Principle: cfos must be “just” under the relevant legislation. Solicitors’ CFOs were deemed not just.
* Relevance to New zealand:
* New Zealand’s High Court recently (July 2024, Court of Appeal) confirmed it’s ability to grant CFOs.
* The question remains whether New Zealand lawyers can fund class actions conditionally and whether courts will follow Australia’s lead on prohibiting solicitors’ CFOs.
* New Zealand has similar restrictions on conditional fee arrangements, suggesting courts might be inclined to adopt the same approach as Australia.
in essence, the article highlights two key developments in Australian class action law that are likely to be relevant to New Zealand:
- The potential for “soft” opt-out procedures that require active participation from class members to receive settlement benefits.
- The permissibility of CFOs (with limitations regarding law firm funding),which impacts how litigation is funded and the costs borne by class members.
Let me know if you’d like me to elaborate on any specific aspect or if you have further questions.
