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Class actions are on the rise in Australia, with cases against large corporations continually in the media. These may be in the form of shareholder class actions, such as the most recent allegations against Commonwealth Bank of Australia; or product liability class actions as seen in recent allegations against Johnson & Johnson.
With plaintiffs often seeking compensation, class action cases benefit the large mass of people by addressing and resolving only one case- rather than multiple. As a crucial litigation matter, it is important to be aware of the fundamentals of class action cases.
What is a class action?
According to the Merriam-Webster dictionary, a class action is “a legal action undertaken by one or more plaintiffs on behalf of themselves and all other persons having an identical interest in the alleged wrong.”
A class action is a civil lawsuit and is often brought forward by groups of people sharing a common pursuit such as shareholders, employees, or customers. One person or entity acts on behalf of the mass, and is classified as the class representative.
What are the requirements of a class action?
Administered by the Federal Court of Australia Act 1976 (Cth), in order for a class action to proceed, there must be:
- Seven or more people who are claiming against the same person/entity
- Commonality through similar or related circumstances for each claim
- The same wrongdoing or misfortune by way of the defendant
- Adequately represented by one or more person acting on behalf of others (usually a law firm)
- Proper standing by each representative as a “class member” entitled to a uniform outcome
What are the advantages of class actions?
Misconduct by a company or individual can in some cases impose the same negative experience on many people. The most common advantages include:
Litigation on one case with the same circumstance, rather than multiple cases is certainly more effective. In this instance, there is one lawsuit leading to settlement or trial, as opposed to multiple counts of the same situation
With the class members receiving the same outcome, the recoveries are consistent. A different litigation lawyer, different judge and different proceeding measures such as evidence, may vary the decision and therefore the outcome
Lower litigation expenses
The cost of the class action is divided amongst the class members. This means the expense of the case is shared and therefore lower than if each individual were to pursue a litigation case on their own
Greater opportunities for plaintiffs
By seeking compensation or a just outcome, the plaintiff can be subject to greater opportunities. This for instance can be in the form of the payment that they would not have received if the case was not brought to light.
If yourself or a group has experienced a problem with a product or service, or are affected by an issue that may be unlawful such as in the workplace, it is important to consult a litigation lawyer. If you feel you have a case, write to us at firstname.lastname@example.org
The comments in the article are general and should not be relied upon as a substitute for professional advice. Anyone intending to apply the information contained in this newsletter should seek their own professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. This article is issued as a helpful guide to clients and for their private information. Therefore, it should be regarded as confidential and not be made available to any person without our prior approval.
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