Updated: Nov 15, 2021
Class actions are a prominent if not a permanent feature of the litigious landscape in Australia.
But what happens when conduct, illegal or otherwise, triggers multiple class actions?
The preferred course is that only one of those actions proceed to hearing but how does the Court choose which one? Should it be the first case to be filed or should some other criteria be applied? How does it manage the expectations of the different parties, their lawyers and their funders?
A case raising those very issues came before the High Court of Australia recently. A majority has outlined the approach for resolving these issues.
Admissions to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by the executives of the first respondent (AMP) that it had deliberately charged some of its clients fees for no service and misled the Australian Securities and Investments Commission about this conduct, unsurprisingly, triggered a sharp fall in AMP’s share price and a myriad of class actions.
Over a short timespan some proceedings were commenced in the Supreme Court of New South Wales while others were commenced in the Federal Court of Australia from where they were transferred to Supreme Court.
Grouped together this way, they jostled to be chosen as the proceedings which the Supreme Court would take to hearing at the expense of the others. AMP did not want to meet more than one claim but, beyond that, was largely indifferent.
Ms Wigmans was the first to bring her proceedings and brought them in the Supreme Court of New Wales. She was surprised when the trial judge, taking into account a number of factors, did not choose her proceedings to take to hearing. And more surprised when five judges of the New South Wales Court of Appeal dismissed her appeal.
Ms Wigmans appealed to the High Court of Australia.
What Role Should the Court Play?
As Bell P succinctly said in the New South Wales Court of Appeal: -
'the application for leave to appeal in the present case involves litigation about who is to litigate in the context of multiple open class actions brought against AMP Ltd following testimony given in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on 16 and 17 April 2018 by executives of AMP.'
But should a court make that decision? Should it simply leave it to the first party to commence proceedings or should it play a more determinative role drawing on a wider set of criteria than just ‘first in best dressed’?
The minority of the High Court were concerned about the sponsorship of the proceedings and uncomfortable about courts engaging in debates about which sponsors were best placed to take the proceedings forward. The minority believed that the debate should be limited to the plaintiffs and defendants. That was the limit of a court’s powers.
‘Where the plaintiffs do not make the election, the court will stay the proceedings brought later in time unless they offer some legitimate juridical advantage for the plaintiffs or the defendants over the proceedings brought earlier in time. The point is that these principles are concerned with the doing of justice between plaintiffs and defendants; they are not concerned to determine the competing claims of financiers and lawyers to sponsorship of the proceedings on behalf of those on the plaintiffs' side of the record. Legislative direction is required to enlist the courts to determine matters of that kind. The courts may mould their established procedures to do justice between the parties to litigation, but the court must proceed by reference to settled principles and bearing in mind that the parties cannot invest a court with a jurisdiction it does not have.’
The majority of the High Court remained unconvinced finding nothing in the language of the relevant provisions which empowered the Supreme Court to manage its own affairs, that prevented it from determining which was the preferred set of proceedings to take forward even if those proceedings were not the first to be filed.
'There is, however, nothing in s 67, read with Pt 6, that supports Ms Wigmans' contention that the considerations to which a court might have regard in exercising the power in s 67 are to be confined, or that the statutorily identified considerations (both mandatory and discretionary) applying to the exercise of the power are to be displaced, by reference to a first-in-time rule or presumption. '
How does the Court choose?
So, if, as the majority of the High Court says, a court can determine which set of proceedings should be taken forward, how does it make that determination.
Under an overarching sentiment that multiple proceedings arising out of common facts is a matter to be discouraged, the majority put forward several considerations for a court to take into account when confronted with the type of problems presented in this case. Those considerations included: -
the order of filing where its significance increases the greater the time between the filings;
the parties’ proactivity;
the discretions built into the court’s existing statutory powers; and
each class action group’s best interests.
The specific considerations will vary from one case to the next.
In this matter the majority were satisfied with the considerations which the trial judge had applied. They dismissed Ms Wigmans’ appeal.
When confronted with multiple class actions arising out a set of common facts, courts can determine which class action should proceed and, in making that determination rely upon a wide variety of factors which some of which may prove to be more decisive in one case but not the next.
None of this makes things easier for insurers whose insured may find themselves embroiled in this type of litigation.
The name of the case Wigmans v AMP Limited  HCA 7 (10 March 2021)