Class action filings rebound
With the number of class action filings at their second highest of all time, it's important to be familiar with where the risk lies.
The sectors at risk are expanding, competing claims are on the rise and new areas of risk are coming to the fore. When these developments are coupled with a largely unregulated and highly competitive funding environment, there is added complexity and risk associated with navigating a claim.
This year's edition of Class Action Risk provides an update on the current indicators and drivers of class action risk, with a particular focus on how that risk evolved during 2023.
Key trends
Filings rebound
The number of class action filings in 2023 is the second highest on record, marking a return to the trend of elevated filings seen over recent record-setting years.
A flourishing class action funding environment
The light touch approach to regulation of litigation funders and a magnet-like attraction to the contingency fee regime in Victoria is fuelling a range of increasingly innovative funding models and a high degree of competition in financing claims.
Consumer claims dominate
Consumer claims were a standout once again in 2023, accounting for roughly 40% of class action filings. The biggest drivers of these claims involved proceedings alleging defects in motor vehicles and the sale and promotion of allegedly high-risk or unsuitable financial products.
Cyber claims are here to stay
During 2023, the first significant wave of data breach class actions were filed following several high-profile cybersecurity incidents. With some reform in the works that will make these claims easier to pursue, all signs point to a potential escalation in these claims moving forward.
Employment claims double
In 2023, the number of employment class action filings almost doubled. Most of these claims involved allegations of underpayments and breach of employment terms – in particular in connection with unpaid overtime and loadings, or failure to provide rest breaks. We expect filings to increase with misclassification claims coming back to the fore.
Shareholder claims remain significant
Shareholder class actions continue to account for a significant proportion of filings, with the subject matter that is driving these claims continuing to expand.
ESG to keep pace with overseas growth
The continued regulatory focus on greenwashing and bluewashing, and the proposed introduction of mandatory climate and modern slavery reporting requirements, are likely to serve as the catalyst for future class action risk.
Crypto claims on the horizon
Potential class actions involving digital asset platforms loom large on the horizon as an emerging area of risk.