Key areas of focus

A softer year

Overall, 2025 was a distinctly softer year for consumer class actions, which have fallen off their pedestal as the predominant type of class action filing across recent years.

Consumer claims made up around 20% of total class action filings last year (or around 30% if the 19 mirroring 'junior doctor' class actions in Victoria are consolidated in the data set). This compares to about 43% of total claims in 2024 and is a decline in raw terms from 22 to 11 filings (a 50% drop year-on-year).

The subject matter of consumer claims remains relatively diverse and wide-ranging in nature, indicating a flexible approach by class action promoters in taking advantage of what opportunities present themselves. By way of a few observations on the filings, and potential consumer class action risks over the year ahead:

• There continues to be a steady flow of new automotive class actions, with three filed against automakers last year for alleged breaches of the Australian Consumer Law and—in particular—the frequently-invoked 'acceptable quality' guarantee. This is generally consistent with the filing levels seen in 2024 and perhaps comes as something of a surprise to those predicting a flurry of additional car-related claims in the wake of the High Court's decisions in the Ford v Capic and Toyota v Williams
• Throughout 2026, we expect various nuances in relation to the assessment of damages under the Australian Consumer Law to continue to be worked through before the courts. 2025 saw a surprising absence of conventional product liability class actions (eg those concerning defective pharmaceutical products or medical devices), which have been a mainstay in previous years. It is possible this downturn is just a temporary blip, with the prevalence of these claims in the US an indicator that numbers may return in the coming year.
• As in 2024, a large proportion of the consumer claims in 2025 were brought against retailers and financial services providers in relation to allegedly deceptive pricing practices, illusory discounts, misleading conduct, 'junk' or unsuitable insurance products, or similar. We expect this focus to continue, in line with regulatory priorities on cost-of-living pressures and a return to rising interest rates.

A final notable trend is the prevalence of class actions seeking to 'piggy back' on either previous class actions (eg the previous Toyota DPF class action), regulatory proceedings (eg the ACCC super-market pricing proceedings ) or commissions of inquiry (eg the Aged Care Royal Commission), indicating that entrepreneurial plaintiff firms and litigation funders remain keen to capitalise on previous proceedings or inquiries as a 'road map' for new filings.

The most common form of claim

As noted in our analysis of the class action filing statistics, the filing in Victoria of 19 employment class actions on a single day skewed the data for employment class actions last year. With those included, employment class actions were by far the most common form of class action in 2025. If removed, employee claims maintained their trend in recent years of being the second most common type of class action.

Notable trends in employment class action risk in 2025 include:

• Filings concentrated on the Retail, Hospitality and Leisure sector, particularly around underpayments and historic employee entitlement structures, with five claims targeting major national hospitality and retail employers.
• The 19 Victorian junior doctor class action filings brought the total to 30 of such class actions filed in the state over recent years, the first of which was commenced in 2021. A landmark settlement, including all 30 claims, was approved in late 2025. The settlement was also the first occasion on which a reimbursement payment was awarded to an industrial association for its time and costs incurred in pursuing a class action. We expect that marked the end of junior doctor underpayment claims in Victoria, but the risk remains in other jurisdictions with a similar claim filed in late 2025 in the Supreme Court of Tasmania, and another filed in 2026 in the Federal Court on behalf of doctors in New South Wales.
• Two new employment claims were brought in the government sector; one based on alleged underpayments and the other raising allegations of sexual harassment and discrimination.

Looking ahead:

• The Federal Court’s decision in September 2025 that the use of contractual set-off clauses to discharge obligations under a modern award may only operate on a pay-period basis is a key development that may shape class action risk for employers in the years ahead.[1] By limiting the ability to offset over-award payments across multiple pay periods, the decision increases the prospect that individual pay-period discrepancies may combine into cohort-wide underpayments. We expect this will increase the attractiveness of class actions as a mechanism for pursuing payroll and industrial instrument compliance issues, particularly within large, shift-based workforces.
• More generally, employment class action risk is set to remain a staple of the class action landscape, as promoters continue to find new ways to bring claims against employers, as demonstrated by the diverse range of class actions in 2025.

Federal Court primary forum

The Federal Court remained the primary forum for funded class actions in 2025, with more than a third of new filings involving a litigation funder. In the Supreme Court of Victoria, two of the five new class actions were funded, with the remainder subject to Group Costs Orders (GCOs).

Clarity on Common Fund Orders

In August 2025, the High Court delivered its decision in Kain v R&B Investments,[1] providing important clarity on common fund orders (CFOs). The Court confirmed that CFOs—which permit litigation funders to recover a commission from the recoveries of all group members—may be made at the time of settlement or judgment, while reaffirming its earlier decision in BMW v Brewster[2] that CFOs cannot be made at the commencement of proceedings. The court also held that 'Solicitors’ CFOs', which would permit lawyers to be paid a commission from group members’ recoveries, cannot be made at any stage because they are contrary to the prohibition on contingency fees.

The decision brings greater certainty as to available funding mechanisms, enabling class action promoters to structure proceedings with greater confidence. Uncertainty nevertheless remains as to whether a CFO will ultimately be granted, and at what rate. The decision also entrenches Victoria’s distinct position in the funding landscape, being the only jurisdiction in which a funding order may be made in favour of solicitors through the GCO regime. A separate High Court judgment[3] confirmed that a Victorian GCO is not enforceable in NSW and suggested that legislative intervention would be required for similar mechanisms to operate elsewhere. More than five years after the introduction of GCOs, no other jurisdiction has followed suit, leaving Victoria the preferred forum for proceedings that depend on solicitor‑based funding models.

GCO rates: ratcheting and variation

Questions concerning the structure and adjustment of GCO rates have continued to occupy the Supreme Court of Victoria. Since 'ratcheted' GCOs—which involve a sliding scale GCO rate—were first proposed in 2022, judges have taken differing approaches. In late 2025, the court declined to make a ratcheted GCO, instead fixing a flat rate of 30%, emphasising the court's ongoing supervisory role and the power to vary a GCO rate (if appropriate) on settlement.

That reasoning aligns closely with the court’s developing approach to the variation of GCO rates. To date, GCO rates have only been varied downwards on settlement, to improve returns to group members. For example, in September 2025 the court reduced a previously approved GCO rate from 24.66% to 17.39% to reflect an early resolution and comparative returns that would have been available under other funding models. Whether the power to vary GCOs can operate in both directions remains unresolved, with plaintiffs in another class action seeking an uplift of the GCO rate on the basis that the previously approved rate renders the proceeding financially unviable.