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Client Update: New class actions regime for NSW – Bill tabled

26 November 2010

In brief: A new class actions regime for NSW has been introduced into Parliament. Partner Ross Drinnan (view CV) and Lawyer Mark Hare report.

Background

The Courts and Crimes Legislation Further Amendment Bill (NSW) 2010 (the Bill), containing a new class actions regime for the state, was introduced into Parliament on 24 November 2010. 

In August 2010, the NSW Attorney General announced a proposal to introduce a new class action regime. As we reported in our Client Update, a consultation draft Bill and discussion paper were released in October 2010. The consultation draft Bill detailed a class actions regime based on the existing regime for class actions in the Federal Court but with the following key differences:

  • Limitations on the class: a provision to confirm that it is not inappropriate for representative proceedings to be brought merely because the represented class does not include all persons on whose behalf those proceedings might have been brought, or where only those who have entered litigation funding arrangements are represented.
  • Multiple defendants: a provision to confirm that a representative proceeding can be commenced against several defendants even though not all group members have a claim against all defendants. 

The consultation draft also included a provision granting the court power to order a 'cy-pres' remedy, which would have meant that the court could have ordered that unclaimed damages or damages that could not be practicably distributed to group members be paid to a charity or other public interest beneficiary.

Proposed class actions regime for NSW

The class actions regime contained in the Bill is modelled on the regime in the Federal Court. It includes the changes relating to limitations on the class and multiple defendants set out in the consultation draft. 

The Bill departs from the consultation draft in one important respect – there is no provision granting the court power to order a cy-pres remedy. This brings the proposed class actions regime back into line with the existing Federal Court framework, which, similarly, does not make provision for a cy-pres remedy. 

We welcome that amendment to the Bill. The introduction of a cy-pres remedy would have amounted to a major shift for the law in Australia. Having regard to the experience with cy-pres remedies in the United States, where there has been significant criticism of them, we think there are good reasons why the cy-pres remedy should not be adopted.

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