On Just Terms S2 E7: Reform priorities and future decisions with Dr Peter Cashman

In this episode of On Just Terms, partners Jason Betts and Melissa Gladstone sit down with Dr Peter Cashman, adjunct professor at UNSW and leading barrister, to discuss the evolution of Australia’s class action regime. 

Drawing on decades of experience, Dr Cashman reflects on its role in improving corporate governance, product safety and access to justice, while addressing ongoing challenges around cost, delay and efficiency. He also outlines a range of reforms aimed at creating a faster, fairer and more effective class action system for all participants.

Transcript

Welcome And Guest Background

SPEAKER_03 0:09

Today we're joined by Dr. Peter Cashman, adjunct professor at the University of New South Wales, and a barrister who has played a key role in developments in Australian class action case law and reform. We'll be discussing how the class action landscape has developed, what has gone right and what has gone wrong, as well as Peter's insights into areas of reform. Thank you, Peter, for firstly being generous with your time and also joining us on the podcast.

SPEAKER_01 0:37

Hi Pleasure.

SPEAKER_03 0:38

We are very grateful to have you here today because part of our series is really focusing on the corporate risk and liability landscape in Australia. Class actions are a big part of that. And if I may say, you've pioneered the Australian class action practice in many respects, not just as a practitioner but also as a law reformer. So you're uniquely placed to comment on a range of issues. One is stepping back and looking at the sorts of contributions that the class action regime has made. I'm sure we'll get to both positive and negative, but perhaps starting with your thoughts around the importance of the class action mechanism and its development over the years? Sure.

Why Class Actions Matter

SPEAKER_01 1:18

Well, I think there are many and varied advantages of the regime, and I'll just mention four. First of all, it obviously provides an effective procedural mechanism for holding individuals, governments, and corporations accountable for contraventions of the law. Secondly, I think it's fairly well established that either the bringing of class actions or the prospect of a class action has improved standards of corporate governance, of government conduct, and in many respects in the area in which I practice, product safety. Thirdly, and not least of all, it has provided a remedy and access to justice and compensation for large numbers of people who have compensable claims arising out of whatever misconduct is in question. And finally, of course, it solves a lot of problems with judicial management because rather than having a multiplicity of individual claims, you have a procedural mechanism for the aggregation and resolution of those claims, and that means less demands on courts. And so that is in the interests of the administration of justice.

SPEAKER_03 2:42

And so it's no doubt had that impact you mentioned on corporate behaviour. Are there particular cases in your journey or examples of where you've seen the class action mechanism have the most significant impact that you could share?

SPEAKER_01 2:56

Well,

Product Safety And Regulatory Change

SPEAKER_01 2:57

there are many, but in the product liability area, which is where I've been mainly practicing, a lot of the early cases in the United States in which I was involved, of Delcon Shield, Bjork Charlie Heart Valve, led to a major change in the regulation of products, led to the introduction of mandatory reporting of adverse reactions, and led to a whole other regulatory framework that was designed to stop what were hitherto fairly defective, badly tested, and quite often dangerous products getting into the market. So in that area, it's had a profound effect on, I think, the conduct of corporations that manufacture products, but equally on the regulatory system. Now adverse reactions are required to be reported. There's much greater regulatory scrutiny. Standards for the testing of the safety and efficacy of devices and drugs have improved. And historically, those regulatory regimes were restricted to drugs. It was only in relatively recent years they extended to devices. And that was in the aftermath of many of the cases in which I was involved. The IED case, the Bureau-Charlie heart valve, etc. Having spent 10 years litigating IED cases, I finally made it above the navel. I got to deal with breast implants.

SPEAKER_03 4:10

You are an expert in some subject areas that are many and varied, but I I suppose that's the consequence of being a class action lawyer. You really have to deep dive into these topics.

SPEAKER_01 4:19

Indeed.

The Three Big System Downsides

SPEAKER_00 4:20

One of the things that I suppose comes with a lot of types of complex litigation, though, is the cost of running it and also the time it takes to get to a final outcome. From your side of the line, you're talking about individuals and the impact on their lives. The longer the case is run, the longer it takes for them to, if there is a settlement, to them to receive any of this compensation from, I suppose, our side of the line, thinking about our clients and corporate Australia. You know, it's a diversion of significant resources from getting on and doing the day-to-day business of the companies. Are you seeing that the duration of these cases is increasing? Certainly what we're seeing from our end. And what do you think is maybe driving this increase in duration and cost of running the cases?

SPEAKER_01 5:05

Sure. Well, notwithstanding the advantages to which I've referred, there are three major downsides of the system as it's working at the moment. First of all, the costs are prohibitive on both sides of the bartender for reasons that I'll come back to. Secondly, on the applicant side, the transaction costs absorb a very substantial amount of either the judgment or the settlement amount. So the ultimate beneficiaries of the litigation, if it's successful, only recover a relative, well, in some cases, only about half. And thirdly, it's protracted. The top ten cases that settled last year took on average close to five years from commencement to settlement. And then there's a protracted period of settlement administration. And in some cases that can take many years, and in one recent case, it took ten years. So, you know, transaction cost delay are interrelated, and that's a problem from everyone's point of view.

SPEAKER_00 5:58

Yeah, 100%. And I mean one thing we're finding as well is that the longer they run, one real issue we see is obviously people's memories fade as as time goes on. So we have challenges with running the cases, but also from that f financial impact and thinking about the various stakeholders, the cases can actually just become harder to resolve when everyone's been at it for five years, as as you've said. So I suppose that's one of the other things is are are some of these cases more of them running to trial because they're harder to settle because of the the cost impact that, as you say, comes with the increased time it takes to get to either mediation or court.

What Really Drives Legal Costs

SPEAKER_01 6:36

I'm sure that's true, but I think one needs to understand why it is that the process has become so expensive. And there are a range of complex and multifactorial factors that are driving the escalation of costs on both sides of the bar table. On the plaintiff's side, quite often cases are pleaded in unnecessarily broad terms. Causes of action that are used aren't often necessary in the product liability area. You often don't add much by pleading knowledge or intention-based cause of action on top of the strict liability provisions. On the defendant's side, in my experience, some cases are unnecessarily defended for strategic or other reasons, and that creates its own problems. So that's the sort of pleading side. Then at the court side, the courts themselves don't often manage cases as effectively or efficiently as they could. Judges, although they pay lips pay lip service to proactive judicial management, these cases are not as proactively managed as well as I think they could be. And then, of course, you've got financial and commercial realities that drive up costs. The introduction of hourly rates has had a significant effect on the cost of litigation and the cost of legal services generally. The deregulation of legal costs away from the old system of scale to unregulated or deregulated hourly rates has increased the cost of litigation. Now I think that's about five or more. You've got a better idea than I have, but certainly from my experience, law firms these days, certainly on the plaintiff's side, expect employees to recover a hell of a lot more than three times their salary. And that has a whole range of consequences. Hourly rates for paralegal staff, in my view, are excessive. There's a lot of duplication of work. You have many, many people working on the case, A, because it's complex, but B because there's a degree of over-servicing. And that's exacerbated, in my view, by the fact that we have a divided legal profession. I'm a great advocate of a separate bar as a barrister, but in many of the cases in which I'm involved, both historically and now, we have teams of barristers, you have teams of solicitors. The cases that I'm now running, I'm getting submissions from the other side signed by four or five council, often two senior council. That is supported by an infrastructure of multiple partners, associates, baralegals on each side. That obviously creates increased cost. The substantive law is a problem. The absence of percentage fees has meant that transaction costs are higher than they would be, for example, in the Victorian regime where you've got group cost order, and I'll come back to that. And also the fact that many areas of law are vague or unclear on both the defense side and on the plaintiff side means that the issues aren't as crystal clear as they possibly could, and that makes it harder to resolve them. There are collateral claims that have to be dealt with in the person injury case, which, for example, health care recovery, social security recovery. That adds to the cost of settlements, it adds to the cost of settlement administration, and it erodes the money that would otherwise be payable to class members. Because many of these cases, those amounts aren't in fact recovered where you have a reduced value settlement. But the health and social security insurers insist that they're entitled to be paid in full out of any settlement. So that's a big problem. And then you have the transaction costs incurred in processing and paying those claims. Then you've got the protection, so-called protections of cost agreements. And in the class action context, they're totally illusory. Although you're required to disclose to clients your billable time and estimates of costs, in a class action, the applicant knows they're not going to pay the costs at the end of the day. And the people who are going to pay, when it comes out of the pockets of the class members, they're not party to any of the funding or cost agreements. So those arrangements simply have no application, no real bite in the class action context. Then, of course, you've got commercial litigation funding. In the absence of a public fund, which is the only recommendation of the Australian Law Reform Commission that was not implemented, you now have commercial funders filling the void, and quite rightly, because they finance cases that wouldn't otherwise get to court, but it comes at a very high price. And those costs are on top of the legal costs incurred. And so that adds significantly to the transaction costs borne by the parties and deducted from any settlement. Then, of course, you've got a problem with party-party costs. The successful applicants don't get the full amount of the costs incurred in running the case from the other side. When I started practice, the expectation was you'd get about 75 to 80% on a party-party basis. I think at the moment I would tell people asking for my advice is probably around 50-60%. Then, of course, you've got expert evidence. It's not unusual for both sides to have teams of experts. Experts don't do it for love, they do it for money. And they're very expensive. Their hour rates are often, dare I say, as high as lawyers. I once had a case with an American expert who charged me from the moment he left his door in Baltimore to the moment he got back to the United States. And when I challenged him about this, he said, well, it was a practice he learned from lawyers. So on top of that, you've got court-appointed ancillaries, referees, contradictors, cost assessors, all of whom charge alley rates and all of whom expect to be paid out of the pot. Then, of course, you've got court fees. The courts charge filing fees, appearance fees, transcript fees. They've gone up dramatically over time. The money doesn't go to the court system, it goes into consolidated revenue. So that adds substantially the cost. Then on the plaintiff's side, you've got the need to protect against adverse costs. So you've got ATE insurance. Those premiums are very expensive. They're a percentage of the amount of indemnity. And the initial costs and the ultimate costs if the case is successful, they're very high. And often the commercial funders or the law firms seek to pass that cost onto the beneficiaries of litigation by deducting it out of the settlement amount. So that further erodes the settlement. Then, of course, you've got settlement administration. In North America, it's unheard of for the law firms running the cases to implement the settlements. They go off to third-party professionals. Here, as Justice Lee once said, it's become a cottage industry. The law firms who run the cases expect to process the settlements. They charge high alley rates. It's often a protracted process. And that again erodes the amount payable to the class members. Then, of course, you've got a problem that I may not win any friends for mentioning this, but you've got defendants are entitled to a tax deduction, defendants and I presume insurers, a tax deduction for the costs incurred in defending these claims. Now, when they're successful, I think that's a good idea. When they're unsuccessful, I'm not sure that's very defensible on policy grounds. And then, of course, you've got the fact that insurance cover on the defendant side is not disclosable, unlike in North America where it is. So the plaintiffs are required to disclose their funding arrangements, and the defenders are not required to disclose any of their insurance or indemnity arrangements. And many policies, as you're well aware, include within the limit of indemnity the legal costs of defending the claim. And I suspect it may not be unusual in some cases for a defended insurer to say, well, if I'm going to pay out anyway, I might as well spend a lot of money fighting the claim. So all of those complex commercial and procedural and substantive factors tend to maximize the costs incurred in the resolution of these cases, which is a good thing for the beneficiaries, the lawyers, and the funders. And why should I complain? I get paid win, lose, or draw. But I think in the interests of clients and from a consumer's perspective, it's not a good deal if half the money in many of these cases is absorbed in transaction costs.

Litigation Funding And The Missing Public Fund

SPEAKER_03 14:33

A lot of the issues are a derivative of the fact that the regime hasn't got a program for financing these claims. And we've spoken before about our disappointment in some respects that that's meant, yes, there's a lot of money being spent for what I might call remunerative class actions, but less for what we might call social justice claims. That's not that they're never brought, but they're less attractive. Do you think the debate about a public fund has finished, or is there a is a opportunity to refresh that discussion?

SPEAKER_01 15:02

I'm doing my best to keep it alive. As you would know, the recommendation of the ALRC in its original report was that there should be a fund. The Victorian Law Reform Commission on its civil justice review recommended there should be a civil justice fund. The Civil Justice Council in the UK has recently recommended there should be a not-for-profit fund. And in the absence of that fund, litigation funders have come in, understandably, for profit. They're not doing it for love, they're not doing it for access to justice, they're wanting to make money out of it. And those transaction costs are high. I think a fund could be set up which would be self-funding over time based on the Canadian models, where it could take a percent, say 10% rather than 30%. It could recover costs, and if we have CPRE awards, which I'll come to if I have an opportunity, it could be the beneficiary of CPRE payments as well. So I think the reason why the government was antipathetic to the idea originally was it were concerned about the cost of public revenue. I think it could be structured in a way that would be self-funding and wouldn't be reliant upon recurrent government funding. But that's an argument I'm yet to persuade many people of. Trevor Burrus, Jr.

SPEAKER_03 16:08

No, I mean, uh and and I think the ALRC and your VLRC both identified self-funding models, but hasn't, I guess, got political traction. But it seems to me that it would allow the regime to focus on some cases that are perhaps deserving of financing but that aren't getting it at the moment. Trevor Burrus, Jr.

SPEAKER_01 16:26

Well, it would also protect defendants because it would guarantee adverse costs. So that would protect defendants and it would also take the burden off the plaintiffs and having to buy very expensive private insurance after the event insurance, again from insurers who are willing to make a profit out of it. So there are a whole range of reasons why I think it makes economic sense and good policy sense to bring into play some not-for-profit organization that it will provide financial assistance. And as you've adverted to, commercial funders are interested in the low-hanging fruit. They're not very sympathetic to product liability cases, personal injury cases, environmental cases, human rights cases. Yes. Significant proportion of the cases which they fund are securities cases. Yes. And that is a problem in terms of access to justice. Yes. Because that need in those other areas isn't met. And also their threshold for commercial profit has gone up. A solicitor said to me last week that one of the funders had told her that the funder with whom she was dealing required an expected return of at least $200 million in damages before they would regard the case as worth funding.

SPEAKER_03 17:35

Right, yeah. That is a higher threshold than than I than than I than's colloquially understood. That's interesting. That was an excellent sort of articulation of the costs pressures for those that prosecute, those that defend. Just an observation as a barrister now, and then thinking back over the number of years that you've you've been involved in these cases, we're still in the space where time, cost, delay are still features of the regime. We haven't solved for that yet. Are those problems coming from different sources than they once were? Is it a different complex mix now? Or is it still discovery experts? Is it the same stuff that's slowing us down?

Reform Ideas To Cut Delay

SPEAKER_01 18:13

I think our system of civil dispute resolution hasn't really changed dramatically, although it's moved towards a theory of judicial management, but it's in fact still pretty much party control. And there are a whole range of solutions that I think could be introduced to more quickly, more efficiently, and more economically resolve disputes. And if you'd like me to elaborate on what I think some of the solutions are. Yes, that was leading to that. Well, I've got a shopping list for twelve. I'll refer briefly to them. At the commencement stage, there's been a big move in the UK in the aftermath of the Wolf reforms to introduce pre-action protocols. So the plaintiffs were required to give more adequate disclosure of the nature of the claim, the quantum of the claim, the evidence on which the claim was based, and equally defendants were required within certain time frames to disclose much more information about their forensic strategy. That led dramatically in the UK to a significant increase in settlements. It exists in South Australia. It was recommended by the Victorian Law Reform Commission. It was included in the first amendments to the legal civil procedure bill in Victoria by the then Labour government. And the first thing the incoming government did after lobbying from the legal profession was to repeal those provisions. That was a problem. So we've got the genuine steps obligation, that's lip service. Write a letter, get a reply, and then you file. It doesn't really resolve meeting disputes in my experience. No one's really seen a sanction imposed for a No. Second problem is I think, and again, the English example is a good illustration of this. In the UK, in the aftermath of a more recent reform initiative, there's a requirement to both sides to disclose cost budgets to themselves and to the court. And the court has a proactive supervisory role in reviewing and indicating its approval or disapproval. And the dieselgate litigation is a good example of that recently. On the plaintiff's side, the court reduced the estimated budget for the plaintiffs by 75%. It was so outrageous. On the defendant side, it got off a little better, their budget was only reduced by 50%. But here you had a budget that was so off the Richter scale in terms of the projected costs of the litigation, where at the outset parties were required to disclose that. And where the court came in and said, look, under our system, it's at the end of the process after the costs have been incurred where there's scrutiny. So I think that's a reform. Thirdly, I think we need to introduce in the federal court and in other states other than Victoria, statutory standards governing the conduct of litigants, lawyers, and witnesses. The Civil Procedure Act introduced quite wide-ranging standards for conduct that have not been followed elsewhere. We have the overriding objective, which is a sort of mantra following WOOF, but it doesn't translate into prescriptive obligations in the way that the Victorian legislation does. So I think there's an argument for that.

SPEAKER_03 21:16

To drive more efficient behaviour or less cost waste.

SPEAKER_01 21:19

And it introduces sanctions. Yes, yes. Cost sanctions and other sanctions for non-compliance. And I won't go into the detail of what those obligations are. We when I was with the Law Reform Commission, we called them Ten Commandments. Yes, okay. So there are ten of them. The next problem is, again, in Victoria, there's now a statutory obligation to disclose early on, without any discovery order, documents critical.

SPEAKER_03 21:41

Yeah.

SPEAKER_01 21:42

If you're aware of them.

SPEAKER_03 21:43

Very familiar with the obligation.

SPEAKER_01 21:45

Section 26 of the Victoria. Why don't we have that elsewhere? It seems to me axiomatic. If you know you've got document on both sides.

SPEAKER_02 21:52

Yeah.

SPEAKER_01 21:52

It's a two-edged sword. Plate is equally. If they've got documents that are critical, whether they're good or not, they're going to have to disclose them as well. Next problem is we don't have a system of getting to the truth very early, leaving aside discovery. We rely upon trial and examination and cross-examination of witnesses at trial. Well, most cases never get to trial. And I think there's a strong case for more proactive use of early procedures for oral examination of people who've got relevant information.

SPEAKER_03 22:19

Interesting. So depositions, essentially.

SPEAKER_01 22:21

In theory, there's power to do that, but it's very rarely exercised. When the Australian Law Reform Commission looked at this on its discovery reference, it made a recommendation that was pretty watered down about limited circumstances in which you could have oral discovery of people who had documents. But in North America, most civil procedure is entrenched with deposition procedures. You get to the truth early on, and I can tell you, in case I'm involved in the moment where I've just got access in the Australian litigation to all the depositions in the U.S. litigation, they're very helpful. I see. So I think that's a another step that could be introduced. Percentage fees I've talked about. We need to follow the Victorian model throughout the country in the federal court and in other states and allow lawyers to act on a percentage fee basis. That is dramatically reduce the transaction costs in Victoria. As the Victorian Law Reform Commission pointed out, the comparison with the group costs order average about 24% compared with funded cases, yeah, 48%. So from an applicant's point of view, it's a better system. It's a determinant and from a client's, I've never had a client in my life who wouldn't have preferred a fixed fee at the outset than the open-ended alley billing. How much is it going to cost? Well, I've no idea. So that's another reform that I think could be made.

SPEAKER_03 23:35

Just out of interest, are you hearing anything that would suggest if we were having this discussion in, say, a year there would be contingency?

SPEAKER_01 23:41

I think there are rumblings at the moment. I know that there are certain judicial officers that think it's a good idea. There are certain attorney generals who think it's a good idea. The law council has historically been against it, but I'm on one of the law council committees and we're inviting the law council to reconsider its position at the moment. It just seems to me to make sense. I mean, the theory was that it was bad for lawyers because it would encourage undue profits. Well, if you look at the statistical or the empirical data, lawyers on average in class action litigation, according to the research that Amelia Simpson and I did, get on average 16% of the amount. Yes. But when you add to that commercial funding of 30%, we're getting up to 40-45%. Even if they get 24%, that's a lot better than 48% coming out of the pockets of the successful class members. Trevor Burrus, Jr.

SPEAKER_03 24:28

Conceivable as well that might drive a lowering of settlement values, perhaps, because as we know, some of those agreements are being made to accommodate a fairly significant cost base.

SPEAKER_01 24:39

Yeah, although it does align the interests of the fee with the recovery, because the higher the recovery, the higher the fee on a percentage basis. So to some extent it might cut the other way. But I'm not sure the nature of fee arrangements necessarily determine the quantum of settlements. The problem on the applicant side is a lot of those costs are born out of the pie rather than recovered in successful cases. Then, of course, you've got the problem that although there's a degree of disclosure at the outset on the applicant side of funding arrangements, the court, in the aftermath of a high court case, no longer gives its imprimata or reviews the commercial funding arrangements. That's left to the end where an order is sought, common fund order is sought. My view, the court should be made aware of the funding arrangement at the outset. And if it's got any concerns about it, let it be known at that stage.

SPEAKER_03 25:30

So they reinstate the ability for a common fund order to be made at essentially a concern.

SPEAKER_01 25:35

Or if not an order, at least a bit like the cost budgets. The court can express a view as to whether they think the court thinks it's reasonable or not. And if the lawyers want to if or if the lawyers or the funders want to plow on without regard to that, then they run the risk at the end of the day they're going to take a haircut.

SPEAKER_03 25:49

Yeah.

Settlement Administration And Competing Claims

SPEAKER_01 25:50

The other problem we have, and I've adverted to this, is settlement administration. It's too expensive, it shouldn't be done by law firms, or at least it should be put out to tender. Yes. And the federal court's moving in that direction at the moment. Justice Lee put out to tender in the pelvic mesh litigation. I acted for one of the tenderers, we came second. But the people tendering to do that settlement administration were competing with each other. That drove down the cost. And they were prepared to do it significantly less and significantly quicker than was originally proposed by the law firm that ran that case. So market forces competition may drive down settlement administration. Although I note with some concern that one of the successful cases recently, the Deloits who are acting for the settlement administration are claiming confidentiality over the way in which they're going to administer the settlement. And I think that's a problem. I think there needs to be transparency about who's doing what, how they're billing, and what how long it's going to take and what it's going to cost, particularly where the class members are going to bear that cost. Then, of course, we've got the problem of competing class actions. In my view, there should be a fixed time limit within which any competing class action should be required to disclose itself. And appeals from carriage motion should not be appealable. They shouldn't be appealed. Canada's just introduced legislation along those lines.

SPEAKER_02 27:05

Yes.

SPEAKER_01 27:06

That where there's been a proliferation of competing class actions, particularly in Victoria, that adds to everyone's cost. Defender's costs, plaintiff's costs. Yes. The litigation stalemated until you sort out who's going to run it, and then there's an appeal. And in some cases, that process has taken several years. So that's a problem.

SPEAKER_03 27:27

That would only work, I think, if it also covered cases that might be the moratorium on further filings, cases that might be filed in other jurisdictions. So there's some thinking to be done around that as well.

SPEAKER_01 27:37

That's true. But the courts have been pretty good at grappling with the problem of multi-jurisdictional conflicts that they've had joint sittings. The federal and the Supreme Courts to manage those. So I think courts are very creative. But at the moment, there's no time limit and there's no first in best served rule. No. So there's an incentive to someone to come along late in the day, clone the pleadings of someone who's already filed it. And if there are more resourceful and more they have a better track record, they may get carriage of the matter, and the other firm who's been acting in the case for some time will just go by the way. And they're costs thrown away. Yes, they are. So that's a problem. Then, of course, we have this vexed question of CEPRA remedies. Yes. In my view, there should be a statutory power. In a case where unjust enrichment can be established and where it can be quantified, I think there's an argument that there should be power for the court to make a CPRAY order for that money to come out of the pockets of the defendant who's been found to have contravened the law and given to some worthy cause. Now, it sometimes happens in settlements, not unusually. The consumer credit legal centre in Victoria was funded out of a CPRE settlement. But there's an ongoing issue of whether there's power to award it in the absence of settlement. That could be solved by a statutory right. At the moment, in many, if not most class actions, the majority of class members don't recover. And in the Volkswagen litigation in which I was involved, for example, there are 100,000 people in Australia who had Volkswagens, who had the problem with the diesel emissions. It was settled whereby all of those people had an entitlement to recover out of the settlement fund, although it was a CAP fund. Less than half made a claim, even though the individual amounts were several thousand dollars. And in many other small consumer cases, the majority of people who are affected will not ultimately get compensation at the end of the day. Either because they don't put the hand up, either out of ignorance or they don't want to incur the transaction costs, or it may not be economically feasible to incur the transaction costs of identifying and paying those claims. And the current Wars Coles Matter is a good example of that. They're assuming the case is successful, and I declare my interest acting for the applicants in the class action, which is piggybacking on the ACCC case. At the end of the day, the only people who could conceivably be compensated are those who have rewards cards where there's an electronic record of the transactions. Everyone else who bought the products wouldn't keep receipts, wouldn't have a clue what they paid for Coca-Cola two years ago or whatever. So in the absence of a CPRA remedy, presumably, most of those people would never be compensated. So I think that's a problem. And finally, of course, and we've adverted to this, there's a need for a not-profit, not-for-profit fund to come in and help deserving cases and provide cost protection in the interests of defendants.

SPEAKER_03 30:25

That's quite a shopping list. And lot a lot of those would be directed towards. I know you've written about this and spoken about the proportion of settlements when they're occurring, which are going to what I'll loosely call the promoters of the class action as opposed to group members.

Fair Shares Without Hard Caps

SPEAKER_03 30:40

So clearly many of these would be directed towards that issue. And are there other would you support a a cap uh that was flirted with some time ago on non-group member recovery, or are there other mechanisms that other than court supervision that we need to ensure a fairer distribution of settlements?

SPEAKER_01 30:57

I'm not in favour of fixed caps because there are a whole variety of circumstances where you need to have a bespoke sort of resolution of the complex issues. And there are many cases where the transaction costs are abnormally high at the end of the day, in part because there may be a limited fund to recover from. There may be insolvency or bankruptcy or whatever. And a number of recent settlements there's one reported yesterday, the Quintus case, where I think the settlement is $13.2 million. The lawyers, I think, are claiming $17 million, and the funder wants 30%. And if each of those claims was accepted, the class members would get 18% of the ultimate recovery. Now, I don't think there's a simple solution to that problem because no doubt the legal costs were and they don't seem excessive. The funders' commission is not out of kilter with what funders want. But where you've got a limited pot, then there's a real problem because there's just not enough money to go around, which is often the case. I don't think there's a one-fits-all solution to that problem. I think a combination of statutory protections, judicial management, and s obligations on the participants in the process to avoid unnecessary escalation of costs might help reduce the transaction costs, might expedite the resolution of claims and might mean that they're capable of resolution much more economically than they are at the moment. I live in hopes.

SPEAKER_03 32:29

Yeah, well, no, I can tell.

Closing Reflections And Takeaways

SPEAKER_00 32:31

I think that's covered everything that we were planning to talk to you about today.

SPEAKER_03 32:38

Thanks again because hearing from someone who's lived through three decades of class action experience is I think our audience would benefit from that. So thank you, Peter, for being so generous with your time. My pleasure. Thank you.

SPEAKER_00 32:51

Thank you for joining us for our conversation with Peter. The class actions regime has had a significant impact on the Australian litigation landscape. There have been improvements in terms of access to justice, which is often cited as a basis for the regime, but it is also a system ripe for reform. In general, class actions are taking longer to resolve and costing more, and transaction and administration costs a road returns to group members. Now we've gained some fascinating insights into the evolving class actions landscape, and in particular, Peter's many areas that he thinks are ready for reform. We will continue to explore these themes in future episodes of On Just Terms, and we look forward to future discussions and we'll see then about how we can manage these resources that Australian corporates interface every day. Thank you.