Australian Court Denies Costs Protection When Lead Plaintiffs Are Substituted In Class Actions

Key Points

• In representative proceedings, an issue arises regarding costs liability when a person is substituted for the lead plaintiff. This is because, although Australia generally requires a losing party to pay the successful party's legal costs, class action legislation provides group members with immunity against cost orders. Accordingly, a question arises as to whether former lead plaintiffs, who upon substitution became mere group members, can be held liable for pre-substitution costs. Similarly, a question arises in relation to the liability of new lead plaintiffs, who were formerly mere group members, in relation to costs incurred prior to their substitution as lead plaintiffs.