Courts confirm common fund orders for class actions - but will they decline anyway?

The New South Wales Court of Appeal and the Full Court of the Federal Court of Australia have simultaneously delivered decisions confirming the Courts’ power to award 'common fund orders' in representative proceedings.

Common fund orders

A common fund order allows those bringing and funding an action to recover their costs out of the group’s total settlement - even though many group members have not specifically agreed to this arrangement.

Over the last two years, many litigants and funders have sought common fund orders to avoid the costs of signing up individual group members through a book build process.

Despite these decisions, we think book building will continue to play an important role in Australian class actions.