New Class Action Proposals: Ring Alarm Bells For Business

The NSW Attorney-General has this month announced plans to introduce new class action laws which will give the NSW Supreme Court the power to order that unclaimed damages awarded in class actions be paid to a public interest beneficiary which is not a party to, or represented in, the proceedings.

While a draft of these laws is not yet available, the proposals raise a number of important legal issues and practical concerns for business.

Class action procedures were introduced into the Federal Court in 1991. Victoria introduced laws modelled on the Federal Court procedures in 2000. Both sets of laws adopt an "opt-out" approach for members of the represented class. If a potential claimant falls within the class definition they are bound by the decision of the Court unless they take active steps to opt-out of the litigation.