Victorian Supreme Court Denies First Ever Contingency Fee Applications In Class Actions

In Short

The Situation: In July 2020, Victoria introduced landmark legislation to allow, for the first time in any Australian jurisdiction, the charging of contingency fees by law firms acting for plaintiffs in class actions. The charging of contingency fees is only permitted under the legislation if the court makes a "Group Cost Order"("GCO"), which will only be made where the order is "appropriate or necessary to ensure that justice is done in the proceeding".

The Decision: In the first decision of the Victorian Supreme Court in respect of a GCO —Fox v Westpac; Crawford v ANZ [2021] VSC 573—Justice Nichols rejected applications by two plaintiffs in consumer class actions seeking to set the legal fees of all class members at 25% of any future recovery.