18 December 2015

Stay classy WA: the proposed changes to representative proceedings in Western Australia

This article was written by Robert Slattery and Michael Lundberg.

After much anticipation, in October 2015 the Law Reform Commission of Western Australia (LRCWA) released its final report on representative proceedings in Western Australia (Report).

In preparing the Report, the LRCWA received submissions from the broader legal community in Western Australia including from the Chief Justice of Western Australia, the Western Australian Bar Association, the Law Council of Australia, the Law Society of Western Australia, the Mental Health Law Centre and private law firms.

Having regards to the submissions received, the Report recommended that the existing, limited procedure under Order 18 Rule 12 of the Rules of the Supreme Court 1971 (WA) (Order 18 Rule 12) be supplemented with legislation to accommodate greater access to representative proceedings.

If the proposed regime is implemented by the Western Australian Government, we may see class actions filed in the Supreme Court of Western Australia.

The current regime: Order 18 Rule 12

Currently, representative proceedings in Western Australia must be commenced by using the archaic process contained in Order 18 Rule 12. This order provides that a proceeding is only properly commenced as a representative proceeding where “numerous persons” have the “same interest” in a proceeding.

The LRCWA considered the current regime and concluded that it has the same weaknesses as the systems under the various State and Federal court rules. The current WA regime is hardly, if ever, used.

The LRCWA also took the view that the generally restrictive interpretation of “same interest” has provided a fertile ground for lawyers to raise disputes, at an interlocutory stage, as to whether representative proceedings can be validly brought, adding further time and costs to proceedings.

Ultimately, the LRCWA considered that WA’s current rules-based approach to representative proceedings contains an inherently restrictive scope and is unable to protect members of a class. The LRCWA therefore recommended that Western Australia should adopt a legislative regime to supplement the provisions in Order 18 Rule 12.

The proposed legislative approach

The LRCWA has suggested that the legislative scheme should be based on Part IVA of the Federal Court of Australia Act 1976 (Cth) (Federal Regime), which contains a detailed process for dealing with representative proceedings. Similar provisions have been adopted in Victoria under Part 4A of the Supreme Court Act 1958 (Vic) (Victorian Regime) and New South Wales under Part 10 of the Civil Procedure Act 2005 (NSW) (NSW Regime). The LRCWA recommended, however, that the proposed legislative regime should differ from those regimes in certain respects.

The first of these differences is to include a provision similar to s 33T of the Federal Regime (which allows the court to substitute group members as representative parties if they are not adequately able to represent the interests of the group) to allow the court to remove and substitute a representative party on its own motion where it is in the interests of justice to do so.

The second point of difference is that the legislative regime should include a section that is equivalent to s 158(2) of the NSW Regime. This section will provide that a person “may commence representative proceedings on behalf of other persons against more than one defendant irrespective of whether or not the person and each of those persons have a claim against every defendant in the proceedings”. The purpose of introducing this is to avoid the restrictive effect of Nixon v Philip Morris (Australia) Ltd (1999) 95 FCR 453 which provides all applicants must have a claim against each respondent.

Further, the proposed regime should not include a provision similar to s 166(2) of the NSW Regime, which endorses the use of closed classes, as that regime is arguably less consistent with enhanced access to justice for all who may have been affected by the conduct in question.

Conclusion

The proposed regime, if implemented, would be largely consistent with existing State and Federal regimes and could see the Western Australian Supreme Court become a destination for class action claims.

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