Contingency fees introduced for Victorian class actions

Victoria has departed from the rest of Australia, becoming the first and only state permitting contingency fees to be charged in class actions.  

Last night, the Victorian Government passed the Justice Legislation Miscellaneous Amendments Bill 2019 (Vic) which introduces this new power of the Court to permit plaintiff law firms in Victorian class actions to receive a percentage of the damages awarded to all class members.

The Bill amends the Supreme Court Act 1986 (Vic) introducing powers of the Supreme Court of Victoria to make ‘group cost orders’ in class actions and amend them at any time, including the percentage on which the solicitors’ fees would be calculated  provided that the Court is “satisfied that it is appropriate or necessary to ensure that justice is done in the proceeding”.

This new legislation has been introduced in circumstances where the High Court’s recent decision in BMW Australia Ltd v Brewster & Anor and Westpac Banking Corporation & Anor v Lenthall & Ors [2019] HCA 45 indicated that a consideration of funding arrangments was not within the ambit of a similarly worded power in the Federal Court Act which uses the phrase “appropriate or necessary to ensure that justice is done in the proceeding”. Click here to read our article on the High Court decision.

In an uncertain market recovering from an unprecedented pandemic, it will be interesting to see the impact this may have on the number of class actions commenced in Victoria. 

If you have any questions or would like to discuss these legal issues, please contact us.