Before you take action
A class action is a legal case filed by a single representative
acting on behalf of a group. Here we explain how class actions work
and the pros and cons of joining a class action.
What is a class action?
A class action is a legal proceeding where the claims of many
people against one person or entity are dealt with together.
Opt-out and opt-in class actions
Most class actions in Australia are conducted on an 'opt-out'
basis. The principle of the 'opt-out' regime is that while people
within the class are not parties to the litigation, they remain
within the class unless they take positive steps to opt out,
indicating that they do not wish to be bound by the outcome
(whether it is a judgment or settlement).
The opt-out process involves the Court making orders that notice
must be given to group members of the right to opt out of the class
action before a specified date.
You may also have the opportunity to be involved in 'opt-in' class
actions in which class members have actively consented to
proceedings on their behalf.
Funded and unfunded class actions
Class actions can either be funded or unfunded.
A 'funded' class action is where one or more persons agree to
fully or partially pay legal fees and other costs. Unless a class
member is the representative applicant they are not liable for
those costs. Class actions in Australia can be funded in many
ways including by a class member or members, lawyers, legal aid,
commercial third party funders, regulatory agencies or
An 'unfunded' class action is where the class members enter an
agreement with lawyers to meet the costs of the legal action
themselves or by way of 'no win no fee' arrangements.
You might choose not to opt out of a class action or join an
'opt-in' class action because it could:
- Resolve a common dispute involving a number of people
- Provide access to justice for you or others who cannot achieve
it on their own
- Let you jointly pursue a claim that would be too costly for you
to do on your own
- Reduce costs and responsibility for individual class
Here are some reasons why a class action might not be suitable
- Lawyers may not be able to represent all the needs of different
- Class members may not later be able to bring their own
individual claims to court
- Any money from a successful claim may be lower than if you were
to take your own case to court
- You may have limited ability to control the proceedings
- There may be conflicts between different parties involved
Should you participate or opt
out of a class action?
Before you decide whether to opt out of a class action, ask
yourself if you have viable alternatives such as private
litigation, dispute resolution or a claim for compensation.
If the answer is 'NO', you should consider the following questions
when deciding to participate or opt out of a class action:
- Will the class action really address your loss or damage?
- Will the cost of being involved be greater than the potential
- Will you get your say during the class action?
- How will decisions be made during the class action?
- Does the person funding the class action have enough resources
to see it through?
- What are your rights as to when you can opt out of the class
Before you join a class action read all the information
available about it, especially what your rights are under the class
action, so you can make an informed decision. Don't just rely on
advertisements or marketing material. Consider getting
independent legal advice about whether you should participate or
whether you have other options.
Before joining a class action make sure you
understand what is involved and how to get the best outcome for
your own circumstances.
Last updated: 17 Aug 2015