Class actions

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 insurers.

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 members


Here are some reasons why a class action might not be suitable for you:

  • Lawyers may not be able to represent all the needs of different class members
  • 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 settlement?
  • 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 action?

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.

Related links

Last updated: 17 Aug 2015