Class Actions

Definition

Class Action: Legal proceedings allowing the claims of many individuals against the same defendant, arising out of the same or similar circumstances, to be conducted by a single representative – Butterworths Concise Australian LegalDictionary, 3rd ed.
Positives of Class Actions Class actions bring together a group of people who may otherwise not be able to afford to litigate a small claim. By joining many people together, bargaining powers are increased which in turn, equalises the power large corporations have over individuals who may not have significant resources.
This increased power, means the larger corporations may be more likely to take the claim seriously, and be more inclined to settle early, rather than take the matter through the courts.

Negatives

Class actions are complex and expensive to litigate, and they therefore take up a lot of time for law firms and the courts, which means expensive fees. At the end of the day, the individuals in the class action may then only receive a minimal payment, after court costs and legal fees have been deducted. As there are large numbers of plaintiffs within the action, the degree of control one person has over the legal process can be minimal. It should also be noted that individuals generally waive their right to sue as an individual by joining a class action and being named.

Closer to home

While most people would be familiar with large class actions against corporations, such as that depicted in the movie ‘Erin Brockovich’, where a large payout was awarded to victims of toxic pollution and their families by California’s Pacific Gas & Electric in 1993, a relatively new class action has arisen in Queensland.
Following the 2010/2011 South East Queensland floods, a Class Action is set to be filed against Seqwater and the State of Queensland, the owner and operator, of the Wivenhoe and Somerset Dams. According to Maurice Blackburn, ‘The class action will seek damages for individuals and businesses that suffered economic loss or damage
due to the negligent operation of the dams in the lead up to and during the flood’.

Maurice Blackburn has stated that the class action will be seeking the following types of damages:
• Damage caused to business, home, furniture or possessions;
• Financial loss caused as a result of business interruption during and after the flood;
• Decreased property value as a result of the flood;
• Costs associated with temporary relocation during flood repairs;
• Costs associated with rebuilding, cleaning or repairing flood damage; and
• Costs associated with replacing lost or irreparably damaged possessions.

In January 2011, the Queensland Floods Commission of Inquiry was established to examine the flood events. A final report by the Commission, released in March 2012, found that the Wivenhoe Dam had been ‘operated in breach of the manual that governs its operation… It was found that the dam operators had failed to use rainfall forecasts in making decisions about dam operating strategies’.
While there has been recent speculation in the media regarding the accuracy of the flood maps released by Maurice Blackburn, the firm has confirmed that the maps will not be submitted as evidence in the matter. The class action is planned to be filed in April 2013, and it will be interesting to see how it progresses.