Discussion Paper - Law Reform Commission of Western Australia

3.27 While s 33T of the Federal Court of Australia Act empowers the court to
remove a representative party if it appears to the court that the representative party
‘is not able adequately to represent the interests of the group members’ this does not
solve the problem of a conflict between the representative and a group member. As
observed by Gleeson CJ, ‘this is not a mechanism for the plaintiff to be replaced
on the application of group members who disagree with the way the case is being
run’. 47
3.28 There is presently no express rule that sets standards to which the representative
plaintiff must adhere, nor any express test to determine whether there is a failure to
represent the class. The Commission will receive and consider submissions about
the need for codification of the role of the representative plaintiff and requirements
for removal of a representative plaintiff in certain circumstances. The Commission’s
preliminary view is that the codification of rules to deal with a conflict between the
representative plaintiff and the class is not necessary at this point in time.
Plaintiff groups – open classes and closed classes
3.29 By default, claimants are ‘in’ the representative action unless they take the
step of opting out of the proceedings. Sections 33E(1), 33J and 33ZB create what
is known as an opt-out scheme. The practical effect of a default opt-out framework
is that all plaintiffs who have a common interest in the litigation remain in the
representative action unless they make a deliberate decision to leave the group.
3.30 Often, plaintiffs seek to restrict representative proceedings to persons who are
members of closed classes, such as those who may specifically retain the solicitors
conducting the proceedings, or group members who enter into a contract with the
litigation funder who has agreed to fund the litigation on behalf of the plaintiff
group. 48
3.31 An example of a representative action that was issued (and subsequently
resolved) by way of a closed class was Jarra Creek Central Packing Shed Pty Ltd v
Amcor Limited, 49 more commonly known as the Visy/Amcor class action.
3.32 The Visy/Amcor class action arose out of an allegation of price fixing and
market sharing in the cardboard packing industry. In that case the plaintiff group was
defined as persons who had purchased and paid more than $100 000 for corrugated
fibreboard packaging between 1 May 2000 and 1 May 2005. 50 This had the effect of
restricting the class of persons who could take part in the action to approximately
7,500 claimants. 51
3.33 Proceeding by way of a closed class will (perhaps always) make the
management of the claim less costly for solicitors or litigation funders because there
will be fewer plaintiffs with whom to deal and it is likely those claims will have a
higher claim value. In addition, closed classes may narrow the issues in dispute in
terms of matters that may need to be proved at trial in order to establish a common
interest. For example, in a hypothetical representative action on behalf of smokers
47. Mobil Oil Ausatralia Pty Ltd v the State of Victoria (2002) 211 CLR 1, [5], cited in Grave, Adams & Betts, ibid [5.400].
48. Ibid.
49. [2011] FCA 167.
50. See ‘Notice of Proposed Settlement – Amcor/Visy Class Action (Cardboard Box Cartel)’ in Grave D, Adams K & Betts J, Class Actions in
Australia (Sydney: Thomson Reuters, 2nd ed, 2012) [A7.700].
51. ‘Amcor, Visy Settle Cartel Class Action Out of Court’, The Australian, 8 March 2011 .
Chapter 3: Representative Proceedings in Other Australian Jurisdictions 29