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More cyber privacy class actions to come, report says
In the 2023 financial year, consumer class actions have dominated the market, with data breach class actions set to change the landscape moving forward, a new report has revealed.
Lauren Croft
King & Wood Mallesons (KWM) has released its annual report, The Review: Class Actions in Australia 2022/2023. The report considers judgments, events and developments across class actions between 1 July 2022 and 30 June 2023.
According to the 11th consecutive KWM report, the Federal Court has approved more than $1 billion in settlements despite scrutinising the proposed distribution of settlements, especially to plaintiff lawyers and funders.
Seven firms filed at least three new actions each in FY23, representing over 50 per cent of the total actions filed (27 out of 53): Maurice Blackburn (six), Phi Finney McDonald (four), Piper Alderman (four), Shine (four), Levitt Robinson (three), Quinn Emanuel (three), and Slater & Gordon (three).
Nineteen class actions were filed in the Victorian Supreme Court, representing a record 36 per cent of all new actions filed. Group costs orders were the main driver of filings in the Victorian Supreme Court; Victoria’s group costs order regime permits a plaintiff law firm to charge legal costs as a percentage of the amount recovered in the proceeding as an alternative to third-party litigation funding.
“The Victorian Supreme Court continues to receive the bulk of all new securities class actions: 64 per cent, or nine of 14 securities class actions (consistent with 62 per cent the year before),” the report noted.
“The Victorian registry of the Federal Court dropped to eight new actions (down from 22 in 2021–22) and no securities actions (down from three), while the NSW registry remained steady at 14 (12 in 2021–2022) with five securities actions (up from two).”
Thirty class action settlements were approved last year, exceeding $1 billion in settlement funds for the first time since 2019–2020. The $300 million settlement in the Ethicon class action concerning pelvic mesh implants is the largest settlement in a product liability class action in Australia to date.
“The report reveals that consumer class actions dominate the 2022–2023 filings and settlements, with more consumer actions filed in the review period than any other type of claim,” KWM partner Moira Saville said.
“The resurgence of the product liability class action is another theme – with some very large settlements this year.”
The report also revealed an influx of data-breach-related filings, including consumer claims seeking damages resulting from alleged privacy breaches, KWM partner Peta Stevenson said.
“The report also finds that 2022–2023 has seen an influx of class action filings resulting from data breaches. This includes consumer claims seeking damages resulting from alleged privacy breaches, and a securities claim alleging breach of continuous obligations in relation to cyber attacks,” she said.
Cyber class actions are also predicted to continue to grow, according to the report.
“As cyber attacks become more frequent, and the number of affected people grows, privacy cyber class actions may be increasingly attractive to plaintiff law firms and their funders, despite their novel nature. It is estimated that 11 million people were affected by the Optus cyber attack, and 9.7 million with respect to Medibank,” the report stated.
“If successful, while individual damages awards may be modest, plaintiff lawyers and their funders stand to gain substantial sums of money. Therefore, the cost-benefit analysis of pursuing these claims, despite their challenges, appears to have shifted. We expect to see an increase in the number of privacy cyber class actions filed.”
Looking ahead, a number of hearings have been set down, including the Apple App Store in March 2024 and several others throughout June and July. Further, at least another eight settlements are awaiting court approval. Together, these represent over $500 million in potential settlement funds.
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
