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Class Action Case Study

11th January 2023


Group Cost Orders (GCOs) are a component of the class actions jurisprudence which is unique to Victoria. It is a tool to calculate legal costs that may be recovered by the solicitors of the applicant as a percentage of the amount of settlement that may be recovered. The court is empowered under s33ZDA of the Supreme Court Act 1986 (Vic) to determine the appropriate percentage on principles of fairness and proportionality.

In New South Wales, GCOs are yet to be incorporated. However, the laws account for alternative funding arrangements, one of which, is the Common Fund Order (CFO). Unlike the GCO, a CFO is the fee that a litigation funder would be entitled to recover as a percentage of the amount settle. In NSW, the court is empowered under s183 of the Civil Procedure Act 2005 (NSW) to make an order, provided the matter is settled between the parties.

The Suncorp class action was brought on behalf of the group members who allegedly suffered losses by way of reduced super balances after being charged excess fees. This class action was brought before Justice Stevenson in the Equity Division of the Supreme Court of NSW and was settled for an amount of $33 million of which, 56.54% (18.65 million) amounted to total costs and the remainder ($14.34 million) was available to the group members for distribution.

The litigation funder sought a commission of 25% of the settlement amount ($8.25 million). In determining the outcome of the funder’s application for a CFO, His Honour observed that the funder undertook significant risks by agreeing to fund the proceedings, and that the commission it sought was significantly lesser than its contractual entitlement under the funding agreement. These factors convinced His Honour of the reasonableness and proportionality of the proposed CFO and was therefore awarded in the funder’s favour.

Gerard Malouf and Partners has commenced class action proceedings against Hino Motors and Mercedes-Benz before the Supreme Court of Victoria. GMP Law does not have a funder and intends apply to the Court for GCOs for each of these class actions.

This document is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. We attempt to ensure that it is current but we do not guarantee its currency. You should seek legal or other professional advice before acting or relying on any of the content.

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