The Rise of Class Actions in Australia
Australia has seen a sharp and unmistakable surge in class actions over the past decade, to the point where they are no longer a niche legal procedure but a defining feature of modern civil litigation. What once operated quietly in the background of the court system has evolved into one of the most powerful tools for resolving large-scale disputes involving corporations, governments, and major financial institutions. Today, class actions are not just shaping how disputes are resolved—they are reshaping how accountability itself is enforced across Australia’s legal and commercial landscape.
In the 2024–25 period, 79 new class actions were filed, the highest number ever recorded. Courts have also approved billions of dollars in settlements. This trend has continued since the introduction of class actions in Australia in the early 1990s, with their use steadily increasing in both volume and complexity.
Several key factors explain this rise. First, the growth of litigation funding has played a crucial role. Third-party funders cover the costs of claims in exchange for a share of any settlement. This reduces financial barriers for plaintiffs and makes it possible to pursue large, complex cases that might otherwise not be feasible.
Second, the scope of class actions has expanded significantly. Early cases primarily involved shareholder or financial market disputes. Now, class actions include claims related to consumer protection, employment underpayment, data breaches, environmental issues, and product liability. This growth reflects changes in regulation and increased awareness of collective legal rights.
Third, Australia’s opt-out system simplifies bringing class actions on a large scale. Once a class is certified, individuals are automatically included unless they choose to remove themselves. This allows proceedings to efficiently involve large groups of affected people.
Fourth, heightened corporate regulation and scrutiny, especially after significant regulatory investigations and royal commissions, has led to a rise in follow-on class actions. These events often provide the factual basis for group litigation.
The growth of class actions has both advantages and disadvantages. On the positive side, they improve access to justice. They allow individuals with smaller claims to seek compensation together. They also promote accountability among corporations and can deter misconduct.
However, concerns remain. Critics argue that litigation funding may distort incentives, prioritizing financial gains over legal merit. Others highlight the high costs to corporations and note that most cases settle before going to trial. This means outcomes can be influenced by risk rather than judicial decisions. There are also worries about the broader economic impact and sustainability of the system as filings continue to rise.
Overall, the rise of class actions in Australia shows a legal system that is becoming more accessible and commercially advanced. At the same time, it raises important questions about balance—between efficiency and fairness, settlement and trial, as well as private enforcement versus public adjudication.
Disclaimer: This publication contains comments of a general and introductory nature only and is provided as an information service. It is not intended to be relied upon as, nor is it a substitute for specific professional legal advice. You should always speak to us and obtain legal advice before taking any action relating to matters raised in this publication.
