Shareholder Activism : Consumerism, Class Actions and Litigation Funding

Recent years have seen a rapid rise in the number of class actions, particularly securities class actions, directed against Australian companies. This is the result of a combination of disparate factors, including, but not limited to, fundamental shifts in the classical model of the company in Anglo-Australian law, the rise of a proconsumer mentality in the orientation of the legal system, the advent of litigation funding and changes in Government policy regarding retirement incomes.This situation has come about so quickly that many companies and their advisers are still coming to grips with its implications.Every listed company is a potential target for a securities class action, but recent developments, such as the Sons of Gwalia litigation and the award of damages in the Jubilee Mines case, show the particular relevance of this topic for the resources sector.In this paper, we will plot the development of securities class actions, provide a detailed snapshot of the current state of play and look forward to possible future directions