In the recent decision of Wigmans v AMP Limited [2021] HCA 7 (Wigmans), a majority of the High Court held that, in circumstances where competing class actions are brought in respect of the same cause of action, courts are empowered to choose which proceeding is in the best interests of group members and permanently stay the others, so long as the interests of defendants are not affected.

In a joint judgment, Gageler, Gordon & Edelman JJ endorsed the decision of lower courts that a multifactorial approach was necessary in deciding which competing action would be allowed to continue whilst others would be stayed. The Court identified a non-exhaustive list of factors that might be taken into account, including which proceeding was commenced first in time, but ultimately left the specifics of the Court's enquiry to be determined on a case-by-case basis.

The majority's judgment is likely to affect future class action proceedings in numerous respects, including:

• The proliferation of bespoke solutions by judges to selecting which competing class action moves forward, or otherwise resolving disputes as to how these competitions may be resolved. This possibility follows from the majority's statement that there is no 'one size fits all' approach to resolving issues of multiplicity, which instead may be addressed by a variety of means. Defendants to proceedings should, therefore, be prepared to respond to a diversity of judicial approaches.
• An increase in instances where multiple class action proceedings are commenced in respect of the same cause of action. With confirmation from the High Court that there is no presumption that the first-in-time proceeding is to move forward, plaintiff law firms may be more willing to 'put their hat in the ring' to see if their proposal to run a proceeding is preferred. As a result, it should not be assumed that the first class action proceeding commenced, or the lawyers acting in the first-in-time proceeding, will be the same as those ultimately run at trial.
• Enhanced competition between plaintiff law firms and third-party litigation funders to present funding models that are in the best interests of group members, in an effort to win over trial judges. This competition, in turn, may drive down litigation funding fees or commissions, enhancing returns to group members out of any settlement or favourable judgment.

The underlying facts of Wigmans, the decisions below, and the majority and dissenting justices' reasons are considered in more detail below.

Underlying facts of Wigmans v AMP Limited

Between 9 May and 7 June 2018, five shareholder class actions were commenced against AMP. Although the five proceedings were not identical, they shared many overlapping features.

With one exception, representative plaintiffs in each separate proceeding sought orders that the other competing proceedings be barred from continuing. AMP considered that only one proceeding should move forward, although it took no position as to which should continue.

The essential question for determination was, therefore, which proceeding should move forward and why.

First Instance and Appeal

At first instance, Ward CJ in Eq concluded that the representative proceeding commenced by Komlotex Pty Ltd (represented by Maurice Blackburn) should proceed. Her Honour reached this view by reference to several factors (described as a 'multifactorial approach'), including: (i) the funding proposals; (ii) proposals for security; (iii) nature of the causes of action; (iv) size of the classes; (v) extent of any bookbuild; (vi) legal practitioners' experience; (vii) progress of the proceedings; and (viii) the conduct of the representative plaintiffs. Ward CJ in Eq gave the most weight to the first factor, finding that Maurice Blackburn's 'no win, no fee' funding model was likely to provide the best return to group members.

Relevantly, her Honour rejected a competing class action brought by Marion A Wigmans (represented by Quinn Emmanuel). Her Honour considered that the proposed funding model of the Wigmans proceeding, which was supported by a third-party litigation funder, compared less favourably with that of the Komlotex proceeding. The fact that Ms Wigmans' proceeding was commenced prior to the four other proceedings was given no weight.
Furthermore, Ward CJ in Eq concluded that the commencement of similar class actions later in time was not an abuse of process, because none of the competing lead plaintiffs, like Komlotex, could be said to be parties to the Wigmans proceeding prior to the opt-out process. Ms Wigmans' argument that the later proceedings should not be allowed to continue was therefore rejected, and her Honour made orders in accordance with Komlotex's application that the other competing proceedings be permanently stayed, including Ms Wigmans'.

Ms Wigmans subsequently appealed to the New South Wales Court of Appeal. However, the Court of Appeal unanimously affirmed the primary judge's conclusion, holding that her Honour's multifactorial approach was appropriate, and there had been no abuse of process.

Majority Decision

Before the High Court, Ms Wigmans argued that the Court's power to stay competing class actions is confined by a presumption that the first-in-time should prevail. It followed from Ms Wigmans' argument that by applying the multifactorial approach, the primary judge erroneously departed from the first-in-time presumption and had regard to irrelevant considerations in favouring the Komlotex proceeding. Ms Wigmans relied on the Civil Procedure Act 2005 (NSW) (Act) and the common law as distinct sources of authority to support this asserted presumption.

However, the Court rejected Ms Wigmans' assertion by reference to the Act and the common law. Section 67 of the Act states that the Supreme Court "may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day". The majority observed that, while this power is not unconstrained, the text provides no indication that the power is presumed to be exercised in favour of proceedings that are first in time. The majority went on to say that no provision of the class actions regime under Part 10 of the Act expressly or impliedly diminishes the broad power to stay proceedings under section 67, or relevantly prevents the filing of a second representative proceeding. To the contrary, the Act expressly permits 'one or more' group members to commence proceedings in relation to the same cause of action, and cannot be said to operate on the assumption that the first proceeding to be commenced must prevail.

Likewise, the majority did not agree with Ms Wigmans' characterisation of the relevant authorities. Ms Wigmans had argued that at common law (as opposed to under the Act), it is prima facie vexatious and oppressive to commence duplicative proceedings, meaning that the Komlotex class action should not be allowed to proceed. While Ms Wigmans pointed to several cases in support of her submission, the majority held that "those statements of principle do not suggest there is a first-in-time rule or presumption…". Accordingly, the majority rejected Ms Wigmans' argument that a common law presumption that the first-in-time proceeding should prevail confines the Court's power to stay competing class actions.

Having dismissed Ms Wigmans' asserted presumption on both footings, the majority made several comments in respect of the multifactorial approach:

• there is no 'one size fits all' approach, and multiplicity may be addressed by a variety of means;
• while a first-in-time rule has never been favoured, it remains a relevant consideration;
• the action or inaction of group members, and parties to the proceedings' approach to timely interlocutory activities, are likely to be relevant;
• litigation funding arrangements are not a mandatory consideration, but they are not irrelevant;
• a court may consider the likely success in the proceedings or the quantum of recovery; and
• relevant factors cannot be exhaustively listed, and will vary from case to case.

This elaboration by the majority signifies an endorsement of the multifactorial approach adopted by the lower courts in assessing issues of multiplicity. Importantly, the Court's guidance removes any doubt as to the correct assessment to be undertaken by lower courts when faced with multiple competing class actions.

Dissent

In dissent, Kiefel CJ and Keane J described the process endorsed by the majority as "alien [in] quality", with an assessment directed to selecting a proceeding in the best interests of group members having the consequence that, in their view, "the worst possible outcome for the defendant would be achieved by the Court's preferred sponsor".

Their Honours determined that the Act and the Supreme Court's inherent power did not extend to determining "the competing claims of financier and lawyers to sponsorship of the proceedings on behalf of those on the plaintiffs' side of the record". The dissenting justices particularly emphasised that the focus of the relevant sections of the Act was directed to ensuring the just, quick and cheap resolution of the proceeding between the parties, as opposed to the choice of which sponsors should have exclusive carriage of the proceeding on behalf of the plaintiffs.

Kiefel CJ and Keane J also considered it "distinctly odd", in the context of the Act's encouragement of quick resolutions to proceedings, "to regard the winning of the 'race to the courthouse' as a negative factor in a case where no specific criticism can be made of the proceedings that have actually been brought by the winner". Their Honours therefore dismissed any concerns of a race to the court room by prospective lead applicants as an "irrelevant distraction".

Accordingly, Kiefel CJ and Keane J held in dissent that Ms Wigmans' proceeding should be permitted to move forward, whereas the remaining proceedings, including Komlotex's, should be permanently stayed.

Conclusion

For the reasons outlined above, Wigmans is an important decision in the field of class actions, as it settles the previously contentious question of how courts and practitioners should approach issues of multiplicity in completing class actions.