Current trends in Australian disputes 2024-25
31 January 2025

The Dispute Resolution team at Ashurst offer our take on the top 10 developments from 2024 and areas to watch in 2025.
Class action risk remains top of mind for corporate Australia, with activity across a broad range of claim types, including financial services, employment, shareholder, privacy, government, and consumer. In 2025, we may see more class actions arising out of regulatory issues, as well as greenwashing and other climate related claims.
Key factors affecting class action risk are the potentially significant returns to funders and plaintiff firms which create incentives to commence proceedings, and the ability to achieve these returns based on the approach taken at settlement of class actions. These factors have led to legal controversies in recent years, which may soon be resolved by the High Court.
First, the High Court has been asked to decide whether the courts have power to make common fund orders (CFOs). These orders allow a commission or "cut" to be paid to the class action funder (typically as a percentage and not limited to those group members who have signed a funding agreement). More recently, CFOs have been made in favour of solicitors, with similar commercial effect to a contingency fee. The outcome, if CFOs are not allowed, has the potential to cause some disruption in the market ― see our article here.
Secondly, the High Court has been asked whether the courts may order that notices be given to group members foreshadowing orders to "close" a class (i.e. extinguish the claims of those group members who have neither registered nor opted out). Such orders are often sought by parties to understand how many group members might seek to participate in any settlement, and the likely amount of the claim, before they engage in mediation (which is an important commercial driver). There is a divergence between Australian intermediate appellate courts on whether they have power to make these orders ― see our article here. The High Court will provide much awaited guidance on this issue.
Thirdly, the High Court has been asked to resolve issues arising from the unique statutory power in Victoria of the Court to make a "group costs order" (also like a contingency fee). The High Court has been asked whether the availability of a GCO order is relevant to an application to transfer a class action between courts, and whether the GCO would travel with the case if it is transferred. That case could potentially reduce the availability of GCOs through the Victorian regime for cases that otherwise belong elsewhere (and the number of claims commenced in that court).
In other class action developments, there has been a further judgment in a shareholder class action (see our article here) ― adding to the growing body of jurisprudence on the application of continuous disclosure laws. With another resounding win for the company, no shareholder class action in Australia to date has resulted in an award of damages for the class, demonstrating the difficulties in proving causation and loss. There are a couple of cases on appeal, so watch this space in 2025.
Australia continues to be a pro-arbitration jurisdiction, with lawyers with deep experience in key industry sectors, a judiciary second to none (both in speed of judgment and quality), and an innovative arbitration community. Arbitration will accordingly remain the forum of choice to resolve disputes in the construction, infrastructure, energy and resources sectors in Australia and internationally. Australia is also increasingly expected to be seen as an attractive destination for the recognition and enforcement of arbitral awards following the recognition and enforcement of several high-profile awards.
Recent decisions have confirmed the pro-arbitration approach taken by the Australian Courts. In one recent decision, the Supreme Court of New South Wales outlined the limited circumstances in which parties will be granted leave to appeal domestic arbitral awards under the uniform domestic arbitration legislation that apples in each State and Territory. The Supreme Court provided guidance in relation to the requirements for leave to appeal under the legislation and confirmed that "only most meritorious appeals" shall be granted leave. In doing so, the judge in the case cited a number of decisions of the High Court of England and Wales in her reasons and referred to the similar process for appeals of arbitral awards under the Arbitration Act 1996 (UK). The decision demonstrates that the Australian Courts are prepared to rely on relevant international decisions when deciding cases that concern arbitration law and practice.
Another recent decision of the High Court of Australia, Tesseract International Pty Ltd v Pascale Construction Pty Ltd, has clarified an area of uncertainty in Australia, and should be considered by parties entering into arbitration agreements or managing disputes. The High Court confirmed that proportionate liability laws form part of the "law of the land" in Australia and will apply in arbitrations unless they are excluded by the parties in their contract.
The majority considered that the proportionate liability laws are part of the substantive law of South Australia and that the arbitrator was required to apply them in the arbitration. Their relevant central features are to limit a concurrent wrongdoer's liability. It was no barrier to the applicability of these central features that other features (such as joinder of third party concurrent wrongdoers) could not apply in the arbitration.
The outcome of the High Court's decision is beneficial for prospective respondents in arbitrations that are concurrent wrongdoers for apportionable claims. Their liability will be capped according to the proportion of their responsibility for the loss and damage suffered by the injured claimant. However, this will mean that prospective claimants need to identify and pursue separate proceedings against third party concurrent wrongdoers.
For an overview of topics covered in the latest Australian Arbitration week – including the promotion of arbitration in the Pacific region and Australia as a seat for arbitration – and a summary of Ashurst's involvement across a number of events, see Ashurst's update here.
The protections offered by Australian Consumer Law continue to be tested in regulatory and class action proceedings. The High Court has provided recent guidance on the application of consumer law principles in the contexts of unsuitable vocational education and training courses and repairs to defective motor vehicles.
The Court in Productivity Partners Pty Ltd v ACCC decided that it was unconscionable to remove safeguards which had mitigated the risk of unsuitable students incurring significant debts for no benefit, even without evidence that the decision makers intended those risks to eventuate. Interestingly, Gordon and Edelman JJ applied the novel legal concept of "systems intentionality", whereby corporate liability may be established not only through the knowledge and intentions of natural persons associated with the company but also through its systems, being its policies, procedures or patterns of behaviour. The availability and scope of "systems intentionality" is likely to be subject to further judicial consideration.
The decision also provides specific guidance on the knowledge required for accessorial liability in relation to unconscionable conduct and misleading or deceptive conduct, which are prohibited by both the ACL and the ASIC Act. The Court clarified that it is not necessary for accessorial liability to know the legal characterisation of the conduct engaged in (for example, that it was unconscionable or misleading or deceptive).
Under the ACL acceptable quality guarantee, the measure of damages is the reduction in value of the goods at the time of supply to the consumer. The High Court has recently confirmed that damages for breach of the warranty are available when a repair becomes available after supply. Information that later comes to light about the state and condition of goods can nevertheless be taken into account. Where a subsequent repair is available, damages will still be available for the time between the supply and the repair, as well as the use of the goods in the meantime.
In 2024, the High Court clarified the circumstances in which damages for wasted expenditure can be recovered in contract. The Court unanimously upheld a claim for wasted expenditure of $3.7 million incurred in reliance on a contractual promise by a Council in Cessnock City Council v 123 259 932 Pty Ltd.
The majority considered that "reliance losses" are not a separate category from "expectation losses", which a claimant can elect between. The underlying principle is that contract damages put the claimant in the position they would have been in, had the contract been performed. Reliance losses may therefore be recovered only where the claimant would have recovered its expenditure had the contract been performed. Wasted expenditure can be recovered where it is impossible or difficult to assess what the claimant would have obtained if the contract had been performed. Wasted expenditure can be claimed not just where expenditure is incurred to perform or required under the contract, but where the expenditure was incurred in anticipation or reliance on the performance of the contract.
The legal onus remains on the claimant to prove that they would have recouped the expenditure had the contract been performed. However, a "facilitation principle" may assist the claimant to prove its loss where the respondent's breach results in uncertainty or difficulty of proof. The principle is flexible and will depend on the circumstances and the nature of the breach, but it cannot lightly be dismissed by evidence of a mere possibility of non-recoupment.
Wasted expenditure can be recovered even if it was incurred before the contract was entered into provided it is established that it was within the contemplation of the parties at the time of entering the contract, that this expenditure would be recouped in performance of the contract.
Australian businesses are currently contending with legislative developments in the areas of anti-bribery and anti-money laundering, and caselaw expounding aspects of the autonomous sanctions regime.
The Commonwealth Parliament has passed legislation to introduce a new corporate offence of failing to prevent foreign bribery. Similarly to the United Kingdom, companies will have a defence available if they can show that 'adequate procedures' existed to prevent the commission of foreign bribery by its 'associates', and the government has issued guidance on what constitutes 'adequate procedures'. However, unlike the United Kingdom, Australia does not have a deferred prosecution agreement (or DPA) regime, meaning that there can be no deferral of prosecution in exchange for demonstrated compliance with specified regulatory requirements.
Additionally, long foreshadowed legislation has been passed to bring Australia into line with international best practice standards to prevent money laundering. This means that the existing AML/CTF regime will be extended to professionals such as accountants, lawyers and real estate agents for the first time.
There have also been several instances of judicial guidance concerning the construction and operation of Australia's Autonomous Sanctions Act 2011 (Cth) and Regulations. In Tigers Realm Coal Limited v Commonwealth, for example, the Federal Court held that transportation of sanctioned goods by an Australian company (or its subsidiaries) within a third country may breach Australian sanctions laws. Sanctions will continue to be an important topic in the near term, with the expected release of the Government's report on the efficacy of Australia's sanctions regime in February 2025.
Cyber security remains a significant focus for Australian companies and regulators, particularly since Parliament passed new cybersecurity legislation and the first tranche of privacy reforms in late 2024. In addition, Australian courts have now clarified that cryptocurrencies such as Bitcoin satisfy the legal definition of property and that crypto asset based products can be regulated as financial products.
As several regulatory and class action proceedings continue to work their way through the courts, new legislation requires businesses to report ransom payments and facilitate sharing of information during cyber incidents. In addition, a new Cyber Incident Review Board will conduct no-fault reviews of significant incidents. Meanwhile, new privacy legislation has enhanced regulatory powers and penalties for privacy breaches and introduced a statutory tort for intentional or reckless serious invasion of privacy.
Several recent regulatory proceedings brought by ASIC such as the Block Earner and Finder Wallet matters have tested when the Australian financial services regime applies to crypto asset based products. ASIC is now seeking feedback on its proposed updated regulatory guidance.
Following the uptick in enforcement activity relating to compliance with design and distribution obligations (DDO) observed in recent years, 2024 saw the first Court-imposed monetary penalty for breaches of the DDO regime. Under this regime, issuers of financial products are required to consider and define their product's target market (a "target market determination" or TMD) in a way that meets the likely objectives, financial situation, and needs of retail clients in the intended target market, and distributors must take reasonable steps to ensure that distribution of the product is consistent with the TMD.
In ASIC v American Express Australia Limited, the Federal Court considered that it was appropriate to impose an $8 million penalty on AMEX for breaches of its obligations as a credit card issuer. The penalty followed AMEX admitting that it had contravened s 994C(4) of the Corporations Act in failing to review the TMD for its co-branded David Jones credit card when unusually high card cancellation rates meant that the existing TMD was no longer appropriate. The penalty illustrates ASIC's determination to protect consumers from the potential harm that may arise from them accessing financial products that are not targeted to their needs (even without the benefit of evidence quantifying the financial losses suffered by consumers as a result of the issuer contravention).
The American Express penalty decision follows the first judicial finding of contravention of the DDO regime in ASIC v Firstmac Limited. There, the Court found that Firstmac breached s 994E(3) of the Corporations Act by failing to take reasonable steps to ensure that its distribution conduct was consistent with the relevant TMD. Firstmac as distributor was sending to its term deposit clients a PDS for a product that was not capital guaranteed and had a longer investment time horizon, without a process to test whether the product could be suitable for them and in some cases where the clients had said it would not meet their requirements. This decision emphasises the importance of ensuring that reasonable steps to ensure distribution conduct is consistent with the TMD are taken before any distribution conduct occurs. Judgment has recently been given on the question of penalty, with a pecuniary penalty of $8 million imposed on Firstmac.
Consumer protection was also the theme of a significant piece of financial regulatory reform announced recently. The Scam Prevention Framework Bill, introduced to the Commonwealth Parliament in November last year, provides for the imposition of hefty fines (up to the greater of $50 million, three times the benefit received or 30% of revenue over the breach period) on banks, social media platforms and telecommunications companies who fail to take reasonable steps to prevent, detect, report, disrupt and respond to scams (or attempted scams). Significantly, the draft legislation requires a dedicated internal dispute resolution mechanism for customers who report scams, and recourse to an authorised external dispute resolution scheme (such as the Australian Financial Complaints Authority). The Bill has been referred to the Senate Standing Committee on Economics, and its further passage through the Parliament (with or without amendment) will be watched keenly in 2025.
Laws requiring many large Australian businesses and financial institutions to prepare annual sustainability reports containing mandatory climate-related disclosures have passed through the Commonwealth Parliament.
The new obligations will be phased in over a period of years depending on the size of the disclosing entity. Group 1 entities meeting two or more criteria ― being revenue of $500 million or more, year-end gross assets of $1 billion or more, or with 500 or more employees ― are required to report under the regime from 1 January 2025. Group 2 and 3 entities, with smaller revenues, assets, and head counts, will be impacted in subsequent years.
Both ASIC and APRA have signalled that industry approach to climate risk and sustainability remains a critical regulatory focal point. This is in the context of a recent regulatory focus on greenwashing, and heightened attention given to public disclosure of climate-related information by organisations. Even so, APRA's 2024 Climate Risk Self-Assessment Survey has revealed a marked decline of maturity in climate risk disclosure among banks, insurers and superannuation trustees.
With the combined impetus of law reform and regulatory scrutiny, we expect that many large organisations will be prompted to re-evaluate their climate risk governance frameworks in the near term, to meet both the new disclosure requirements, and to minimise the risk of potential future proceedings for misleading or deceptive conduct or for breach of directors duties (for example, under s 344 of the Corporations Act).
The courts have recently provided significant guidance on liability and penalties for businesses found to have engaged in greenwashing.
The Federal Court confirmed in ASIC v Vanguard Investments Ltd that the law on misleading or deceptive conduct applies to greenwashing where an investment fund makes false or misleading representations that potential investments would be screened to exclude securities with connections to certain industries, such as fossil fuels. Vanguard admitted that a significant proportion of securities were not, in fact, screened. Vanguard subsequently received a $12.9 million penalty.
ASIC's focus on greenwashing as an enforcement priority continued in its proceeding against Active Super, which was found to have made false or misleading representations to members (and potential members) by making "green" or ESG claims that it did not invest in certain sectors or activities (when it in fact did). In ASIC v LGSS Pty Ltd, the Federal Court largely upheld ASIC's claim, rejecting Active Super's argument than an ordinary or reasonable consumer would draw a distinction between investing directly in a company, and investing in it indirectly through a pooled fund.
Separately, Mercer Superannuation (Australia) Limited admitted similar allegations by ASIC (that it made false or misleading representations to investors regarding the ESG credentials of certain superannuation products), and jointly submitted with ASIC that it should pay a pecuniary penalty of $11.3 million. In ASIC v Mercer Superannuation (Australia) Limited, the Federal Court accepted the parties' joint submissions that Mercer's conduct was serious, but looked favourably on the remedial action it had taken after proceedings commenced in determining a just and appropriate penalty.
The High Court has clarified some important questions of tort law in 2024, concerning how liability is determined within supply chains.
In Mallonland Pty Ltd v Advanta Seeds Pty Ltd, the Court considered the scope of the duty of care to take reasonable steps to avoid pure economic loss. The Court rejected arguments that the duty should be expanded to cover circumstances where the end user of a product sustains pure economic loss by reason of negligence on the part of the product manufacturer. In this particular case, the existence of a carefully worded disclaimer was crucial to establishing that the producer had not assumed responsibility to the end user for the product being of a particular type or quality. However, the Court may also be signalling, more generally, that commercial parties seeking to "leapfrog up the contractual chain" by suing the producer of a product (rather than a distributor) will likely face an uphill battle in circumstances where there is no statutory recovery mechanism.
Meanwhile, in Pafburn Pty Ltd v The Owners SP84674, the High Court considered whether, in the context of construction work, a developer or head contractor could rely on the failure of subcontractors to take reasonable care to limit their liability under New South Wales's proportionate liability regime. The High Court rejected the developer's and head contractor's attempts to limit their liability in this way, holding that the duty under s 37(1) of the Design and Building Practitioners Act 2020 (NSW) could not be delegated. In effect, the developer and head contractor were vicariously liable for the whole of the construction work that they supervised, notwithstanding that they entrusted some aspects of that work to subcontractors.
These two cases underscore how parties at the apex of a supply chain can face very different legal outcomes depending on whether their common law rights and obligations are modified by a relevant statutory framework.
Authors: Ian Bolster, Partner; James Clarke, Partner; Luke Carbon, Partner; Matthew Blycha, Partner; Mark Bradley, Partner; Rani John, Partner; Peter Richard, Expertise Counsel; Daniel Pannett, Senior Associate; Sally-Anne Stewart, Senior Associate and Andrew Westcott, Expertise Counsel.
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.