Class actions have become a prominent feature of the Australian legal landscape, significantly reshaping corporate accountability and consumer protection. Once considered primarily an American phenomenon, Australia is now one of the most active jurisdictions globally for class action litigation, second only to the United States.
For Australian businesses, understanding current trends, landmark rulings, and effective risk mitigation strategies has never been more critical.
In 2025, several key developments continue to shape this landscape. This article explores these trends, examines recent landmark cases involving major corporations such as Toyota, Ford, Apple, and Google, and provides practical guidance for businesses seeking to minimise their exposure to class action risks.
Current Trends in Australian Class Actions
Increasing Regulatory Scrutiny and Broader Claim Types
In recent years, class actions in Australia have expanded well beyond traditional shareholder claims. There has been a significant rise in consumer rights cases, employment disputes, privacy breaches, especially data breaches, and ESG-related claims, with “greenwashing” allegations gaining particular attention.
Several factors contribute to this trend:
- Regulatory Focus: Australian regulators such as ASIC and ACCC have intensified enforcement activities around consumer protection, financial services compliance, and environmental claims. Class actions frequently follow regulatory investigations or enforcement actions.
- Litigation Funding: The proliferation of third-party litigation funders has lowered barriers to initiating class actions. Funders actively seek opportunities with high potential returns.
- Public Awareness: Increased media coverage and public awareness of consumer rights have led to greater willingness among individuals to participate in group litigation.
Jurisdictional Shifts Due to High Court Decisions
Two significant cases currently before Australia’s High Court Lendlease (regarding class closure orders) and Blue Sky (concerning settlement common fund orders) are poised to reshape where and how class actions are filed. Depending on the rulings:
- If the High Court limits the powers of the Federal Court or NSW Supreme Court, we could see more cases shift to the Supreme Court of Victoria, known for its plaintiff-friendly procedures.
- If these powers are upheld, there may be a resurgence of activity within the Federal jurisdiction.
These decisions highlight the uncertainty businesses face when it comes to the procedural aspects of class actions.
Recent Landmark Class Action Rulings
Several recent high-profile cases have highlighted the significant financial stakes of class actions and their impact on corporate accountability:
Toyota Diesel Particulate Filter (DPF) Case (2024–2025)
The Toyota DPF class action centred around defective diesel particulate filters in popular vehicles, including Hilux and Prado models. The High Court upheld findings that Toyota breached Australian Consumer Law by supplying vehicles not of acceptable quality and engaging in misleading conduct regarding vehicle performance. Key outcomes included:
- Confirmation that consumers were entitled to compensation for reduced vehicle value.
- Establishment of precedent reinforcing manufacturers’ accountability for product defects under consumer protection laws.
This ruling highlights the importance for businesses, particularly manufacturers, to rigorously test products before market release and transparently communicate any known issues promptly.
Apple & Google App Store Class Actions (2024)
In landmark tech-related litigation, Apple and Google faced allegations of anti-competitive practices within their app stores. Plaintiffs argued that these restrictive practices led to inflated prices for consumers. While the cases are still ongoing, early rulings have clarified key issues around market dominance and consumer harm, potentially opening the door for greater scrutiny of digital marketplaces in Australia.
Ford Transmission Defect Case (2023–2024)
Ford faced a major class action over defective transmissions in thousands of vehicles sold across Australia. The resulting settlement led to substantial compensation for affected consumers. This case highlighted corporate responsibilities under Australian Consumer Law, particularly regarding product quality guarantees and the obligation to communicate known defects transparently to customers.
Implications for Consumer Protection & Corporate Accountability
The rise of class actions has had a profound impact on corporate behaviour in Australia:
- Stronger Consumer Protection: Class actions give consumers a collective way to seek redress for corporate misconduct or negligence, pushing businesses to better comply with consumer protection standards.
- Increased Corporate Accountability: Companies now face greater scrutiny in areas like transparency, product safety, marketing accuracy (“greenwashing”), data privacy, and employment conditions, all of which are increasingly targeted by plaintiff law firms.
- Financial and Reputational Risks: In addition to hefty financial penalties or settlements, class actions carry significant reputational risks that can erode customer trust over time.
Strategies for Risk Mitigation & Proactive Compliance
Given these developments, Australian businesses must adopt proactive strategies, such as:
1. Strengthen Compliance Frameworks
Implementing strong internal compliance programs that align with regulatory standards, especially in areas like consumer law (product safety and quality), data privacy and security (to reduce cyber breach risks), accurate marketing claims (to avoid greenwashing), and employment law compliance.
2. Early Identification & Response
Establishing clear internal reporting channels enabling early identification of potential issues before they escalate into litigation threats or regulatory investigations. Rapid response teams should swiftly address emerging problems transparently with regulators/customers where appropriate.
3. Regular Training & Awareness
Ensuring regular training sessions across management levels emphasising evolving regulatory expectations surrounding ESG disclosures/claims accuracy; product safety responsibilities; data privacy obligations; employment practices compliance. These areas are frequently targeted by litigants today.
4. Comprehensive Insurance Coverage
Review existing insurance policies regularly ensuring adequate coverage against potential liabilities arising from class action exposure, including directors’ liability insurance protecting senior executives personally implicated during proceedings.
5. Engage Expert Legal Advice Early
When a class action is threatened or filed, it’s crucial to engage expert legal counsel early to build a strong defence and minimise risks. Class actions are complex, involving intricate procedural rules, regulatory frameworks, and strategic litigation management. Experienced commercial litigation lawyers can help businesses assess the merits of the claim, identify potential liabilities, and determine the best course of action.
Legal experts can also assist in securing the right witnesses and technical experts to support the defence. In class actions, expert evidence often plays a key role in determining both liability and damages. Engaging experts early allows them to prepare thorough reports and offer credible testimony. Plus, working through legal counsel ensures communications are protected by legal professional privilege, keeping sensitive information safe.
Conclusion: Preparing for the Class Action Era in Australia
The rise of class actions in Australia reflects a growing focus on consumer protection, corporate accountability, and regulatory enforcement. Landmark cases involving companies like Toyota, Ford, Apple, and Google highlight the financial and reputational risks businesses face when confronting group litigation. As class actions expand into areas such as privacy breaches, ESG claims, and employment disputes, Australian companies must brace for a more litigious environment.
Proactive compliance is the best defence against class actions. By integrating risk mitigation strategies into daily operations, strengthening compliance frameworks, conducting regular audits, ensuring transparency, and engaging expert legal counsel early, businesses can reduce exposure to costly litigation. Additionally, fostering a culture of accountability and ethical conduct not only minimises risks but also strengthens trust with consumers and stakeholders.
Looking ahead to 2025 and beyond, Australian businesses must see class actions as an ongoing risk that requires strategic management. Companies that invest in preventive measures today will be better equipped to navigate future challenges while protecting their reputation and operational integrity in an increasingly regulated landscape.
