Banking and financial services were the third biggest target for class action filings in 2021.
The government sector overtook banking and financial services as the main target for new class action filings in 2021, according to a report from commercial law firm, Allens.
While the global financial crisis and the banking royal commission saw the sector become the top target for more than a decade, banking and financial services ranked as the third biggest target in 2021 and accounted for 17 per cent of filings, down from 32 per cent in 2020.
“We're seeing class action risk change, including a distinct change in class action claim targets,” said Allens partner Jenny Campbell.
“The number of filings against the banking and financial sector is tailing off after a long period in the spotlight, with the government and healthcare sectors now facing the most claims in 2021.”
21 per cent of claims were filed against state and federal governments in regards to a range of issues including the treatment of Indigenous persons, environmental contamination, biosecurity, underpayment of federal employees, climate change and COVID-19 lockdowns.
Meanwhile, the healthcare sector accounted for 19 per cent of filings primarily related to a medical device and the underpayment of junior doctors.
Shareholder claims fell to their lowest levels in more than ten years and made up 15 per cent of filings compared to 23 per cent for consumer claims.
“Two words describe the litigation funding environment over the last couple of years – reform and uncertainty. The impact of this is seen in the marked decline in the level of shareholder claims and directly funded claims over the last two years” said Allens partner, Belinda Thompson.
“That uncertainty lingers with the recent class action funding bill before federal parliament, which we expect will not be resolved until after the election.”
Looking to the year ahead, Allens said that consumer claims would likely continue to dominate, with the enforcement priorities of regulators such as the Australian Securities and Investments Commission (ASIC) providing guidance on emerging issues.
These include poor product design and governance, mis-selling and failure to comply with conflict of interest requirements and disclosure obligations, as well as digital and other financial sector scams and the failure to adequately manage cyber risks.
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
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