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Precedent (Australian Lawyers Alliance) |
BENEFITS OF GROUP PROCEEDINGS FOLLOWING A DISASTER
THE FALLS FESTIVAL CASE
By Tim Tobin SC
Group proceedings are often thought to be the province of the large firms. This article explores a group proceeding that arose out of the crush of many patrons at the Falls Festival in Victoria in 2016 and indicates that firms specialising in personal injuries are often best placed to take on certain types of group proceedings, such as those that emerge following a disaster.
THE FALLS FESTIVAL DISASTER
Background
For over two decades the Falls Festival has hosted popular Australian and international acts at four locations. In December 2016, approximately 20,000 young music lovers attended the Lorne, Victoria location. This site, a paddock, is a large open area, with the main Valley Stage at the bottom of a natural amphitheatre and the Grand Theatre tent on top of the hill overlooking the main stage.
The Grand Theatre is a marquee, approximately 45m wide and 60m long, with its perimeter sealed by marquee flaps. In 2016, these flaps were reinforced by steel barricades, and the only unbarricaded areas were the two exits facing the Valley Stage. The exits were gravel-based, starting on a slope from within the tent and descending quite steeply. Their combined width was 6.65m – the equivalent of barely eight standard single-width doors.
In previous years it had been possible to exit the Grand Theatre tent along the whole of its perimeter, under the tent flaps. In 2016, no explanation was provided at any time about the presence of the new steel barricades.
The Grand Theatre was licensed to hold 6,000 people. Although there was no count on the night in question, 30 December, it was estimated that the tent contained 7,500 patrons, who mainly congregated near the area where the band ‘DMA’ was playing.
The highly popular ‘London Grammar’ band was scheduled to start performing on the Valley Stage immediately after DMA’s set. As the crowd left the Grand Theatre through the narrow exit space, dozens of people fell, and those at the front of the exiting crowd were crushed. It was dark and London Grammar’s music was loud, covering the many screams of the victims. Most of the people exiting were therefore unaware of the crush ahead and continued pushing forward.
More than 100 young people were crushed, some covered by five or six bodies. More than 30 people lost consciousness and there were many broken bones. Major lacerations were suffered when people were crushed into the gravel surface, resulting in scarring. Though many of the injuries were severe at the time, some healed quickly because of the youth of the victims. Many suffered permanent psychiatric injury flowing from their exposure to the traumatic event.
Some patrons, many with medical qualifications, engaged in the rescue and resuscitation of the injured people; one victim was clinically dead at the time. Victims were first taken to a medical tent at the festival. This was understaffed and under-resourced; for example, there were insufficient dressings available for the wounds suffered. From this medical tent many were evacuated to hospitals in Lorne, Geelong and Melbourne.
Many families did not know what had happened to their children and siblings until after they reached hospital, despite the high media coverage of the event. Ironically, although the festival was sponsored by a telecommunications company, the phone service at the venue was very poor.
The group proceeding
In response to the incident, both the defendant and the plaintiff engaged leading experts from around Australia, as well as overseas experts who had been involved in the assessment of the Hillsborough soccer disaster in the UK and other similar events. A group proceeding or class action was issued by Maddens Lawyers, Warrnambool in early 2017.
The ability to undertake a group proceeding for an event of this nature was ideal for the victims, since if they had been acting alone it would have been very difficult to take essential actions, including:
• obtaining the necessary expert opinions to show the defendant’s negligence, particularly as WorkSafe Victoria was not present to take any action, having itself approved the structure of the tent and its exits before the event;
• properly instructing solicitors, particularly as the injured were spread across all of the southern states of Australia and most were very far from Lorne. Many had awoken from loss of consciousness far from the incident site and were then taken to hospital, so they did not have a firm grasp on what had actually occurred, and had little or no contact with other victims before they returned home to various distant locations; and
• fully explaining their injuries. It became evident in taking instructions from the multiple young people who were injured that there were a number of psychological reactions commonly experienced by many of them following the incident. These included great discomfort when experiencing any pressure on the chest, whether from wearing a wetsuit, a seatbelt or a bra, or from being in a sexual position; and a sense of vulnerability, unwillingness or discomfort when travelling on trams or trains or going to hotels, parties or music events. These issues were not always complained of at first, as many of the young victims expressed concern that by having such a reaction they would be perceived as weak.
In the final joint reports provided in separate conclaves by the two English and two Australian experts who were consulted, clear negligence and breach of duties were established. There were multiple mediations but it was just prior to the trial, fixed for November 2018, that the defendant – the festival organisers – admitted negligence. The group proceeding was settled, with 77 members recovering some damages; 45 group members received damages that included pain and suffering damages.
The total sum received in that settlement was distributed to the victims in accordance with a settlement distribution of $6,975,000 approved by the Supreme Court.[1] The settlement meant that many did not have to go through a medical panel process to establish significant injury, as their prospects of achieving this status was reflected in the level of their settlement.
REQUIREMENTS FOR GROUP PROCEEDINGS
Prior to the amendments to the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) in 1992, where persons with common interest in a proceeding wished to litigate their claims it was necessary to obtain some agreement between a defendant and a group of plaintiffs that one proceeding would go ahead as a representative proceeding. If no agreement could be reached, individual writs would be issued by each plaintiff. Since the young people involved in the Falls Festival disaster lived across a vast area, and many had travelled overseas during the months after the incident, this would have been impossible.
In Guglielmin v Trescowthick (No. 2),[2] Mansfield J, commenting on the introduction of Part IV of the Federal Court of Australia Act 1976 (Cth), said:
‘The purpose of the ... Act, as explained in the Second Reading Speech, is twofold. Firstly, Pt IVA is designed to provide a real remedy in situations where many people are affected and the total amount in issue is significant, but each person’s loss is small and not economically viable to recover in individual actions. The second purpose of the ... Act is to deal with the situation where the damages sought by each claimant are large enough to justify individual actions and where there are a large number of claimants (for instance shareholders or investors). Rather than having a large number of similar actions, the mechanism of representative proceedings was designed to allow for a more efficient process.’[3]
In 2000, Victoria introduced a similar scheme to the Federal Court by amending the Supreme Court Act 1986 (Vic) (Supreme Court Act). Most states now have the capacity to permit group proceedings, and although they follow the lead of the federal Act there is some variation between states. In Victoria (as in most states), to bring a group proceeding it is necessary to have seven or more persons who have a claim against the same person[4] that:
• is in respect of or arises out of ‘the same, similar or related circumstances’;[5] and
• gives ‘rise to a substantial common question of law or fact’.[6]
When issuing a group proceeding it is not necessary to have seven or more persons who are clients in the issue, but practitioners must be able to show that there are seven or more persons affected by the same circumstance.[7] At times this has meant that there can be more than one group proceeding issued, and the court must determine which group proceeding has control and/or priority.
The lead plaintiff has the same status as any other plaintiff to a proceeding with regard to liability for, and entitlement to the costs of, a proceeding. However, as a plaintiff is the lead plaintiff for a group proceeding, by reason of the regime set out in Part 4A of the Supreme Court Act the proceeding is subject to a high level of supervision by the court to ensure that things are done in the interest of the group.
Within a group proceeding there are frequently sub-groups of people who may have different issues to the common issues pertaining to the plaintiff and most group members. This was the case in Matthews v SPI & Ors,[8] a Black Saturday bushfire claim. Here there were sub-groups relating to the different times the Country Fire Authority and/or Victoria Police should have provided warnings to various locations within the fire zone.
The lead plaintiff does not need to have any special status within the group, such as the largest damages, in order to be the lead. But this plaintiff should be carefully chosen, taking into account capacity to provide instructions, to withstand the stress of litigation including an exposure to costs, and to deal with the publicity that may be associated with the litigation. In the Falls Festival group proceeding the lead plaintiff was Ms Burke, who was a young student. Ms Burke was chosen as lead plaintiff as it was initially thought that she had sustained a significant injury by reason of nerve damage to her arm. Fortunately, her injury resolved over the first year, and she was able to travel to and live in Canada for an extended period of time subsequent to the issue of proceedings and to continue to provide instruction as lead plaintiff. The resolution of her physical injury did not in any way make her an inappropriate lead plaintiff.
In most jurisdictions, persons are included in the group proceeding at the time it is issued and are bound by the result of that proceeding unless they opt out of it. Practitioners must therefore be vigilant when acting on behalf of a person affected by a major tort, to ensure that their client’s rights are not subsumed in the group proceeding. If their rights are subsumed, a practitioner will need to advise them of the appropriate course – be it to remain or to opt out.
Hearings
Once commenced, a group proceeding is subject to various directions by the court. These directions will normally include:
• an obligation to advertise to ensure that all potential group members are aware of the proceeding;
• a requirement that persons be given an opportunity to opt out of the proceeding; and
• frequently, because of the nature of the proceeding, directions as to the parties obtaining and exchanging expert evidence, both as to liability and damages, and also regarding directions for conclaves of those experts.
When a group proceeding is heard, usually only the lead plaintiff’s damages are assessed in full. If, however, there are common questions on the assessment of damages of a particular nature, the court can give a ruling on those questions. For example, the court can give a ruling on the value of, say, fencing loss in a fire area, or the allowance, if any, to be made for damages replaced by gratuitous services to assist the final resolution of all claims. In this regard it has consistently been ruled that gratuitous assistance, be it from public funds or groups such as BlazeAid,[9] is not to be deducted as it has been provided to assist the victim, not the tortfeasor.
INVOLVEMENT OF PERSONAL INJURY FIRMS
While many group proceedings are conducted by the major firms, particularly in relation to share transactions and the like, there is no reason why most firms with a personal injury practice cannot conduct group proceedings. For example, Maddens Lawyers of Warrnambool, which undertook the Falls Festival claim, has undertaken many group proceedings, notably over the last ten years, and particularly in relation to bushfires.
Save for increased supervision by the court in relation to the various steps in a group proceeding, these types of proceedings do not differ from common law proceedings with a single plaintiff. Liability must be established and damages have to be proved. The limited technical requirements of such claims are easily attended to by barristers who are experienced in this field of litigation.
In personal injury actions there is the need to obtain far more substantial instruction from individuals than, say, in shareholder class actions, where nothing more than the number of shares owned may need to be known. This work is, from my experience, best undertaken by firms who have a personal injury practice: I have noted that, where insurers have opted out group members such as in the St Patrick’s Day fires and started their own recoveries, very few personal injury claims are pursued by firms acting for those whom the insurer has opted out.
All the information necessary for assessing individuals’ damage may in some cases not need to be acquired prior to the determination of liability, although usually it is necessary to acquire such information for at least a sample to enable informed mediations to occur.
LITIGATION FUNDERS
An industry of funders of group proceedings has developed. These funders provide a level of funding to solicitors to bring actions, for a return based on the outcome of the litigation. The nature of the funding varies from claim to claim and is usually related only to anticipated disbursements or expert witness expenses and damages assessments, rather than to legal fees. Where there is a funder, the court may make an order exposing the funder of the group proceeding to an adverse costs order. At the time of writing, there is a strong push by the Commonwealth Attorney-General to limit the role of group proceeding funders by ensuring that costs are proportionate to the damages recovered.[10]
As mentioned above, the lead plaintiff has no special position in the litigation, although in most cases at the conclusion of the litigation the court allows a modest payment to be made to the plaintiff from the settlement sum in recognition of their degree of involvement in the proceedings. This payment is usually in the range of $20,000 to $40,000. The overall common costs of the proceeding are usually ordered to be shared on a pro rata basis between group members.
INSURER ACTION FOLLOWING DISASTERS
Over the last eight years in particular, insurers have shown increased enthusiasm for commencing parasitic actions. Traditionally, insurers in group proceedings such as those for the Ash Wednesday fires in the 1980s helped to instruct the lawyers recovering damages on behalf of all victims, including their clients, and assisted in providing access to insurance recovery and the like to those solicitors. This type of cooperation continued through to the 2020 Black Saturday fires.
Since that time, however, certain insurers, rather than staying within the group, have opted out their insured clients after a group action has started, and issued proceedings. Some insurance policies have a particular clause that enables the insured to opt out their insurer, even though the insured aspect of the claim may be minimal compared to the uninsured aspect of the claim, including the plaintiff’s personal injury; this applies, for example, in fire cases. This has been a regretful development by insurers and certainly has not benefited group members. There is no case that I am aware of where group members’ recovery for non-insured losses has been equal to or better than recovery when the action was undertaken by the insurer for the recovery of their uninsured losses as well as the insured losses. Further, I have also observed that where insurers act on behalf of the insured they seldom recognise the personal injury entitlements of their insured.
Traditionally, where there was cooperation between the insurer and the client, an agreement was frequently reached that the recovery would be on a pro rata basis, which was beneficial to the insurers as compared to the provisions of s67 of the Insurance Contracts Act 1984 (Cth). Various insurers, particularly those that have acted in a parasitic fashion over the last ten years, are now seeking to contract out of these provisions. In this edition of Precedent, Andrew Fraatz observes the way the relative priorities of victim and insurer are managed (pp. xx to xx).
SUMMARY
The Falls Festival case demonstrates that group actions are an ideal way to bring claims in respect of multiple personal injuries arising out of a single event. Further, as the success of the case demonstrates, such proceedings are well within the province of firms that conduct personal injury litigation.
Tim Tobin SC is a member of the Victorian Bar who has acted in many major bushfire claims and inquiries, including the Sir Esler Barber inquiry in 1977, the Royal Commission into National Natural Disaster Arrangements, the Ash Wednesday and Black Saturday fires claims, and other group proceedings involving events such as floods and COVID-19 transmission.
[1] Burke v Ash Sounds Pty Ltd (No. 4) [2020] VSC 581.
[2] [2005] FCA 138; 220 ALR 515.
[3] Ibid, [9].
[4] Supreme Court Act 1986 (Vic), s33C(1)(a).
[5] Ibid, s33C(1)(b).
[6] Ibid, s33C(1)(c).
[7] Ibid, s33C(1)(a).
[9] See <https://blazeaid.com.au/>.
<https://treasury.gov.au/sites/default/files/2021-06/176658_consultation_paper.pdf>.
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URL: http://www.austlii.edu.au/au/journals/PrecedentAULA/2021/43.html