Event and Time
Event Description
On 28 November 2023, a summons was filed by the plaintiff seeking orders under section 33ZDA of the Supreme Court Act 1986 (Vic) for a Group Costs Order (GCO) against the defendant, James Hardie. The plaintiff is claiming damages for alleged misleading or deceptive conduct and breaches of continuous disclosure obligations regarding the value of James Hardie’s shares, purportedly affecting group-member investors adversely.
Application and Claims
The application is supported by affidavits from key individuals and aims to achieve a structured financial arrangement where the legal costs for the plaintiff and group members are calculated as a fixed percentage of any recovery (27.5%). This arrangement is designed to promote access to justice while minimizing financial risks associated with prolonged litigation.
Judicial Decisions
The court determined that a GCO at the proposed rate was appropriate to ensure justice was done, considering factors such as legal cost predictability, group member protection, and the overall financial viability of the proceedings under this arrangement.
Dispute Points and Legal Basis
Dispute Points
- Plaintiff's Claims: The plaintiff asserts that James Hardie engaged in misleading conduct, affecting the share value and causing financial losses to group members.
- Defendant's Position: The defendant did not oppose the GCO but raised questions about the proposed cost percentage (27.5%) in light of standard rates in similar cases, as well as the capabilities of Echo Law to fulfill its obligations.
- Third-Party Funder's Role: The financing arrangement is crucial since Echo Law is a new firm and lacks the capital to undertake such a large-scale litigation independently.
Ruling and Impact
Ruling Result
- A GCO was granted at a rate of 27.5%, ensuring that legal costs would be deducted from any awarded amount, thus preserving a significant return (at least 72.5%) for group members.