Hansard debates

Mr McGUIRE (Broadmeadows) (16:19): This bill delivers access to justice for everyday Victorians. I think this is the critical point that is being delivered. It makes it easier to bring class actions across a whole range of concerns, from silicosis to wage theft, to consumer harm and other wrongdoing that occurs, for people who do not have the opportunity to mount a case on their own. It paves the way for class actions to proceed where they otherwise would not be viable because of the financial risk to plaintiffs in legal costs. This is a critical proposition for people getting access to justice.

In relation to silicosis I do want to commend the government, the Attorney-General, the cabinet and everybody involved right through the party, and the union movement, who have acted decisively by banning the dry cutting of engineered stone to protect workers from deadly silica dust. These new regulations will dramatically cut workers’ exposure to crystalline silica and reduce their likelihood of developing silicosis. In addition, the government has developed a silica action plan to stamp out this debilitating disease. This plan includes free health screenings for Victoria’s 1400 stonemasons and a compliance blitz on high-risk workplaces. So this is a really important initiative in prevention and to actually address this significant problem.

I want to also raise, in the spirit of this legislation, something that I have noted just from my personal observation. Near my electorate office there is a nail salon. I have passed it, particularly on Friday evenings, when the place is full, and I can tell you the smell of the chemicals that emanate from there will clear your sinuses from 30 paces. It is in an area where there are a lot of migrant women. Particularly in my electorate I have got virtually the United Nations in one neighbourhood. Every time I have inquired about what actually is going on there, people seem to be defensive. I would like to again put this on the record in the Parliament that I think this is an area that needs to actually be looked at. I am just hoping that the people who work in these nail salons are not being exploited. They are overwhelmingly women, and I just hope that this does not become the next version of the silica problem. I just want to put that on the record with the Attorney-General as well in terms of how we take care of the vulnerable in our communities, and as I said, particularly migrant women, who are some of our most vulnerable.

With this bill the government has also committed to passing laws to criminalise wage theft. We have seen that right through the media in recent times—the different cases and how that is playing out—particularly in our hospitality industry, which has been the focus of high-profile stories and media coverage in the last couple of weeks. The bill also addresses employers who underpay their workers and how that can have greater scrutiny, accountability and compliance. So these are important reforms in areas affecting everyday Victorians, and the government wants to use all the tools at its disposal to support workers and consumers. Our class action laws can go a long way towards delivering this result.

Within our criminal justice system class action cases allow a case with six or more plaintiffs to combine their action, and they provide people who have been harmed access to courts to then get the damages that they deserve. In the past Victoria’s class action laws have been under-utilised. This is what the Victorian Law Reform Commission found in its 2018 report Access to Justice: Litigation Funding and Group Proceedings: in an average year only five class actions are filed in the Supreme Court. So those numbers tell the story.

It can be hard to find a person to act as the lead or representative plaintiff on behalf of a group of claimants. Plaintiffs fear that they will face the burden of legal costs if the matter is unsuccessful because they might be made personally liable for meeting the costs of the other side—so what this bill will do is address this imbalance in the scales of justice—and this acts as a major deterrent to ordinary people bringing cases against big corporations. So this is an improvement in the law so that Victorians can gain greater access to justice. In some cases the risk can be addressed by a law practice acting on a ‘no win, no fee’ basis, and we have seen those advertised, or through the involvement of a litigation funder. From my investigations into that sector, that can be beneficial in some ways but problematic in others as well. However, where that is not the case, the risk of personal liability may act as a major barrier to bringing a class action, so this is an attempt to address this critical gap and to make access more available to more people.

The law reform commission found that allowing lawyers to charge a percentage of the settlement amount in return for indemnifying the lead plaintiff for the other side’s costs lowers the risk for a potential lead plaintiff. So the bill allows lawyers to receive a fee that is calculated as a percentage of the settlement of damages, and this is achieved by enabling the Supreme Court to make what it calls group costs orders. This will shift the burden of costs risk from the lead plaintiff to the plaintiff lawyers in return for the lawyers receiving a percentage of any amount recovered as payment of their costs. So under these new group costs orders, and consistent with the law reform commission’s recommendations, lawyers would be required to indemnify the lead plaintiff for any adverse costs orders and provide security for costs if ordered. Many in the legal profession support this bill as a greater access to justice mechanism. The Law Institute of Victoria’s then president Stuart Webb has stated:

Enabling the Supreme Court to make group costs orders in class actions will mean that plaintiffs will bear a lower costs risk burden, and may facilitate the bringing of meritorious class actions which might not otherwise have been brought in the face of higher costs risks.

I also do want to cite the Consumer Action Law Centre response to this, and their commentary was that:

The Justice Legislation Miscellaneous Amendments Bill 2019 … will reduce barriers to class actions by allowing lawyers to receive a ‘contingency fee’, a fee that is calculated as a percentage of the settlement of damages.

And just to quote their chief executive, Gerard Brody:

Too often class actions do not proceed because the economics don’t stack up for litigation funders …

This is the point I am making about the system as it stands.

And regulators and other dispute forums, while important aspects of an effective justice system, can’t respond to all misconduct.

And that is the reality of what happens. A lot of injustices are just let go because it is either too difficult or too costly or the risks are too high. I want to quote Gerard Brody again. He says:

The changes in this bill should mean that more class actions are able to proceed. We see so much misconduct affecting vulnerable people by businesses such as payday lenders, debt management firms and even energy companies and telcos. Too often, significant harm goes unremedied.

This is the critical point. He noted that court oversight over class actions is integral for fair results and that:

Class actions relating to junk add-on insurances, a problem initially identified by community legal centres and scrutinised by the Financial Services Royal Commission, are now being settled. It’s important that the fees involved in these actions are fair, and steps are taken to ensure that all affected people benefit.

That is at the heart of this legislation. This is why it will deliver greater access to justice and fairer results, and on this basis I commend the bill to the house.