Financial services class actions have heightened with a 69 per cent rise in 2023, according to Allens, after a “brief reprieve” in recent years.
The law firm’s Class Action Risk 2024 report uncovered that 22 per cent of all class actions filed last year were related to the banking and financial services sector – an increase from 13 per cent in 2022.
Claims in the financial services sector were mainly related to super funds, conduct in selling complex financial products, shareholder class actions and data breaches.
“After a brief reprieve in recent years, the banking and financial services sector was the second biggest target for class action filings in 2023,” the report noted.
“However, for the second year in a row there were no class actions filed against the major banks in 2023 (although one case was filed against a subsidiary on behalf of superannuation members).”
Two of the biggest class actions covered by Money Management last year were the AMP BOLR class action – which was recently delayed for the third time – and the Dixon Advisory case.
Looking at other industries, retail and hospitality claimed the top spot for class actions in 2023 at 27 per cent, while the industrials sector came in third at 20 per cent.
Following the pipeline of class actions filed against banks and other financial services providers amid the Hayne royal commission, class actions have remained relatively spread across a broad range of industries – with no obvious focus on one sector, Allens observed.
More broadly, the law firm reported an overall rebound in class action filings across all industries in 2023 – marking the second highest year on record at 60 filings, compared to a peak of 68 in 2020.
Cryptocurrency and ESG matters were pinpointed as two key areas which could become more prevalent in future class actions, according to Allens.
“The continued regulatory focus on greenwashing and bluewashing, and the proposed introduction of mandatory climate and modern slavery reporting requirements, are likely to serve as the catalyst for future class action risk,” the report wrote.
Bluewashing relates to deceptive marketing that overstates a company’s commitment to responsible social practices.
Cryptocurrency and digital assets also “loom large on the horizon” as an emerging area of risk for potential class actions.
“With a proposed regulatory framework for digital asset platforms in the pipeline and ASIC challenging the positions of crypto issuers in the courts, it may be only a matter of time until there are developments in the legal landscape that provide ammunition to plaintiff law firms assessing the viability of these claims.”
