Common Fund Order in best interest of PFAS class action group members

_{< Go back to Class Actions Landscape Australia}

This ex tempore judgment concerned a successful application for settlement approval in relation to a class action against the Commonwealth for the alleged contamination of private land with chemicals known as PFAS through their use on RAF bases.

The proposed settlement was for $132.7 million inclusive of legal and funding costs. The Court made a common fund order (CFO) of 25% of the sum, amounting to $33.2 million and approved the deductions sought for legal costs, being $16.6 million. Additionally, various reimbursement payments were sought and granted for lead applicants, sample class members, and another class member who played a particularly active role.

His Honour noted that the earlier PFAS actions, in which a CFO of 25% was granted, were significantly less complex than the present matter. His Honour was minded to make the order particularly given that a CFO would provide certainty as to the sum of the deduction which would not be the case with a funding equalisation order, and it would be consistent with the previous PFAS actions.

The proposed settlement would not affect any claim or potential claim for personal injury damages associated with PFAS contamination.

In determining whether the proposed settlement was fair, reasonable, and in the interests of class members, Lee J considered an extensive confidential opinion prepared by counsel for the applicants. Interestingly, orders were made permitting class members to inspect the opinion subject to signing a confidentiality undertaking.

His Honour was satisfied that “the amount of compensation a claimant will receive roughly reflects the merits of the claims”, particularly having regard to the liability and quantum risks set out in the confidential opinion.

His Honour was satisfied that the distribution scheme was reasonable, though the reasons for this were not detailed, and the capped administration costs were appropriate. As to legal costs and additional deductions for particular class members and the lead applicants, his Honour was satisfied that they were fair and reasonable, noting that the costs referee was satisfied with the legal costs as sought.

A number of class member objections were received and considered by his Honour including nine class members who made oral submissions at the hearing. His Honour addressed the concerns of individual class members including by explaining that subjective feelings of hurt caused by the contamination do not necessarily have a bearing on whether the settlement is fair and reasonable.

In relation to funding costs, his Honour noted that the funder entered into funding agreements with two thirds of the class members, and thus funded class members were contractually obliged to pay a funding fee.

Haswell v Commonwealth of Australia (No 3) [2023] FCA 1093

Federal Court of Australia, Lee J,
13 September 2023

Applicants’ Solicitors: Shine Lawyers
Respondent’s Solicitors: Corrs Chambers Westgarth
Applicants’ Funder: LCM Funding Pty Ltd 

_{< Go back to Class Actions Landscape Australia}