A number of key trends emerged over the past year (or were foreshadowed for the year ahead) in the commercial disputes space which will have significant implications for businesses operating in Australia in terms of increasing the risk of both consumer and regulatory litigation and the potential for higher penalties in areas such as privacy and competition.
Before the first quarter closes on FY 23-24, set out below are some of the key trends and regulatory developments our team has observed in the data, privacy, greenwashing, IP, defamation, unfair contract terms, arbitration, administrative review spaces for FY22-23.
In addition to the below, looking forward, we expect that the following trends (which we are closely monitoring) will shape the commercial disputes landscape in FY23-24:
Prior to FY22-23, only one data privacy class action had been commenced in Australia (which settled before being considered by the courts). Since that update, the landscape (and accordingly, the risk for businesses who experience a data breach) has changed significantly, with:
Each of the class actions above raise novel issues, for example, the application of common law causes of action such as negligence in a data breach context and the interpretation of various provisions of Australian data privacy legislation which have not, to date, been tested in the Courts (for example APP 11 of the Privacy Act). If successful, such cases may also open the floodgates for further class actions in this space. Any such claims (and corresponding risk to business) may be further bolstered by the introduction of a statutory tort for serious invasions of privacy or direct right of action for interferences with privacy, which are proposed to be introduced as part of the wide-ranging reforms to the Privacy Act (see our article here).
For more information about data privacy class actions in Australia, see our article here.
Regulation of data (including, but not limited to personal information) has become a key focus for Australian regulators in recent years.
In addition to the increased funding provisioned for privacy enforcement and other cybersecurity initiatives in the FY2023/24 budget (see our article here), various regulators have commenced enforcement actions which seek to apply more general obligations in a data/privacy context. For example, the following cases continued into this financial year:
We published a series of articles on the ACCC and ASIC’s continuing fight against greenwashing and misleading ESG claims (i.e. claims which misrepresent the extent to which a company, product, service or investment strategy is environmentally friendly, sustainable or ethical) (see here and here).
Over the last financial year, ASIC has set out to combat greenwashing as a key enforcement priority as seen in the 23 corrective disclosure outcomes, 12 infringement notices it has issued, and first civil penalty proceedings it has commenced in respect of greenwashing since July 2022.
Listed as an enforcement priority for both the ACCC and ASIC for 2023-24, we expect to see a continuing ramp up of enforcement action in this space. In July 2023, the ACCC published its draft guidance for businesses on making ‘Environmental and sustainability claims’. The ACCC are currently seeking consultation from interested parties on this draft guidance which will close on 15 September 2023. See our comprehensive article here.
ASIC has recognised four of the most common greenwashing practices which it has targeted over the past 12 months:
As the spotlight is now front and centre on sustainability-related disclosures, organisations that make such claims should ensure they are made on reasonable grounds and can be supported on a factual basis.
A recent example of ASIC’s enforcement in respect of greenwashing is their action taken against Vanguard on 25 July 2023. In these proceedings, filed in the Federal Court, ASIC alleges Vanguard made false and misleading statements and engaged in conduct liable to mislead the public in representing that all securities in the Vanguard Ethically Conscious Global Aggregate Bond Index Fund (Hedged) (Fund) were screened against certain ESG criteria.
The Model Defamation Amendment Provisions (MDAPs), which commenced in several Australian States and Territories in 2021 (save for the Northern Territory and Western Australia), introduced a raft of changes to Australia’s defamation laws. Some of the major changes included:
Several decisions have been published since the introduction of these changes which provide guidance as to the interpretation of the new provisions.
In relation to ‘serious harm’, it has been held that a plaintiff needs to establish that serious harm has been caused or is likely to be caused as a fact, rather than the mere inherent tendency of the words to cause harm: see our articles on Rader v Haines and Newman v Whittington.
Further, the nature of “special circumstances” which may justify the postponement of the determination of serious harm to a later stage in the proceedings was considered in Wilks v Qu (Ruling)  VCC 620 at - and (Wilks v Qu (Ruling 2)  VCC 1503 at -).
Finally, Zimmermann v Perkiss  NSWDC provides an example of a case where the Court dismissed proceedings at an early stage because the plaintiff could not establish the ‘serious harm’ element. The publication was a one-to-one Facebook Messenger message which alleged that a former employee had stolen a pair of scissors from a dog grooming salon.
There has been only limited consideration of the public interest defence. In Google v Barilaro  FCA 650, for example, Rares J of Australia’s Federal Court suggested in obiter dicta that the public interest defence is only available to the publication of defamatory matter in electronic form that is first published on or after 1 July 2021, and that ‘a failure to invite comment from a plaintiff’ may contribute to, or perhaps even form the basis of, a conclusion that a publisher has not established the defence.
There are, however, several cases currently before the Federal Court in which mass media defendants are seeking to rely, in part, on that defence which means that unless those cases settle, there is further and detailed consideration of the defence on the horizon: see, for example, Heston Russell v Australian Broadcasting Corporation (heard in July 2023); Dr Munjed Al Muderis v Nine Network Australia (hearing to commence in September 2023), Bruce Lehrmann v Network Ten (hearing to commence in November 2023) and Bruce Lehrmann v Australian Broadcasting Corporation (date to be determined).
Finally, the decisions in Mr Peter V’Landy’s case against the Australian Broadcasting Corporation emphasise the strategic importance of formulating proper and precise imputations at an early stage of any defamation complaint. This importance has been heightened since the introduction of the MDAPs, with the changes to the concerns notice provisions requiring that the imputations pleaded in proceedings be those which were identified in the concerns notice.
It is, however, worthwhile noting that the Courts have also, in recent times, allowed applicants to 'reformulate' imputations in limited scenarios. In Stead v Fairfax Media Publications (2021) 387 ALR 123 for example, the Court found that an imputation not substantially different to the imputation pleaded was conveyed. Similarly, in Roberts-Smith v Fairfax Media Publications  FCA 555, the Court allowed the applicant to reformulate an imputation, relying on the principles found in Stead.
In late 2022, we published a series of articles on the impending arrival of the new unfair contract terms (UCT) regime and penalties, commencing on 9 November 2023 (see here and here). The UCT regime is enforced by ASIC and the ACCC.
The new UCT regime widens the scope of businesses subject to the regime and prohibits businesses from proposing, or relying on (or purporting to rely on) unfair terms in a standard form contract. The overhauled penalty regime under the Competition and Consumer Act 2010 (Cth) (CCA) applies to breaches of the UCT regime. Breach of the UCT regime after 9 November 2023 expose businesses to penalties of up to $50 million or a penalty based on the benefit obtain from the breach or the business’ turnover during the infringing period.
Both ASIC and the ACCC have listed unfair contract terms as an enforcement priority for 2023-24. We expect to see a corresponding increase in enforcement activity from both regulators.
ASIC has backed up its public statements of its enforcement priorities. On 4 April 2023, ASIC commenced proceedings against Auto & General Insurance Company (Auto & General) who ASIC allege relied on an unfair term in its standard form contracts.
The impugned term requires customers to notify Auto & General “if anything changes about your home or contents”. ASIC alleges this is unfair because the term:
ASIC has also commenced proceedings against HCF Life Insurance Company Pty Ltd (HCF Life) alleging that a ‘pre-existing condition’ term contained in the contracts for its ‘Recover’ range of insurance products is unfair as it similarly purports to deny coverage if a customer did not disclose a pre-existing condition, even if a diagnosis had not yet been made.
As the new UCT Regime has not yet commenced, ASIC is seeking declarations that the terms are void in both instances These two proceedings should serve as stark reminders to the business community to review their standard form contracts for any potentially unfair terms in order to mitigate against the risk of falling under ASIC’s microscope once the new penalty regime kicks in.
In April 2023, the High Court of Australia unanimously upheld the decision of the Federal Court to enforce an arbitral award of €101 million in favour of Infrastructure Services Luxembourg S.à.r.l. against the Kingdom of Spain.
This decision made clear that:
For more information about this decision, see our article here.
The Federal Attorney-General has indicated that it will introduce legislation in 2023 to abolish the AAT and create a new federal administrative review body.
As part of the reform, in December 2022, the government released new AAT Appointment Guidelines.
We await the introduction of such legislation to assess the extent (and likely impact) of such changes.
In May 2023, the Full Court of the Federal Court in the decision of New Aim Pty Ltd v Leung  FCAFC 67, overturned a single judge Federal Court decision regarding the preparation of expert evidence and instruction letters.
In the primary decision, the primary judge:
On appeal, the Full Federal Court found that the entirety of the evidence of an expert witness called by the Appellant should not have been rejected as:
The key takeaways for lawyers involved in the preparation of expert evidence are as follows:
However, there may be an ethical obligation to do so, depending on the circumstances.
Over the past financial year, Australian Courts have increasingly begun appointing referees in commercial cases. Under applicable court rules, courts may refer proceedings, or a question arising in proceedings, to a referee for inquiry and to report back to the court. Issues referred to referees range from the determination of liability and damages, to the identification of candidates to conduct settlement distribution schemes. Generally, there are two types of referees:
Factors relevant to a Court decision to appoint a referee include:
Some recent examples of referrals include:
Commercial disputes are particularly amenable to referees, given the (often) complex issues that arise.