Bar Association of Queensland - The changing face of practice conference - 
the operation of the australian Class Action regime – 2013
The Hon Justice Bernard Murphy*
“The Victorian Supreme Court has begun hearing a class action in which about 10,500 people are seeking damages for losses in the Kilmore East-Kinglake fire. This particular fire storm claimed the lives of 119 people and destroyed more than 1200 homes and properties… That this case can be heard at all is a measure of the maturity of Australia's class-action regime, which in the past 15 years has generated substantial financial settlements for people and companies affected by negligence, misleading claims or the failure of company officers to properly carry out their duties.”

Editorial, The Age (Melbourne), 5 March 2013.

1.	Introduction
It is unsurprising that, in a conference dedicated to a review of the changing face of legal practice, some attention is paid to developments in the Australian law relating to class actions. 
Of course, representative procedures themselves are not new, having been available under English law for a long time. For example, Order 16 rule 9 of the Rules of the Supreme Court 1883 (UK) provided that “… where there are numerous persons having the same interest in one cause or matter, one or more of such persons may sue or be sued … on behalf or for the benefit of all persons so interested”. These rules were replicated in Australia. However, interpretation of these provisions by the Courts led to procedural difficulties, and the representative procedures facilitated by such provisions fell into disuse. 
The modern class action procedure was introduced in response to the deficiencies of the former representative scheme and that is what we are here to talk about today. This modern procedure is an attempt to deal with the problems of mass claims arising from the very large civil wrongs that sometimes occur in modern economies - that is, a mass solution for mass wrongs.
2.	The report of the Australian Law Reform Commission into Grouped Proceedings
The Australian class action journey started in 1977 when the Federal Attorney General requested advice from the Australian Law Reform Commission (“ALRC”) as to whether class actions ought to be introduced into Australia. Following a review by a committee including Justice Wilcox of the Federal Court and Dr Peter Cashman, the ALRC issued a report in 1988 which recommended that a class actions procedure be introduced in the Federal Court of Australia.
It did so for the expressly stated aim of enhancing access to justice by reducing the cost of court proceedings to the individual and improving the individual’s ability to access legal remedies. It also aimed to promote efficiency in the use of Court resources, increase consistency in the determination of common issues, and make the substantive law more enforceable and effective. 
3.	The class action regime in the Federal Court 
Part IVA of the Federal Court of Australia Act 1976 (Cth), which contains the class action provisions, came into effect on 5 March 1992. It set out a prescriptive regime containing detailed provisions for the commencement and conduct of class actions.
Section 33C sets out the threshold requirements for the commencement of a class action under the regime, namely that:
(a)	there must be claims by seven or more persons against the same person;
(b)	the claims must arise out of the same, similar or related circumstances; and
(c)	the claims of all those persons must give rise to a substantial common issue of law or fact.
Other important provisions cover: 
•	standing  (s 33D);
•	the consent of a person is not required to be a class member (s 33E);
•	the right of a group member to opt out of a representative proceeding (s 33J);
•	the ability to “de-class” proceedings when:
o	it appears likely to the Court that there are less than 7 class members (s 33L);
o	the cost of distributing damages is excessive having regard to the likely total of those amounts (s 33M);
o	it is in the interests of justice to do so due to certain prescribed reasons 
(s 33N);
•	the determination of issues not common to all group members, that is, sub-group issues (s 33Q);
•	the determination of individual issues (s 33R);
•	settlement and discontinuance (including requirement for court approval) (s 33V);
•	settlement of the representative’s claim (s 33W);
•	suspension of limitation periods while group members’ claims are on foot (s 33ZE);
•	the power of the Court to make such orders as it deems necessary in the interests of justice (s 33ZF); and
•	the prohibition on ordering costs against class members (except in relation to specific individual or sub group issues) (s 43(1A).
4.	The climate in which the regime was introduced 
The new class action regime was enacted by Federal Parliament following vigorous debate, and in a climate of concern that class actions would cause serious impediments to business through:
•	legal entrepreneurialism;
•	US style litigation; and 
•	misuse of the media in a litigation context.
In particular, there was a concern that the introduction of the new class action regime in Australia would:
•	open the floodgates of litigation; and 
•	induce substantial out of court settlements (regardless of the merits of a case) due to financial and reputational pressures.
5.	The operation of the regime in practice 
Fortunately, the operation of the regime in Australia has been such that these early fears have gone unrealised in practice. Some important differences are apparent in the ways that class actions operate in the US and in Australia and these differences have assisted our system to remain balanced. It is now broadly accepted that the Australian class action regime is working well and this conclusion is supported by empirical and anecdotal evidence.
5.1	Empirical Research
Since 2009 we have had the benefit of detailed empirical research performed by Professor Vincent Morabito. Professor Morabito’s research shows that many of the myths about class actions are without foundation. Amongst other things, his research shows that:
•	The number of class actions that have commenced in Australia has been modest. The studies show that, in the Federal Court of Australia and the Supreme Court of Victoria, a total of about 281 class actions commenced in the 17 year period between March 1992 and 31 December 2009. This is an average of only about 15 per year in the Federal Court and about 3 per year in the Supreme Court. With respect to other jurisdictions, the number of commenced class actions is unlikely to be significant because they either did not have a class action regime for the relevant period or it was only recently introduced.
•	Despite early concerns of an avalanche of such litigation, shareholder class actions still represent only 25 per cent of all class actions in the past five years.
•	Close to 70 per cent of all class actions concluded within two years and, at the time of publication of Professor Morabito’s research, the average duration was declining. 
•	Class actions are not always successful and in fact, 51 per cent of the time, class actions either do not continue or do not continue in that form. This result undermines the basis of concerns that defendants would be placed in such a disadvantageous position that claims would succeed despite a lack of merit.
•	The “typical” class representative was a married, middle aged, professional male residing in New South Wales. Professor Morabito’s research indicates that, in Australia, there is no culture of organising class actions such that the obligation to pay costs would be avoided in the event the litigation was unsuccessful.  
•	“Closed” or opt in classes has not led to any significant increase in competing class actions. 
•	During the 17 year period from 1992 to 2009, every class action under the federal system that was supported by a litigation funder resolved in favour of the class.
5.2	The view of the ALRC
In January 2000, the Australian Law Reform Commission finished a lengthy and detailed review of the federal civil justice system. This review specifically included a consideration of the class action regime, concluding that: 
Procedures for representative proceedings generally appear to be working well and in accordance with legislative intentions.  The Federal Court does not view such cases as more problematic than other complex cases.
5.3	The view of state legislatures 
Following introduction of the federal regime the various state parliaments in Australia have had ample opportunity to see how the regime operates in practice. It is said that imitation is the most sincere form of flattery, and a good indication that the federal regime is operating well is the fact that several state governments have adopted the same procedures. In 2000 Victoria, and in 2010 New South Wales, introduced class action regimes that are substantially the same as the federal regime. More recently the same regime has been recommended in Western Australia and a similar regime is under active consideration in Queensland.
5.4	The view of lawyers acting for defendants in class actions
Of course these views vary, but the view of defence lawyers appears to be that the Australian class action regime is working reasonably well. This sentiment has been confirmed to me at numerous class actions seminars, conferences and symposiums that I have attended or spoken at in the last 15 years. These forums have been attended by partners from most of the major law firms acting for defendants or their insurers. They have informed me that they consider that the Australian class action regime is, in general terms, working well.
Mr Ken Adams and Mr Damian Graves, the lawyers who head Australia's largest defence class action practice and the co-authors of a leading Australian academic text on class-action, wrote in a 2010 article: 
There is a lot of hysteria surrounding class actions in Australia and unfortunately for all parties involved it can lead to some serious misconceptions about what's happening in the local legal sector.
5.5	The view of Australian corporate regulators
The two main corporate regulators in Australia have expressed support for the role that class actions play in assisting the regulation of corporate misconduct. 
First, in December 2005 the then Deputy Chairman of the Australian Securities and Investment Commission, Mr Jeremy Cooper, stated:  
ASIC cautiously welcomes the emergence of the shareholder class action in Australia as a “self help” mechanism whereby shareholders are able to seek damages for loss incurred at the hands of directors and advisers who negligently or dishonestly cause loss to those shareholders. ….Vigilant shareholders and a vigorous, but appropriately balanced, shareholder class action landscape, will play an important part in maintaining the integrity of the equity capital market in years to come.
Second, in July 2006 the then Chairman of the Australian Competition and Consumer Commission, Mr Graeme Samuel welcomed the settlement of the Vitamins Cartel class action and stated that the $41 million settlement was “a lesson to those that are involved in cartels”. He referred to a three pronged approach under which the ACCC would first seek penalties, and second seek jail terms for cartel operators. The third prong was private claims for damages by consumers and businesses.
5.6	The view from the bench
Whilst it would be wrong to suggest that there is a unanimity of views amongst judges as to the operation of the class action regime, I think it is now safe to say that most judges do not view the regime with suspicion. This appears from various judgments refusing to strike out class actions, and case managing and deciding them, without pointing to any unfairness or injustice in the regime. 
The successes of the regime, particularly its apparent success in delivering a measure of justice to both claimants and defendants in mass claims, have lead to it being cautiously embraced by many judges.  For example, in 2008 Justice Finkelstein said: 
While there are problems with securities class actions, it must, I think, be accepted that they serve a useful function.  It is often said that these actions promote investor confidence in the integrity of the securities market.  They enable investors to recover past losses caused by the wrongful conduct of companies and deter future securities laws violations.
5.7	The claimants
Another obvious touchstone with regard to the success of the class action regime is its application to a large number of different causes of action, and on behalf of many hundreds of thousands of claimants in diverse areas. Examples include the following:
•	Personal injury through food, water or product contamination
Such class actions include claims for injury arising from contaminated peanut butter, water, oysters, pizza, pork rolls, Christmas dinner, Spanish Mackerel, food provided on a holiday cruise, and illnesses caused by excessive iodine in soy milk.  
•	Personal injury through defective products
Class actions of this type include claims arising from defective breast implants, tobacco, defective pacemaker batteries, sterilisation clips, artificial knees, and adverse reactions to travel sickness pills and arthritis medication.  
•	Actions under the Migration Act
A number of class actions relating to the operation of the Migration Act 1958 (Cth) were commenced in the period 1992 to 2002.  In particular, these proceedings related to refugee status, illegal detention, and the refusal of visas. However, in October 2001 an amendment to this Act put an end to such class actions by providing that class actions were no longer permitted in any proceeding relating to visas, deportations or removal of non-citizens.
•	Shareholder class actions
Approximately 25 class actions have been commenced on behalf of shareholders against various listed companies for misleading or deceptive conduct and/or breaches of the continuous disclosure regime on the share market. The largest of these cases include the GIO Class Action which settled for $112 million in 2003, the Aristocrat Class Action which settled for $145 million in 2008, the Multiplex Class Action which settled for $110 million in 2010, and the Centro Class Action and National Australia Bank Class Action which settled for $200 million and $115 million respectively in 2012. 
•	Investor class actions
Numerous class actions have been commenced by investors complaining of conduct by the promoters of various investments including in infrastructure projects, a shopping centre, debentures and security notes, vehicle tracking technology, margin lending arrangements, investments in collateralised debt obligations and apartment purchases.
•	Anti-cartel class actions
Four class actions to date have been commenced on behalf of consumers and businesses against cartelists. Three of these cases concerned international cartels, and one concerned a local cartel. Three have been resolved, namely the Vitamins Cartel Class Action for $41 million, the Rubber Chemicals Class Action for $1.5 million, and the Amcor-Visy Class Action for $120 million. The Air Cargo Class Action which relates to an international cartel to fix various surcharges for air freight is ongoing.
•	Disaster class actions
Such class actions include the following.
The Longford Gas Plant class action in 1998 on behalf of more than 1 million consumers, businesses and employees, which related to an explosion and fire at a major gas plant which caused a two week interruption to the gas supply to Australia's second-largest city. Following judgment for the plaintiffs, in part, and lodgement of an appeal by both sides the action was settled for $32.5 million. 
The Melbourne Aquarium class action in 2000 on behalf of more than 100 people who alleged that they contracted Legionnaires disease at the aquarium. The action was settled on the basis of payment in full to all class members for their personal injuries and economic losses. 
Five Bushfire class actions were commenced in Victoria in 2009 on behalf of thousands of people who suffered personal injury, property damage and economic loss as a result of bushfires. In broad terms they alleged that negligent maintenance and operation of power lines by power companies caused the fires. Three of these class actions have been settled in favour of the class members and another two are still on foot.
The Abalone Virus class action in 2010 by Victorian abalone fishermen against a state government department in relation to the escape of a virus from an abalone farm which then decimated the wild abalone population off the Victorian coast.
A class action has been threatened against the Queensland government department that operates the Wivinhoe Dam in relation to major floods which caused numerous deaths and major property damage and economic loss in January 2011. 
•	Consumer class actions
These have included class actions by consumers induced by misrepresentations to purchase goods which were not as represented and the Bank Fees class action, which commenced in September 2010 against eight Australian banks for allegedly illegal fees charged including honour and dishonour fees, over limit fees, and late payment fees. 
•	Environmental class actions
There have been few such cases but those that have commenced include a class action in relation to injury caused by industrial pollution and a class action brought on behalf of landowners who suffered losses when gas from a nearby former rubbish tip entered into their houses. This last case was settled for $23.5 million.
•	Human rights class actions
Similarly, there have been few such actions but some examples include a class action commenced in 2011 on behalf of children and young adults who had been wrongly arrested and jailed because of out of date or incorrect bail information in the New South Wales police computer system, and a class action on behalf of former students at the Fairbridge Farm School between 1938 and 1974 against the Fairbridge Foundation and the Commonwealth Government alleging physical and sexual abuse.
•	Trade union class actions 
Trade unions commenced more than 40 class actions in Australia in the period between 1992 and 2011 (although 19 of these cases were brought with respect to the same industrial dispute). The subject matter of these claims have included employment issues such as underpayment claims, disputes about employer conduct in obtaining workplace agreements, and orders against imminent termination of employment.
•	Miscellaneous
Numerous other class actions have been commenced for causes of action which fall outside the broad categories I have set out above. These include diverse causes of action such as a class action by women who were infected with Hepatitis C at a medical clinic, and a class action by travel agents to recover commissions on fuel charges paid by airlines. 
The variety of these causes of action, the large numbers of claimants, and the various kinds of claimants (including “mums and dads”, private individuals, small companies, public companies and institutions) that sign fee and retainer agreements or litigation funding agreements so as to ‘join’ the actions indicates acceptance of the regime by the community. 
In my view they do so because they expect some justice through the regime. Whilst there is no empirical research as to the total damages paid as a result of representative proceedings to date, the total appears to be well over $1 billion. 
Laws which purport to provide protections to citizens but which are not capable of being used by them are no more than an illusion, and a balanced and effective class actions regime is important in improving access to the protection of substantive laws. While the regime is working well at present, of course there remain numerous issues in the operation of class action law in Australia.  There is a need for vigilance to ensure the regime remains balanced and sustainable. 

One of those issues is discovery and interrogation of class members which I will briefly deal with.
6.	Discovery and interrogation of class members
The advantages for class members in participating in a class action rather than bringing their own individual action include the fact that:
•	they are not required to instruct lawyers or pay legal fees;
•	they are not required to take an active role in the case or assume its work or stresses;
•	their exposure to adverse costs is very limited (see s 43(1A)); and 
•	they are not parties to the action and are therefore not amenable to discovery or interrogation on the usual basis unless or until the common issues are resolved in their favour. 
The High Court drew a clear contrast between the applicant and class members in a class action in Mobil Oil Australia Pty Ltd v State of Victoria.

The model of Part IVA is that once the proceeding meets the threshold requirements of 
s 33C, and is otherwise suitable to proceed as a class action, the matter proceeds on the basis that any findings made at a trial of common issues bind not only the parties, but also all non-party class members to the extent that those issues arise in each class member’s claim. In providing a remedy for mass civil wrongs there is a good basis for the proposition that to maintain the utility and efficiency of the regime the resolution of the common issues should (as far as possible) occur without the necessity for class members to participate as parties, or be involved actively in the interlocutory steps and initial trial.

While it is clear enough that the Court has power to order discovery by class members, it is against this backdrop that the question arises as to whether, and to what extent, the courts should allow discovery from, or interrogation by questionnaire of, class members.

Why not discovery from all class members?

Defendants to a class action would usually prefer to have discovery from class members on both liability and quantum questions, and/or to have them answer a questionnaire. The reasons for this are obvious. They may well be in the uncomfortable position of facing an action brought by the representative party that relates to claims brought by an unknown number of claimants, of unknown quantum, and in circumstances where the particular strengths and weaknesses of individual class member’s claims are not easily discernable. 

In my view there is no prohibition on discovery from class members, but the authorities indicate that discovery will usually only be ordered from class members on a limited basis and from a representative sample. As Forrest J said in Thomas v Powercor, “…there is no scope for an order for discovery by all group members, absent extraordinary circumstances.”

There are a number of rationales for this approach. First, it is because discovery from all class members may significantly reduce the utility of the class action regime, causing it to operate like a joinder of mass claims rather than a device to deal with those claims through the vehicle of the representative party. One can see the massive work and expense involved in, say, discovery from the 50,000 class members in the first shareholder class action King v GIO,  or the thousands of bushfire victims in Matthews v SPI Electricity Pty Ltd and Others, making claims for property damage, economic loss, personal injury and death in varying circumstances.  That work and expense will be wasted unless the plaintiff is successful on the common issues.

Second, class members required to discover or answer a questionnaire are likely to need to instruct and pay lawyers, cutting away at the passive role allowed to them by the Part.

Third, the difficulties for a defendant in ascertaining the quantum of class members’ claims must have been plain to Parliament in enacting Part IVA. As Finkelstein J said in Multiplex No 2 at [31]: 

…it is a common, if not an inevitable, feature of class actions that the defendant will be faced with uncertainty regarding the quantum of potential group member claims. This is partly because of the essentially passive role of group members, already discussed. In many class actions, this uncertainty will be compounded because the identity of the group members is not known. True their identity may be discovered, sometimes with a good deal of effort. But group members are under no obligation to identify themselves and the named applicant, if he does not know who they are, has no obligation to seek them out. 

Fourth, many class members well understand the advantages of the regime in allowing their participation in a proceeding as a class member rather than as a party. They jealously guard their right to take no steps and incur no costs unless or until the common issues are resolved in their favour. The plaintiff will often be unable to compel the class member to take a different view. Sometimes the requirement that they discover documents operates to cause them to opt out, thereby damaging the utility of the regime.

Finally, the history of class action litigation in Australia seems to indicate that the parties have had sufficient information to enable informed settlement negotiations to occur, in the absence of discovery being provided, or questionnaires being answered, by group members . The majority of class actions have settled before trial, many doing so using devices which enable verification of quantum or liability questions to be dealt with as a condition of the settlement. Settlement appears to occur more readily in class actions than in non-class action litigation (which is also indicated by American experience) which points away from a need to disturb the utility of the regime or the essentially passive role of class members. 

Of course, as one experienced class action lawyer argues, justification for such disturbance may well still exist as settlements may have been reached notwithstanding unresolved issues because the costs, delays and risks of class proceedings make settlement preferable to trial.

Some of the significant decisions on discovery by group members include the following.

P Dawson Nominees Pty Ltd v Brookfield Multiplex Ltd (No 2)

In Multiplex No 2  Multiplex sought an order that a closed class of 109 shareholders, many of whom could be described as sophisticated or institutional investors, provide discovery of litigation funding agreements and broad share trading trade information evidencing their acquisition and sale of shares. The applicants had already provided a shareholder database created from the material provided by the shareholders. Multiplex asserted that it could not assess the value of the claims without further and better information, and could better decide what course to take, including whether to settleif it received the information. A mediation process was on foot.

Finkelstein J refused to order discovery of trade information by class members (although he ordered disclosure of the litigation funding agreements) explaining at [16]-[17]:

The starting point is that the class actions regime under Pt IVA of the Federal Court Act is designed to require little or no active involvement by group members. A group member is a group member principally for the limited purposes of taking the benefit, or suffering the burden, of findings on common questions (i.e. questions that are common to the claim brought by the named applicant and claims that may be pressed by group members). In an action where money relief may be sought by a group member, the group member will generally only be required to provide specifics about the quantum of his or her claim after the common questions have been resolved and that may be in a separate action.

Given the intent of the class action regime, there must be some compelling reason demonstrated before a court will order group members to go beyond their otherwise essentially passive role.” (Emphasis added) 

Thomas v Powercor Australia Ltd (Ruling No 1)

In Thomas v Powercor Australia Ltd (Ruling No 1), in an ‘open’ class action in relation to property damage and economic loss suffered by about 135-185 class members in a bushfire, the defendant initially sought discovery of all documents relevant to quantum in the possession of the class members. The solicitors for the plaintiff acted for 67 members of the class, and the defendant later revised its request to discovery of all quantum information provided by these class members to the solicitors. 

Although rejecting the defendant’s contention that it might be appropriate to order discovery from all known class members, Forrest J also decried the “bulldog approach” of the lawyers for the plaintiff in refusing to provide any discovery and particulars of loss for mediation purposes. His Honour said:
	…it is patently contrary to the purpose and intent of the [Civil Procedure Act 2010 (Vic)] for a court to sit by passively and allow a case to proceed to what may be a lengthy trial of Mr Thomas’ claim on liability and quantum, without ensuring that there is adequate information available to both Mr Thomas and Powercor to achieve resolution, not only of Mr Thomas’ claim but also of the claims of the group members. In my experience this is not a novel proposition. Often in group proceedings the solicitors for the representative plaintiff provide particulars and, where necessary, supporting documentation relevant to the quantum of group members’ claims.” 

His Honour made orders for limited discovery and particulars of claim by 10 class members (five large and five small claims) so as to increase the defendant’s understanding of the quantum of the claims made against it and improve prospects of settlement. 

Two Victorian Supreme Court of Appeal decisions

In two recent decisions the Victorian Court of Appeal took different courses. In National Australia Bank Ltd v Pathway Investments Pty Ltd the Court of Appeal upheld Pagone J’s refusal to require the plaintiff in a ‘closed’ shareholder class action to disclose the identity particulars of the class or provide wide ranging discovery in respect of 20 large shareholders. The discovery sought went to liability questions rather than quantum. His Honour took into account that discovery was being sought in respect of class members who normally play a passive role in class proceedings. 

In Regent Holdings Pty Ltd v State of Victoria and Another the ‘closed’ class action sought damages suffered by abalone licence holders, abalone fisherman and abalone processors as a result of the release of a virus from an abalone aquaculture farm which had severely damaged wild abalone stocks. The Court of Appeal upheld Beach J’s decision to order that 14 members of the class of 194 persons provide particulars and discovery relating to quantum in the context of a pending mediation. The Court held at [15]:

Of course, so to say does not imply that class members ought generally be required to provide particulars and make complete or even substantial discovery in advance of the determination of a representative party’s claim. Each case turns on its own facts and circumstances. But where, as here, it is proposed to mediate the whole class action in advance of the trial of the representative party’s claim, it makes sense to order such particulars and discovery as will provide the defendants with sufficient information to formulate rational settlement offers. 

While I would respectfully agree with the orders in the circumstances of that case, the distinction the Court of Appeal drew between orders for discovery in ‘open’ and ‘closed’ class actions is somewhat problematic. The regime should operate similarly whichever way the class is defined.  

I note also that in funded ‘closed’ class actions it is commonplace for a litigation funding contract to provide that the class member agrees to participate in the proceeding on the basis that he or she is not required to take an active role (including by providing discovery). It is not clear whether such a term was part of the litigation funding agreement in Regent Holdings, and the court did not refer to any difficulties in interfering with the parties’ contractual rights.  

Hopkins v AECOM Australia Pty Ltd (No 2)

In Hopkins and Another v AECOM Australia Pty Ltd and Others (No 2) Nicholas J largely rejected an application by the respondents for a questionnaire to be administered to members of a closed class of investors. The questionnaire sought information regarding: 
•	the quantum of each class member’s investment which was the subject of the claim; 
•	whether the class member read the product disclosure statement, and if so, which part, and further, how long it took him or her to do so; 
•	what other documents the class member had read before taking up the investment, including when and where they did so, what parts he or she read and how long it took; and
•	the identity of any financial adviser who may have advised a class member about the investment including details of any written or oral advice.

The respondent desired to bring claims for contribution against the financial advisers of Victorian or Tasmanian class members, but did not know their identity. Essentially because of the risk of prejudice to the respondent if orders to identify relevant financial advisers were not made, Nicholas J allowed a limited questionnaire to be administered to those class members who resided in Victoria or Tasmania. Having decided that a questionnaire was appropriate on this basis his Honour also allowed some other questions to be added to it.

Overseas authorities

In overseas jurisdictions significant limitations are imposed on discovery from class members. For example, in the Canadian case of Western Canadian Shopping Centres Inc v Dutton, McLachlin CJ said:

I agree that allowing individualized discovery at this stage would be premature. One of the benefits of a class action is that discovery of the class representatives will usually suffice and make unnecessary discovery of each individual class member. Cases where individual discovery is required of all class members are the exception rather than the rule. Indeed, the necessity of individual discovery may be a factor weighing against allowing the action to proceed in representative form.

The respected American reference, the Manual for Complex Litigation, provides as follows (citations omitted):

Discovery from Class Members

Post certification discovery directed at individual class members (other than named plaintiffs) should be conditioned on a showing that it serves a legitimate purpose. … One of the principal advantages of class actions over massive joinder or consolidation would be lost if all class members were routinely subjected to discovery. Most courts limit discovery against unnamed class members, but do not forbid it altogether. In setting appropriate limits, a judge should enquire whether the information sought from absent class members is available from other sources and whether the proposed discovery will require class members to obtain personal legal counsel or technical advice from an expert. Some courts have held that class members are not parties for the purpose of discovery by interrogatories, but may be required to respond to a questionnaire approved by the court. Others have permitted limited numbers of interrogatories upon a showing of need, limited the number of class members to whom interrogatories may be directed, limited the scope of discovery to a brief, non-mandatory questionnaire relating to common issues, or have imposed on defendants the added cost of mailing otherwise permissible interrogatories to absent members of a plaintiff class.

Conclusion 
Australian courts have to date taken an appropriately cautious and limited approach to applications to discover documents from, or administer a questionnaire to, class members. 

Whether such an order is appropriate will depend upon the particular facts and circumstances of a case, the purpose of the request, the breadth of the discovery or the questionnaire proposed, and the number of class members proposed to be affected. 

A relatively common basis for an application for discovery from class members is that it will assist in settlement if the defendant is able to better understand the quantum of the claims made. The authorities indicate that a request for discovery of documents related to quantum (rather than liability) from a limited sample of class members, so as give a defendant a better idea of quantum for settlement purposes, is likely to have a reasonable prospect of success. 

It is also worth noting that judges’ experienced in case managing class actions have been able to effectively deal with this issue and avoid a dispute about discovery. If the court orders mediation by a Registrar at an early stage, and authorises the mediator to require the provision of such documents as will assist informed settlement discussions between the parties, it is likely that (within that confidential mediation process) the plaintiffs will be required to disclose information relevant to the quantum of class members’ claims.  

Justice Bernard Murphy
9 March 2013