The proposed confidentiality orders
4 The applicant (or more accurately her lawyers) sought overly broad confidentiality orders. The proposed confidentiality orders related to:
(a) the entirety of the report of Ms Kerrie-Ann Rosati, the Court-appointed Costs Referee, who was directed to inquire into and report to the Court on the reasonableness of the applicant's legal costs which were proposed to be deducted from the settlement monies; and
(b) the Commonwealth Bank of Australia Deed Poll (the CBA Deed Poll) which was an important element of the proposed settlement.
5 The applicant's lawyers did not seek suppression of the total amount of costs and disbursements they sought to charge. Nor did they seek that the Costs Referee's report not be disclosed to group members. An earlier order provided that, upon request, the Costs Referee's report could be disclosed to group members on a confidential basis. They sought confidentiality orders on the basis that the Costs Referee's report relied on documents and information that are confidential and/or subject to privilege, including documents going to the applicant's case theory and litigation strategy and communications with legal representatives, experts retained by the applicant and/or the applicant herself. It was submitted that it was in the interests of the administration of justice for such communications subject to legal professional privilege to remain privileged, even after the approval of any settlement.
6 In Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 at [8]-[9], I said in the context of a settlement approval application:
It is wrong to assume that confidentiality or non-publication orders will be routinely or automatically made. Part VAA of the Act provides that the starting point for consideration of such orders, and it is mandatory under s 37AE for the Court to take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. The Court must be satisfied that the order is necessary "to prevent prejudice to the proper administration of justice" (s 37AG(1)(a)), and "necessary" is a "strong word": Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [30].
There is a basis for treating some of the applicants' material as confidential (at least until settlement approval orders made) but the application for confidentiality orders was far too broad and wasted the time of the parties and the Court. There is a public interest in not making overly broad confidentiality orders in approving settlements in class actions, particularly the interests of class members in having a proper understanding of a settlement which affects their interests.
7 In Liverpool City Council v McGraw-Hill Financial, Inc (now known as S&P Global Inc) [2018] FCA 1289 at [102] Justice Lee approved the remarks in Caason and said that the trend of seeking wide-ranging confidentiality orders when making a settlement approval application was to be discouraged. More recently in Clark v National Australia Bank Limited (No 2) [2020] FCA 652 at [13]-[15], showing signs of increasing frustration with the practice of seeking overly broad confidentiality orders, his Honour said:
At the risk of sounding like a broken record, I have tried on a number of occasions to send the message to the profession that given the fact that the primary objective of the administration of justice is to safeguard the public interest in open justice, and that open justice is fundamental to the operation of the judicial power of the Commonwealth (particularly in circumstances where one is dealing with the extinguishment of rights of non-parties to the litigation), it is fundamental that any confidentiality orders made pursuant to Pt VAA of the Act be calibrated to ensure that only confidentiality orders that are necessary be made.
As the High Court explained in Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 (at 654 [30]), the word "necessary" is a "strong word". The threshold for an order to be made has been made deliberately high, but again and again material is proposed to be the subject of confidentiality orders on settlement applications which, on any view of it, includes information that has already been revealed in public, is anodyne, or is otherwise able to be revealed without any real prejudice to the administration of justice. This unfortunate approach of overreach can be seen in this case by reviewing the so-called "confidential affidavits" that were not redacted.
…one hopes that recognition of the importance of the primary objective of the administration of justice and the need to ensure transparency (particularly in relation to Pt IVA proceedings) will find wider acceptance and be reflected in a more careful approach to seeking such orders.
8 Class actions are not just disputes between private parties about private rights, they have a public dimension: Madgwick v Kelly [2013] FCAFC 61; 212 FCR 1 at [91]. The settlement of class action proceedings is not just a private bargain between the parties in which the parties may legitimately seek to keep aspects of the settlement confidential: McGraw-Hill at [107]. Frequently, class actions perform a public function by being employed to vindicate statutory policies such as disclosure to the securities market, prohibition of cartel conduct and the provision of safe medical and pharmaceutical products: see Legg M, Class Actions, Litigation Funding and Access to Justice (Law Research Paper No 17-57, UNSW, 7 September 2017). It is important to safeguard the public interest in open justice, which is entrenched in the settlement approval regime under Part IVA of the FCA Act: Jenkings v Northern Territory of Australia (No 4) [2021] FCA 839 at [64]-[65] (Mortimer J).
9 There is also a significant public interest in information relating to legal costs and litigation funding charges in class action litigation. In recent years those matters have been considered by the Australian Law Reform Commission and the Parliamentary Joint Committee on Corporations and Financial Services and have been the subject of much media commentary: see ALRC Report No 134, Integrity, Fairness and Efficiency - An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, (December 2018); Parliamentary Joint Committee on Corporations and Financial Services, Litigation Funding and the Regulation of the Class Action Industry (21 December 2020); see also Petersen Superannuation Fund Pty Ltd v Bank of Queensland Limited (No 3) [2018] FCA 1842; 132 ACSR 258 at [20]; Endeavour River Pty Ltd v MG Responsible Entity Ltd (No 2) [2020] FCA 968 at [35].
10 I found it difficult to see a proper basis for confidentiality orders over the entirety of the Costs Referee's report in circumstances where, upon approval, those costs were to be deducted from the settlement monies available for distribution to group members. Further, in approving a proposed settlement under s 33V of the FCA Act, the Court is exercising judicial power and is obliged to "take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice", and that such an order must be "necessary to prevent prejudice to the proper administration of justice": ss 37AE and 37AG of the FCA Act.
11 I could not understand how it could reasonably be said that a confidentiality order in relation to the entirety of the Costs Referee's report was necessary to prevent prejudice to the proper administration of justice, as s 37AG(1)(a) of the FCA Act requires. I had no difficulty in accepting that it was in the interests of the administration of justice for communications subject to legal professional privilege to remain privileged even after the approval of any settlement. I also accepted that the Court should be careful to ensure that any confidential documents and privileged information to which the Costs Referee had regard to in preparing her report did not become publicly available through the release of the report. But no confidential or privileged documents were annexed to the Costs Referee's report and the report did not set out or otherwise indicate the contents of any confidential or privileged documents, nor did it disclose the applicant's case theory and/or litigation strategy in any material way.
12 I informed counsel for the applicant that I would not make the proposed confidentiality orders, but I would make an interim confidentiality order under s 37AI of the FCA Act to preserve confidentiality in the meantime, and would consider an appropriately calibrated order which only sought confidentiality in respect of identified parts of the Costs Referee's report in relation to which it might reasonably be said that disclosure might reveal confidential or privileged information. I gave the applicant's lawyers time to consider the position, and to put on further material. Subsequently, I made orders allowing the redaction of a few select parts of the Costs Referee's report which arguably revealed confidential or privileged information. None of the redacted parts would have attracted legitimate public interest.
13 In relation to the CBA Deed Poll, the applicant argued that a confidentiality order should be made because the document was provided on the basis that it be kept confidential. But the agreement recorded in the Deed Poll was an important term of the proposed settlement and it should not be kept confidential. In any event, Colonial (appropriately) withdrew its claim of confidentiality over the CBA Deed Poll.