The parties' further submissions
64 It is appropriate that I now record the submissions that were made by the parties following the provision of the Litigation Protocol.
65 In its written submissions filed on 25 March 2019, CBA repeats and amplifies the substance of the submissions it advanced at the hearing. It submits that the Litigation Protocol only heightens its concerns about the Court making the Cooperative Case Management orders. It submits that the protocol makes it clear that the Applicants' proposed course will result in significant duplication of legal work, with increased overall costs, increased wastage of the Court's resources, and delay. In fact, it says that the Cooperative Case Management orders will work to the detriment of the parties, group members and the Court. It advances nine reasons.
66 First, CBA submits that the structure for decision-making under the Litigation Protocol creates the inevitability of increased costs and delay. It identifies 21 categories of "major decisions" referred to in the protocol that would fall for the Litigation Committee's deliberations and suggests that these would, in practice, "cover nearly every legal or forensic decision that must be made in the proceeding". It notes that the protocol allows for IMF and Therium to be involved in that decision-making process (as well as, of course, the Applicants themselves). It also notes that these might not be the only decisions made by the Litigation Committee. CBA submits that "(e)ach and every such decision will lead to a duplicative cost (even where there is ultimately agreement), and that cost will be hidden from the Court, group members and CBA". CBA also argues that this cost would be "amplified" by the involvement of the two litigation funders "in so many forensic decisions". CBA notes that the Litigation Protocol imposes no time constraints in making decisions, and suggests that the time for decision-making processes will be lengthened, compared with "a single proceeding with one litigation funder, one set of solicitors and the relevant Applicant(s)".
67 Secondly, CBA submits that the procedures for dispute resolution are not conducive to facilitating the resolution of the two proceedings as quickly, inexpensively and efficiently as possible in accordance with s 37M of the Act. It submits that, given the number of forensic decisions that arise in complex litigation, and the number of persons proposed to be involved in that process in the instant case, it is "almost inevitable" that there will be a number of decisions referred to the dispute resolution process. CBA submits that there have been a "litany of delays" and examples of disagreement thus far, which indicate the likelihood of problems arising in the cooperative management of the two proceedings, as contemplated.
68 Thirdly, CBA submits that the additional costs and delay that will be produced by the Litigation Protocol will "produce absolutely no benefit to group members or CBA at all". It submits that the Applicants have still not identified a single advantage of maintaining two identical proceedings - still less an advantage that counterbalances the detriments to which CBA refers.
69 In this connection, CBA argues that it is no answer for the Applicants to contend that group members have entered into contractual arrangements with the litigation funders to whom they should consider themselves to be bound. It says that the Court should not regard group members as "subject to whatever inequity might be inflicted on them by a funder because in a different context they have contracted with that funder".
70 Fourthly, CBA submits that only the Applicants are parties to the Litigation Protocol. It queries how the respective firms of solicitors and the litigation funders will be bound by it.
71 Fifthly, CBA submits that the Litigation Protocol stands apart from the Cooperative Case Management orders sought by the Applicants in the interlocutory applications. Further, the Litigation Protocol can be terminated by the Applicants, even at a time when it might be difficult for the Court to retreat from a decision to allow two proceedings to continue side-by-side.
72 Sixthly, CBA submits that the Litigation Protocol highlights concerns about how the burden of solicitor costs and disbursements might fall on the group members. CBA submits that, under the Litigation Protocol, disbursements are to be borne on a 50/50 split. The relative costs burden of the group members in each proceeding remains in the hands of the solicitors involved via the Litigation Committee, without one firm being the "dominant" firm or having the primary carriage of any particular issue (such as discovery or expert evidence).
73 CBA argues that there are "problems" with this approach. It posits a situation where there is a proposed settlement sum offered in each proceeding. On the assumption that the number of group members in the Baron proceeding (the closed class) is a small fraction of the number of group members in the Zonia proceeding (the open class), CBA submits that it is entirely conceivable that the group members in the Baron proceeding could bear half the costs to that point, and thereby suffer a disproportionate reduction in any settlement sum received. CBA submits that this could adversely impact on the parties' ability to achieve a settlement. It submits further that no evidence has been led to show that group members have made a choice as to how the costs burden could fall if the two proceedings were to continue under the Litigation Protocol.
74 Seventhly, CBA submits that it is notable that the Litigation Protocol seeks to protect IMF and Therium from costs exposure, while subjecting CBA to the duplicative costs of two sets of solicitors who only serve IMF's and Therium's interests. CBA submits that, if the Applicants are proposing to jointly take steps in both proceedings, then the funder ought to jointly have costs exposure to CBA's costs in defending those proceedings, irrespective of the arrangement the Applicants have among themselves in relation to their own costs.
75 Eighthly, CBA submits that the arrangements proposed in the Litigation Protocol for discovery, insofar as it envisages the development of, and agreement to, a usage protocol and database to be implemented across personnel acting for the Applicants, is an example of the "inefficiencies and duplication which must arise" from the two proceedings continuing on foot.
76 Ninthly, CBA submits that the provision in the Litigation Protocol which permits the respective applicants to brief separate counsel in certain circumstances, will "inevitably lead to further inefficiencies and complications".
77 In their answering submissions filed on 1 April 2019, the Applicants responded to each of the nine matters advanced by CBA.
78 The Applicants submit that CBA's first submission (the complexity of the decision-making processes under the Litigation Protocol) is predicated on the "mistaken and impractical belief" that a single representative proceeding does not, itself, involve a process where lawyers and funders consider, discuss, decide upon, and where necessary approve, decisions in a way that is commonplace in complex commercial litigation - such as where decisions are required to be made in consultation with corporate general counsel, boards of directors and, frequently, insurers.
79 The Applicants submit further that CBA's submission that "each and every decision will lead to a duplicative cost" is speculative and without an evidentiary foundation. The Litigation Protocol specifically provides that the legal personnel that will work on common matters will be no greater in number than if there was only a single, representative proceeding against CBA.
80 The Applicants also submit that, contrary to CBA's submission, costs will not be "hidden" from the Court, group members or CBA. When considering the approval of a settlement in group proceedings in this Court, it is standard practice for a costs assessor to review, and report on, the reasonableness of the applicant's costs. Further, should (in the present case) a judgment in favour of the Applicants be given, costs will be reviewed on a taxation of costs, if need be. The Applicants submit that any objection with respect to their costs can be ventilated at either of these junctures, with the benefit of knowing what costs have actually been incurred.
81 The Applicants submit that CBA's second submission (the dispute resolution process) misstates how the dispute resolution procedure in the Litigation Protocol is to operate. The Applicants argue that the dispute resolution procedure is a "safety mechanism" to resolve "deadlocks". It does not apply merely where there is disagreement. The Applicants submit that given the legal experience of the practitioners who will comprise the Litigation Committee, and their ethical responsibilities, there is no reason to suspect or speculate that any insoluble dispute will arise, let alone think that a number of decisions will be subjected to the dispute resolution process for which the protocol provides.
82 The Applicants submit further that there is no reason to think that decision-making under the Cooperative Case Management orders will, in any event, involve greater cost or delay than if there was only one proceeding. It is an inherent feature of any endeavour involving professional judgment that differences of view will emerge. Litigation is no exception and common experience shows that even in a single proceeding (including a single, representative proceeding) there can be differences of view (between solicitors comprising the team in the one firm and/or solicitors and counsel) as to how the litigation should proceed. The Applicants submit that there is no reason to think that, in the two proceedings conducted pursuant to the Cooperative Case Management orders and the Litigation Protocol, disputes requiring formal dispute resolution will necessarily occur.
83 Mr Watson's and Mr Sandhu's respective affidavits (filed after the hearing on 11 March 2019) were, in part, directed to CBA's first two groups of submissions.
84 Mr Watson deposed that, in his experience in representative proceedings with joint or cooperative applicant parties represented by different firms of solicitors (whether consolidated proceedings or cooperative proceedings), the level of cost and delay portrayed in CBA's submissions does not occur. He said that he has never directly encountered a situation where the applicant parties have been unable to resolve a dispute and have required recourse to a formal dispute resolution process (although he is aware of one instance where his firm was involved in a dispute resolution process where the dispute was determined by counsel retained by the applicant parties). He said that a formal dispute resolution process (of the type contained in the Litigation Protocol) is almost invariably never used in practice, but such a provision is considered necessary to be included in such a protocol to ensure that a pathway to formal dispute resolution is provided as a measure of last resort. He said that, in his experience, responsible practitioners acting in the interests of their group members will quickly and efficiently agree on decisions relating to the proceedings, in much the same fashion as occurs in a team meeting in major litigation conducted by and within a single firm.
85 Mr Sandhu deposed that, in cases conducted by a team of solicitors within the same firm, differences of opinion are commonly worked out within the team, with members advocating their positions, and listening carefully to the positions advocated by others. He said that, uncommonly, it may be necessary to seek advice from counsel briefed in the matter, where differences of opinion persist. Mr Sandhu said that he had no reason to believe that the position would be different in this proceeding, where the team would include lawyers from two firms.
86 Mr Sandhu also deposed, on information and belief (based on statements made by Mr Phi and Mr Finney), that Mr Phi's and Mr Finney's experiences of working on class action proceedings in which multiple firms act for the representative(s), accords with Mr Watson's experience, summarised above.
87 As I have said, CBA objected to this evidence, not least because the two affidavits were filed without leave after the conclusion of the hearing on 11 March 2019: see the observations of Mason J in Carr v Finance Co of Australia Ltd (1981) 147 CLR 246; 34 ALR 449 at 258, which apply equally in this Court. CBA submits that Mr Watson's opinion is given on a matter in respect of which "the Court needs no assistance". It also submits that Mr Watson has not identified a proper basis for his opinion. He does not identify the circumstances of the proceedings he is referring to or what occurred in them.
88 CBA submits that Mr Sandhu's opinion is clearly inadmissible; it is no more than his say-so. CBA also submits that Mr Sandhu's evidence on information and belief rises "no higher than hearsay evidence as to the opinion of 2 other persons".
89 In response, the Applicants submit that Mr Watson's evidence is based on his significant experience in representative proceedings, which is referred to in his earlier affidavits (read on the application) to which no objection was taken. I will admit Mr Watson's evidence. In doing so, I accept that it is expressed at a relatively high level of generality. Nonetheless, it is of some probative value.
90 The Applicants said that they are content for Mr Sandhu's opinion to be taken as a submission. I will treat it accordingly. As to the evidence on information and belief, the Applicants submit that the fact that the evidence is hearsay does not mean that it is inadmissible on this application: see s 75 of the Evidence Act 1995 (Cth). I accept that submission. Once again, even though the evidence is of a hearsay character, it is of some probative value and confirms Mr Watson's experience.
91 The Applicants submit that CBA's third submission (no benefit to group members) ignores the obvious right of parties to commence proceedings with representatives of their choosing. Further, the Applicants argue that CBA's submission does not explain why parties should be deprived of this right when Part IVA of the Act contemplates the possibility of multiple representative proceedings.
92 The Applicants submit that CBA's fourth submission (only the Applicants are parties to the Litigation Protocol) ignores the fact that Maurice Blackburn and PFM act, respectively, on instructions from Zonia and the Baron applicants, respectively.
93 The Applicants submit that CBA's fifth submission (the Litigation Protocol stands apart from the Cooperative Case Management orders) is irrelevant and wrong. Under the Litigation Protocol, the Applicants are required to give notice to the Court and CBA should they terminate it. In the meantime, they will continue to be bound by the Cooperative Case Management orders.
94 The Applicants submit that CBA's sixth submission (possibly disproportionate burden of costs on group members in the different proceedings) raises a matter that is not CBA's concern and is, in any event, fraught with "multiple difficulties".
95 As to the question of how disbursements are to be borne, CBA's complaint appears to be that the group members in the Baron proceeding may be prejudiced by a 50/50 split because they represent less than 50% by number of all group members across the two proceedings. The Applicants submit that CBA's submission:
(a) overlooks the fact that, absent cooperation, the group members in the Baron proceeding will bear 100% of the disbursements in that proceeding, which may not be much (if at all) less than the total disbursements in the two proceedings conducted under the Litigation Protocol; and
(b) assumes that disbursements should be allocated by reference to numbers of group members as opposed to the respective sizes of the two groups' claims (the group members in the Baron proceeding include a number of large institutions with very substantial claims).
96 As to the question of costs more generally, the Applicants submit that it cannot be known in advance what specific tasks will be required in preparing the Applicants' respective cases, or how those tasks are to be divided up. The Applicants submit that work allocation is best worked out iteratively and the Applicants well understand their obligations to cooperate so as to efficiently advance matters without duplication of work.
97 The Applicants also submit that there is no substance to the suggestion that their proposal could adversely impact the ability of the parties to achieve a settlement. They submit further that the Court has power under s 33V of the Act to approve any costs and how they should be allocated to ensure fair treatment for all group members.
98 The Applicants submit that CBA's seventh submission (protection of Therium and IMF from costs exposure) is misconceived because the Litigation Protocol does not protect, and cannot protect, the litigation funders from costs exposure. The Court's discretion to approve costs upon any application for settlement approval, or to award costs upon a final determination, is not fettered by the protocol.
99 The Applicants submit that CBA's eighth submission (the cost of arrangements for discovery under the Litigation Protocol) overstates the work required and the attendant cost. Once again, Mr Watson's and Mr Sandhu's affidavits address this point. Mr Watson says:
In relation to clause 9.2 of the Protocol regarding a Relativity usage protocol, based on my experience, such protocols are routinely drafted and applied internally at Maurice Blackburn in representative proceedings so as to ensure a consistent approach by the relevant legal team in their review and management of discovery. Such protocols would ordinarily set out rules and guidelines on how document reviewers ought to treat certain categories of documents and provide a taxonomy of relevant issues in the proceeding. Therefore, even if this proceeding were to be conducted as a single proceeding, an internal Relativity usage protocol would need to be drafted in any event and the costs of doing so would not be materially different to what is proposed under the Protocol.
100 Mr Sandhu's evidence is to the same effect: there will always be a team of lawyers and paralegals undertaking discovery review and it will be necessary to have a discovery protocol to ensure that documents are coded by that team, both by reference to their degree of relevance and their subject matter, in a uniform way.
101 The Applicants submit that CBA's ninth submission (possible engagement of separate counsel in certain circumstances) is of no weight because, just as it is responsible to include deadlock-resolution mechanisms in the Litigation Protocol, so too it is responsible to include provision for separate representation should the interests of Zonia and the Baron applicants diverge. In this connection, the Applicants submit that if, for example, CBA persists with a "divide and conquer" strategy to stay the Baron proceeding, there would be a divergence of interests. I note, once again, that this possibility was foreshadowed by Zonia and the Baron applicants at the hearing on 11 March 2019: see [30] above.
102 Finally, the Applicants submit that CBA's criticisms should be seen against the background that on 6 December 2018 (when consolidation of the two proceedings was in prospect) it described the proposed consolidation as "a positive step" and "desirable", even though the then consolidation proposal envisaged that Zonia and the Baron applicants would continue as applicants, with the two firms of solicitors and the two litigation funders, all of whom would need to cooperate with each other. Although at that time they raised certain cost concerns, there was no suggestion by CBA that these concerns meant that consolidation should not be ordered.