Video above: Insight finds out what the toll is of being involved in a class action and who gets what cut when a settlement is handed down. Class Actions, Tuesday March 30 at 8:30pm on SBS and On Demand.
When Rob Roseworne and his family moved to the Williamtown area just outside Newcastle in 2003, he never imagined that just over a decade later the same property he purchased would receive a valuation of being ‘absolutely worthless’.
In late 2015, he and others in the Williamtown community woke to a story in the local newspaper that found in firefighting foam used on the nearby RAAF base had been creeping into the area’s water supply. The chemicals, referred to as PFAS, had been used in training exercises on the base for decades.
As a result of the announcement, property values dropped, and local businesses suffered financially.
Though the research is still emerging, many in the community had for years been experiencing health problems thought to be linked to the contamination.
“We’ve had a number of males that have had testicular cancer. We’ve had a large prevalence of women with breast cancer, ovarian cancer,” Rob told Insight.
The residents of Williamtown knew they had to do something – and seemed like their best option for justice.
“We were over a barrel. We really didn't have much of a chance of running individual cases,” Rob said.
Neighbours of the Williamtown RAAF Base took up a class action against the Department of Defence in 2016. Source: AAP
Around 500 Williamtown residents signed up to the class action against the Department of Defence, which was mounted by Sydney law firm Dentons.
The case was , IMF Bentham – now known as Omni Bridgeway – who invest in lawsuits upfront in exchange for a cut of the damages.
Following the announcement of the Williamtown class action, two others were also announced at other contaminated sites around Australia; one in Oakey, QLD, the other in Katherine, NT.
The legal battle dragged on for years, until February of 2020 when Defence agreed to settle all three lawsuits for $212 million. Of that settlement, Williamtown would receive $86 million in compensation.
The legal team at Dentons received $9 million for their work, whilst the litigation funder, IMF Bentham, walked away with around $21 million. The remainder, roughly $55million, would be divided amongst the Williamtown residents.
Rob walked away with less than $100,000 – a figure that left him wondering what the point of it all was.
“We were involved in the class action with the view of possibly being able to move on in life, get a resolution, or if we chose to stay here, make sure that there’s no guarantee we would have contaminant coming down the drain. We haven’t even got that guarantee,” he told Insight.
“When the interests of the lawyers and funders are more important than the members they are representing, then a very unsavoury environment is created.”
Rob’s concerns were echoed in the recent parliamentary inquiry into class actions that was handed down in December of 2020. It raised concerns about the role of funders in the class action regime.
But not everyone involved in a class action sees the role of funders as negative.
Thirty-six per cent is something. It's a hell of a lot better than 100 per cent of nothing.
A few months before the Williamtown case was reaching a conclusion, another class action also funded by IMF Bentham was settled in Victoria – this time against dairy processor, Murray Goulburn.
It was alleged that the company misled the market about its financial forecast, causing shareholders to lose thousands.
“I lost $173,000,” lead litigant, Rod Gibson, told Insight host Kumi Taguchi.
The case settled for $42 million. The law firm, Slater and Gordon, took away six per cent, whilst IMF Bentham walked away with 25 per cent. Initially they wanted 32 per cent – a figure the Judge overseeing the case said was too high.
Despite this, Rod feels the funder played a crucial role in providing access to justice.
“I wasn't overly concerned whether they got that or a little bit more or a little bit less,” Rod explained.
“It would have been impossible for me to fund the thing clearly.”
After everything was stripped back, Rod only recouped $62,000 of his losses from the settlement, but to him it’s better than nothing at all.
“Thirty-six per cent is something. It's a hell of a lot better than 100 per cent of nothing.”
The question of who wins in a class action isn’t an easy one to answer – and it may not be found in any judgement or settlement.
When asked if he would consider being a part of a class action again, Rob Roseworne – who still lives on his contaminated Williamtown property – was unsure.
“We do need some protection.”
“Call it a class action, call it a whatever – a soccer game – I don't care, but we need some degree of protection, or otherwise we, as little people, are just going to get trodden on.”
