On 9 December 2019 the Supreme Court of NSW approved a settlement of a class action alleging invasion of privacy (the first Australian case of this kind). The Court’s reasons for doing so were published on 12 December 2019.
The approved settlement sum was A$275,000, to be allocated between 108 class members (all being employees of the NSW Ambulance Service, part of the NSW state government). If all class members were to receive an equal amount, each member would receive a little over A$2,500. A separate amount of $250,000 was approved to be paid as costs to the lawyers acting for the plaintiffs.
The allegation was that a contractor engaged by the Ambulance Service had made an unauthorised disclosure of certain details of workers compensation claims made by the class members against their employer. The unauthorised recipient of that information was a solicitor at a law firm, who reported the contractor to the police because he suspected that the contractor was not authorised to provide the information to him. The unauthorised disclosure occurred about a year after the contractor had ceased working for the Ambulance Service.
Before approving the settlement, the Court received a confidential opinion from the plaintiff’s counsel. Amongst other things the opinion canvassed various legal difficulties associated with pursuing the claim to trial, including:
- it is presently undecided in New South Wales whether an equitable cause of action for breach of confidence will sound in damages or equitable compensation for mental distress falling short of psychiatric illness;
- the causes of action pleaded for breach of the tort of invasion of privacy depend upon the court accepting that it should recognise the existence of the new tort;
- although the contractor committed criminal offences, the Ambulance Service may contend that because the contractor’s acts were outside the scope of his engagement, it cannot be held vicariously liable for his actions (especially when the disclosures occurred around a year after he had stopped working for the Ambulance Service); and
- in relation to a claim that the Ambulance Service had engaged in misleading and deceptive conduct by making certain representations to the affected employees, the plaintiff will need to overcome the Ambulance Service’s defence that its dealings with its employees are not in trade and commerce.
In my view, the first of these hurdles ought not to have been especially difficult to overcome. But the others would have been much more challenging for the plaintiff.
From the government’s perspective, even if it had successfully defended the case, it could easily have incurred unrecoverable legal costs in excess of the total amount it agreed to pay in the settlement.
And for the plaintiff’s lawyers, the settlement no doubt mitigated the risk that they would lose substantial fees if the case progressed to trial and was ultimately unsuccessful (the court stated that the plaintiff’s actual legal costs were almost double the approved payment of $250,000).
For these reasons, my view is that it is important to not read too much into the approval of the settlement. In particular, the economics of the case indicate that it is not a harbinger of future privacy class actions in Australia.