Australia: A Dispute Resolution Overview
Australia is an active and evolving market for litigation. While the use of arbitration is on the increase in Australia, the Courts remain the predominant venue for the resolution of disputes. Australia's federal structure, along with low bars to jurisdiction in most courts, mean that the Federal Court and the major State courts compete to attract the best work, a dynamic which tends to drive procedural innovation.
Public Accountability and Regulatory Enforcement
A significant driver of litigation is an increasing culture of public accountability. Over the past ten years there have been a large number of Royal Commissions and other forms of public inquiry instituted by both Federal and State governments into a wide range of topics from misconduct in financial services, to government misfeasance and, most recently, antisemitism. Quite apart from being significant undertakings in and of themselves, these inquiries often result in significant follow on litigation.
For example, the Federal Court's decision in ASIC v Bekier (2026) FC 196 is a significant decision about the nature and extent of directors' duties. The proceeding was commenced by Australia's securities regulator, the Australian Securities and Investments Commission (ASIC), and alleged that the directors of a casino operator had breached their duties by failing to adequately control conduct which put the company's casino licences at risk.
The underlying conduct came to light as a result of a public inquiry instituted by a State independent casino regulator, which handed down its report in 2022, resulting in the suspension of the casino's licence to operate, an AUD100 million fine and the appointment of an administrator.
ASIC and Australia's competition and consumer protection regulator, the Australian Competition and Consumer Commission (ACCC) have always been active in enforcement. However, there is now somewhat of a "regulatory arms race" with increased enforcement activity from a number of other regulators, including APRA (the prudential regulator), AUSTRAC (the AML and CTF regulator), ACMA (the communications and media services regulator), the OAIC (privacy regulator) and the TGA (medicines and medical devices).
Public inquiries and regulatory investigation enforcement actions are often triggers for the commencement of class action seeking significant damages awards. For example, the 2019 report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry gave rise to a litany of class actions against banks and superannuation trustees.
Class Actions and Consumer Law
Australia's opt-out class action regime is widely regarded as one of the most accessible frameworks for group litigation globally. It is now available, in a largely consistent form, in the Federal Court and most State Supreme Courts. A class action can be commenced on the basis of a single substantive issue of fact or law which is common to group members. Class actions are opt out and there is no requirement for certification before the class action can proceed. One jurisdiction, Victoria, allows lawyers running a class action to apply for a Group Costs Order, which, if granted, permits the lawyers to take a percentage of any verdict or settlement.
The Australian Consumer Law is a significant driver of class action activity, and manufacturers who supply products into Australia should be aware of their potential exposure. Recent High Court cases have clarified that consumers have a right to recover "reduction in value" damages directly from a manufacturer if they have purchased goods that breach the consumer guarantee of acceptable quality. Such damages may be recovered if the consumer can establish that the reasonable consumer fully acquainted with all of the facts would have paid less for the goods, regardless of whether the particular consumer has in fact suffered a loss.
A growing trend is the migration of disputes from overseas jurisdictions into the Australian market. Claims first advanced in the United States are increasingly serving as a blueprint for litigation and regulatory scrutiny in Australia. This trend was especially evident throughout 2025 in the medical and pharmaceutical sectors, where a number of class actions and investigations closely reflected allegations already being pursued overseas. We anticipate this will continue into 2026.
Emerging areas of class action risk include cybersecurity incidents and data breaches, driven by both the prevalence of attacks against Australian organisations and the significant expansion of penalties and enforcement powers under recent Privacy Act reforms. ESG-related claims, including greenwashing allegations and climate-related disclosure disputes, are also generating both regulatory enforcement and private litigation.
Artificial Intelligence in Litigation
The rapid expansion of artificial intelligence (AI) is reshaping the conduct of litigation globally. In 2025, several Australian courts issued formal practice notes regulating the use of generative AI by legal practitioners. The NSW Supreme Court released the first dedicated guidance, followed by similar directions in Queensland and Western Australia. These make clear that lawyers remain fully responsible for the accuracy of all material filed with the court and impose disclosure obligations where AI tools are used in drafting or research.
The courts have already imposed real consequences for non-compliance. In multiple instances during 2025, practitioners were referred to professional regulators or faced adverse costs consequences for AI-assisted submissions containing erroneous or fabricated citations. As AI tools become more embedded in legal practice, the tension between efficiency gains and professional obligations will remain an important consideration.
Inbound Investment Disputes
Inbound investment into Australia is also a significant source of litigation. In November 2025, a US pharmaceutical company sought to terminate its agreement to purchase Mayne Pharma, an ASX-listed pharmaceutical manufacturer and distributor. The Supreme Court of NSW held that the purchaser had not validly terminated the purchase agreement. The decision, which is currently on appeal, raises important questions about the ability of purchasers to rely on material adverse change clauses and the weight that should be placed on earnings forecasts. If the judgment is upheld, the Bar in Australia for a purchaser to withdraw from an M&A transaction will be high. Mayne Pharma has commenced a separate proceeding against the purchaser seeking damages for its wrongful termination of the agreement.
Intergenerational Wealth Transfer
Finally, Australia is starting to see a significant intergenerational transfer of wealth. A 2021 Productivity Commission report estimated that more than AUD3.5 trillion in assets would pass from the Baby Boomer generation to subsequent generations over the coming two decades. JBWere's Bequest Report (July 2024) has since revised this figure upward to AUD5.4 trillion, reflecting significant asset valuation changes in the intervening period, with approximately AUD150 billion in inheritances changing hands annually. The commencement of this wealth transfer, combined with complex business and trust structures, is already leading to an increase in oppression and related shareholder actions, including claims for alleged breaches of directors' duties in family-controlled enterprises. This trend is likely to intensify as the transfer accelerates through the 2030s.