What is Class Action

By Ranjan Chandran (Construction Partner) & Dhanaraj Sivasampu (Liquidation Partner) For Messrs Hakem Arabi & Associates

Class action is generally known as Representative action in Malaysia.

Class action is filed where numerous persons have similar interest in a contemplated Court proceedings to be filed.

Essentially 3 conditions would have to be satisfied:-

  1. Plaintiffs are members of a class meaning part of the same group of people regarding the same subject property or subject issue.

  2. They have common grievances meaning all share similar complaints for example unpaid Liquidated Ascertained Damages (LAD), Guaranteed Rental Returns (GRR), Rebate claims, Developers Interest Bearing Scheme (DIBS) or Defects and Incomplete works etc.

  3. The Reliefs sought is in its nature beneficial to all whom the Plaintiffs represent for example all in the class are seeking common reliefs like Specific Performance of an Agreement or common reliefs like Damages for Breach of Contract etc.

What are the Benefits/Advantages of proceeding with a Court action by way of a Class Action:-

  • All the Plaintiffs speak with one voice before the Honourable Court and there is strength in numbers. The Perception of the Judge in appreciating the grievances/complaint is important and can be achieved by a larger group prosecuting the claim.

  • The documents of one person will be of assistance to the other person(s) in the group and vice-versa especially so where documents may have been misplaced or cannot be located at all.

  • There is the cost saving issue as when in a group, the professional fees that will be paid to the lawyers will be divided equally or proportionately so as to ease the burden of the litigant. The same with the Disbursements for filing and other expenses incurred. The cost incurred to individually engage a lawyer can be colossal and a burden to the litigant.

  • Discussions and Meetings are more meaningful as all in the class action group can express their respective views, comments or suggestions for the benefit of the group members and the case can be prepared with more strategy and refinement towards the ultimate Goal of winning a case.

  • When the matter comes for Full Trial/Hearing the testimony of a witness in the group can assist the group as a whole if in the event another group member does not perform to expectation. It must be borne in mind that giving evidence on the witness stand is no easy task and requires much composure, experience and required temperament to grasp the questions posed. This is where witnesses in a class-action can complement each other again towards the paramount objective of winning the case.

  • When in a class action, Execution of the Judgment for recovery is easy as there is a single Judgment pronounced by the Court. There is then the possibility of the Defendant being Wound-Up and in Liquidation, which again is easier handled as a class action group towards recovery of the Judgment obtained.