What you need to know
- Settlement of a class action can be challenging where the size of the class or the likely number of group members who will choose to participate in any settlement is unknown at the time of a mediation.
- To get a better handle on those factors, courts have the power to order a notice be issued to group members asking them to register by a certain date. The notice can foreshadow that orders will be sought at the time of settlement to extinguish the claims of group members who neither opt out nor register to participate in the class action, without them having a further opportunity to register by that date.
- Whether the court orders this notice process is an exercise of discretion. There has been uncertainty around whether (as a matter of practical reality) the court will order that process over objection by the plaintiff.
- The court has now done so in two recent cases. This is a potentially significant practical development, particularly for defendants seeking to better understand and potentially settle their class actions exposure.
Background – the soft class closure journey
There was a period during which courts could make what were referred to as "soft class closure orders". This would involve the court making an order – before a mediation – that anybody who did not register before mediation would not get another chance to register after mediation if the matter settled. This essentially "closed" the size of the class for the mediation – although if the matter did not settle then it would reopen. While there is a statutory power enabling these orders to be made in Victoria, they are no longer available in other jurisdictions.
However, the High Court has since endorsed a somewhat similar process, in which the court does not make an actual ruling before mediation that excludes further registrations after mediation, but rather gives notice that orders will be sought after mediation to approve settlement and extinguish the claims of group members who neither opt out nor register to participate before mediation without them having another chance to register.
The label given to this notice process is still evolving. It is sometimes referred to as "soft class closure", even though it is different to the former process that took that name. It is sometimes referred to as a "Lendlease style notice" process (after the name of the case in which the High Court said such notices could be issued). In this article we refer to the process as soft class closure notices.
Whether the court will actually order such notices before mediation is a matter of discretion. We discussed the factors relevant to that discretion in our earlier article. There is no "one size fits all" approach, and it will depend on the various factors at issue in the proceedings.
There have been two recent interesting cases where the court has made orders for soft closure notices to be sent despite various objections made by the applicants on behalf of the class. We discuss those cases below.
Case study 1 – Green v Johnson and Johnson Pacific Pty Ltd (No 2) [2026] FCA 1094
Green is a class action brought on behalf of individuals who purchased cold and flu medicine manufactured by Johnson & Johnson Pacific – an estimated 8 million individuals. The claim makes allegations about the effectiveness of the products and claims they were worth less than their price.
The Court favoured a soft class closure notice despite the applicant's objection, having regard to the following factors:
- At some point, a registration process is required because J&J Pacific does not have the contact details for group members.
- There was "great uncertainty" as to the number of group members who would seek to participate in any settlement. Further, there was no reliable way to estimate (even roughly) the participation rate. Given that participation rate information is a "critical integer", settlement would be very difficult without it. Any settlement reached without participation rate information could be unfair to the interests of group members. If the participation rate was higher than the parties expected, any negotiated settlement could result in an unfairly low amount to be distributed to each group member (if the same lump sum was spread among more people).
- The potential for more group members wanting to register after the deadline was not of concern to the Court. Justice Moshinsky considered that the parties should be able to make an appropriate allowance for applications for leave to participate after the deadline, and that registration would still provide a good indication of the likely participation rate.
- Similarly, the "money on the table" phenomenon (that group members are less likely to register before a settlement or a judgment award) was found to have less force in this case than others because of the small dollar amount of claims (which could be as little as $25). That is, even following a settlement, many group members may not be incentivised to register. Concerns about low registration rates were likely to be a problem in this case irrespective of when the registration process takes place. In addition to low claim values, it is likely that group members may not be able to verify their claims (either having no purchase records or no recollection of details of their purchases).
- Despite the cost of over $1 million to facilitate the notice distribution and registration process, it was appropriate for registration to occur, because early resolution is in the best interests of group members.
- Group members are protected if the registration process does not operate as intended or fails to achieve its objective. The notice only foreshadows closing the class – the Court is not bound to make those orders.
Case study 2 – Merrett v State of Queensland (Queensland Police Service (No2)) [2026] QSC 154
Merrett is a class action brought on behalf of 18,987 Queensland Police Service employees who were directed to be vaccinated or receive a booster for COVID-19.
Justice Williams adopted the considerations in Preece v Aristocrat Leisure (see our update here) as a framework within which to evaluate competing factors, although acknowledged the various interests may pull in different directions at a point in time. It is up to the Court to manage those interests.
The Court made orders for soft class closure notices over the plaintiff's objection having regard to the following factors:
- Registration would provide participation rate information. In turn, this is likely to increase the prospects of achieving a reasonable settlement. In this case, there was no other way of knowing with any level of precision how many people fell within a particular subgroup of the claim (which could be in the tens, hundreds or thousands of people). Notification by group members of which subgroup they fall within would also assist the parties with their quantum sampling exercise prior to mediation.
- The distribution procedure (which had to occur anyway for the opt out notice) was relatively complicated due to the composition of the class and privacy restrictions on using personal information to distribute the notice. Registration would have the benefit of streamlining future communications about the claim (and remove complications for future notices). Further, the proposed 12 week window was adequate and reasonable to decide whether to register.
- Registration would ensure that ongoing conduct of the proceeding is proportionate to the potential size of the claim (although that was not necessary for the decision).
What next
This is an area of particular interest to defendants wanting to ascertain the size of the class and value of exposure prior to entering into settlement negotiations.
While the factors the courts will consider in exercising its discretion to make orders for soft class closure notices are relatively settled, their application is still quite uncertain – particularly in circumstances where a defendant contends they need registration information to engage in settlement but the plaintiff objects. These cases provide further guidance on how the competing considerations are weighed up and when it may be appropriate to make such orders.
Authors: Ian Bolster, Head of Complex Litigation APAC; Nick Mavrakis, Partner; Srishti Natesh, Partner and Sally-Anne Stewart, Counsel.
Want to know more?
- Reflections on class closure (15 October 2025)
- High Court gives soft landing to "soft" class closure orders (8 May 2025)
