Recent judicial developments are reshaping the landscape for shareholder class actions in Australia. In particular, the first successful shareholder class action at judgment in Brambles and the Full Court’s decision in Crowley v Worley Limited [2026] FCAFC 78 (Worley) mark a significant turning point. Both of these decisions saw plaintiffs succeed not just on liability, but also on causation and loss.
At the same time, the High Court of Australia will shortly hear the appeal from the Full Federal Court’s decision in Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Limited [2025] FCAFC 63 (CBA) – a key authority on causation and loss. This introduces a further layer of uncertainty and potential recalibration.
For listed entities, boards and insurers, these developments warrant a reassessment of litigation risk. While structural constraints remain, the practical barriers to proving causation and loss have been materially reduced, increasing the likelihood of renewed activity.
Background: a period of constraint
In the years following Myer (2019), shareholder class actions were characterised by repeated failures at trial. Plaintiffs were sometimes able to demonstrate contraventions of continuous disclosure or misleading conduct provisions, but they were unable to establish causation and loss.
The Full Federal Court’s decision in CBA (2025) typified this position. Although breach of continuous disclosure obligations was established, the claim failed because loss could not be sufficiently proven, reinforcing the centrality of counterfactual analysis and expert evidence.
These outcomes had observable market effects:
- funders adopted stricter investment thresholds;
- plaintiff firms became more selective; and
- defendants increasingly resisted early settlement.
By 2024-2025, filings had stabilised at relatively low levels, reflecting a disciplined but constrained claim environment.
Brambles: a new frontier
Against that backdrop, Brambles was a watershed. It is the first instance in which an Australia shareholder class action has resulted in a successful judgment and an award of damages for group members.
The case concerned earnings guidance that was maintained after it ceased to have a reasonable basis. When that guidance was ultimately withdrawn, the share price declined, and the Court accepted that this sequence of events caused shareholders to suffer loss. The Court went further and quantified that loss, determining per‑share damages for group members.
The importance of Brambles lies less in any doctrinal innovation and more in its practical consequences for the litigation landscape. For several years, the absence of successful outcomes had created a perception that shareholder class actions were unlikely to succeed at trial, particularly given the difficulties associated with establishing causation and quantifying loss. That perception has now been eliminated.
This is also true of the approach adopted by the Court. The decision confirms that market‑based causation can be applied successfully at trial and that loss can be established and quantified despite the inherent complexity of the analysis. It also reflects a willingness by the Court to adopt a practical, evaluative approach to the counterfactual analysis, rather than insisting on exact precision.
Consequently, the decision is likely to have a material impact on the behaviour of key market participants. Plaintiff law firms and litigation funders now have a concrete example that such claims are capable of succeeding, which may influence both case selection and funding appetite. At the same time, defendants can no longer assume that claims will fail due to difficulties in proving loss. This shift is likely to have implications for litigation strategy, including the approach to settlement and the willingness to take matters to trial.
Worley: reframing causation and loss
The Full Court’s decision in Worley should be understood as building on the foundation established in Brambles. Where Brambles demonstrates that liability, causation and loss can be established together at trial, Worley provides appellate-level articulation of the principles that make that outcome possible.
As in Brambles, central to the Court’s reasoning was a reaffirmation of market‑based causation in Australian law. And while Australian courts in shareholder class actions had previously endorsed market-based causation as a matter of principle, Worley was the first instance of an appellate court taking the further step of applying it to make findings of loss. This removes any lingering uncertainty as to the availability of this form of causation.
The Full Court also adopted a more flexible and pragmatic approach to proof of loss. Rather than requiring exact counterfactual modelling, it accepted that loss may be established through a combination of expert analysis and reasonable inference. This reasoning aligns closely with the approach taken in Brambles. Both decisions recognise that counterfactual analysis in securities litigation will necessarily involve estimation, and both reject the notion that evidentiary imperfection should operate as a barrier to recovery. It represents a departure from earlier approaches, which had proved insurmountable.
Taken together, Worley and Brambles mark a coherent shift in the treatment of causation and loss. Brambles demonstrates that the elements can be proved in practice, while Crowley confirms that the law permits a more flexible approach to doing so.
CBA: a potential further inflection point
The High Court appeal in CBA introduces a further dimension to the current landscape. The case is expected to consider issues concerning market‑based causation, counterfactual analysis, and the standard for proving loss. It is the first occasion that the High Court has been asked to weigh in on these issues in this context.
The outcome of the appeal may either confirm the approach reflected in Brambles and Worley or re‑introduce a more stringent framework. It may also provide broader guidance on the role of economic evidence in securities litigation and the relationship between liability and damages.
Until the High Court has determined the appeal, there will remain a degree of uncertainty in how the law will continue to develop.
The emerging risk profile
Brambles and Worley are likely to re‑energise shareholder class action activity in Australia. While they do not remove the complex evidentiary challenges inherent in these claims, they will contribute to a rebalancing of perceived litigation risk between plaintiffs and defendants.
Of course, the outcome of the appeal in CBA may result in a consolidation of these developments or a further recalibration.
The result is a litigation environment that remains disciplined but is increasingly viable for well‑constructed claims. Plaintiffs must still establish contraventions of disclosure obligations or misleading conduct and rely on credible expert evidence. However, claims that satisfy those thresholds are now more likely to be brought, funded and pursued through to judgment.
From a strategic perspective, these developments have implications for both plaintiffs and defendants. Plaintiffs may be more willing to progress proceedings toward trial, while defendants can no longer rely on the expectation that claims will fail at the loss/damages stage. This is likely to influence settlement dynamics and increase the importance of early and rigorous assessment of exposure.
For guidance on how these developments may impact your litigation risk and disclosure approach, reach out to Tim Case and Alex Sloan from our Litigation and Dispute Resolution team.