Shareholder class actions: Are they good for shareholders?

The frequency of shareholder class actions in Australia has steadily increased over the past decade to the point where it has been observed that corporations in Australia face a higher risk of a shareholder class action than in any other jurisdiction apart from the United States. The dual benefits of shareholder class actions - compensating investors who suffer loss when corporations breach their disclosure obligations and deterring corporations from breaching them in the future - have largely been taken for granted. However, the effectiveness of shareholder class actions in delivering these benefits warrants closer scrutiny.