The Worley Class Action Appeal: lessons, implications, and potential changes to the continuous disclosure regime on the horizon

The Full Court of the Federal Court of Australia (FCAFC) allowed an appeal from Australia’s second shareholder class action, Crowley v Worley Limited [2022] FCAFC 33, and remitted the case back to a single judge for determination, which may give rise to the first order for damages in a shareholder’s class action in Australia. The decision is a noteworthy authority for misleading and deceptive conduct by future representations and contraventions of the continuous disclosure regime in the Corporations Act 2001 (Cth). Background Worley Limited (Worley) is an ASX listed engineering company. Worley published an earnings guidance statement (Earnings Guidance). The Earnings Guidance stated that Worley expected increased earnings (NPAT) in the financial year (FY) 2014 of $322M. Worley published revised earnings guidance with forecast NPAT between $260M to $300M. Following the revised guidance, Worley’s shares dropped by about 26%. Worley’s CFO, Simon Holt, prepared an internal memorandum reflecting on the problems…