JB Hi-Fi has encountered a significant setback in its legal battle against approximately eight million customers claiming the retailer sold them ineffective extended warranties. The Victorian Supreme Court denied JB Hi-Fi’s request for a “soft class closure,” allowing the class action, initiated by the Melbourne-based law firm Maurice Blackburn in December 2023, to proceed.
The customers allege that the extended warranties, which last between three to six years, provide minimal value. According to the plaintiffs, these warranties essentially duplicate protections already afforded to consumers under the Australian Consumer Law (ACL). They argue that JB Hi-Fi did not adequately inform them of their rights regarding these protections, leading to considerable consumer confusion.
Court’s Ruling and Implications
The court approved a group costs order of 30% for Maurice Blackburn’s legal fees, a rate described by the judge as “high end” for class actions. Such high-percentage costs are typical in large consumer cases where potential liabilities can be substantial. JB Hi-Fi sought to implement soft class closure orders, which would have limited new claimants and set deadlines for joining the lawsuit. The court rejected this application, citing potential conflicts of interest among group members and concerns that late registrations could undermine fairness and complicate case management.
In a separate matter, JB Hi-Fi requested a preliminary ruling regarding the treatment of the statutory guarantee period under the ACL in the context of the extended warranty class action. The court declined to hold a hearing on this issue, noting that it presents a novel legal question that the High Court of Australia has yet to address. This could lead to further appeals as the case progresses.
The class action is set to commence on October 5, 2026, and is expected to last around six weeks. The initial focus will be on lead plaintiff Jeremy Clarke and a representative sample of other claimants. The outcomes from this “sample trial” will help determine whether the remaining eight million customers have valid claims.
Potential Impact on Retailers
Maurice Blackburn is increasingly adopting this strategy in large class actions, allowing for the resolution of critical issues before considering the entire group. A negative outcome for JB Hi-Fi could have significant ramifications for other retailers that sell extended warranties. Legal experts caution that retailers must ensure their extended or “extra-care” products provide real benefits beyond those already guaranteed by law. Failure to do so may result in allegations of misleading or unconscionable conduct under the ACL.
Retailers are also advised to ensure that their marketing, sales scripts, and disclosures clearly explain customers’ statutory rights and how any paid products differ from those rights. With millions of customers involved, the potential financial exposure for retailers could be enormous, emphasizing the importance of early risk assessment and strategic litigation planning.
The court’s denial of JB Hi-Fi’s request for a soft closure highlights the judiciary’s reluctance to limit large consumer groups prematurely. Legal experts suggest that courts may increasingly favor “lead-plaintiff plus sample members” trials to address essential issues, which will influence both the defense strategies and future group claims.
As the legal landscape for consumer rights continues to evolve, JB Hi-Fi’s case serves as a vital indicator for other retailers regarding the importance of transparency and genuine value in extended warranties. With group costs orders reaching as high as 30%, the financial stakes for retailers facing such claims are considerable, although some may have insurance to manage these risks. This case also signals to litigation funders and legal firms that pursuing large-scale consumer claims against major retailers remains a viable path forward.
