Earlier this month the federal government announced that it would examine the uptick in class actions and regulation third-party litigation funders. One of the objectives of the injury will be to assess how to ensure costs of class actions are proportionate to plaintiff interests.
“With class actions becoming more common in courts across Australia, the Turnbull government wants to ensure the costs of such proceedings are appropriate and proportionate and that the interests of plaintiffs and class members are protected,” Attorney-General Senator George Brandis QC said in a statement.
A similar inquiry is currently underway in Victoria by the state law reform commission.
Last week, IMF Bentham issued a statement responding to the review of the litigation funding industry to be undertaken by the Australian Law Reform Commission (ALRC).
“IMF Bentham is available to assist the ALRC Inquiry, however it can,” the litigation funder said.
The group, which identifies as a “pioneer” in the Australian class actions funding space, welcomed the prospect of creating a new regulatory regime for the industry.
“We believe ethics and transparency are key components of third-party funding,” the statement from IMF Bentham said.
“However, the industry now has a global footprint with many new entrants, and the costs of litigation are increasing. It is in everyone’s interests to ensure industry participants, including funders and legal service providers, meet best- practice standards so that the legal system can more readily dispense justice in an efficient and accessible manner.”
The group said that it was timely for the government to commission an inquiry into the industry, adding that a balanced, evidenced-based review provided Australia an opportunity to be a world-leader in regulating the litigation funder industry.
“[A regulatory regime] could be exported globally – another opportunity for Australia to innovate and lead the world in this sector,” the statement said.
The litigation funder said that for a number of years it had operated under ASIC’s licensing regime. It has also brought itself in line with conflict regulations and other procedures and laws which apply to it.
“IMF Bentham has been a constant and enthusiastic proponent of regulation in a measured and proportionate manner, endorsing the 2014 Productivity Commission’s recommendation to introduce minimum capital adequacy requirements.
“Over 16 years, IMF Bentham has returned on average 62 per cent of litigation proceeds ($1.3 billion in total) to our funded clients. Without third-party litigation funding, many of Australia’s most prominent cases would not have proceeded and justice would have been denied to thousands of ordinary Australians.”