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Ashurst offers take on ALRC recommendations
International law firm Ashurst has shared its position following last week’s hand down of recommendations from the Australian Law Reform Commission’s Inquiry into class actions and litigation funding.
Emma Musgrave
In a discussion paper penned on the firm’s website, partner John Pavlakis, senior associate James Clarke and senior expertise lawyer Andrew Westcott outlined key recommendations put forward by the ALRC as part of its Inquiry into Class Action Proceedings and Third Party Litigation Funders.
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Commenting broadly on the efforts made by the ALRC, the representatives of Ashurst said a review of the regulation of class actions and litigation funding has been both a worthwhile and timely exercise “given the significance of class actions to the litigation landscape and the number of important issues which still need to be resolved by the courts”.
“The recommendation that the Federal Court have exclusive jurisdiction for shareholder class actions is likely to be controversial. As noted in the report, many will feel that this would unnecessarily restrict litigant choice as to their dispute resolution forum,” the Ashurst employees wrote.
“The recently agreed Protocol for Communication and Cooperation Between Supreme Court of NSW and Federal Court of Australia in Class Action Proceedings seeks to address competing class actions across these jurisdictions (with similar arrangements likely to be considered by other states and territories with class action regimes).
“Conferral of exclusive jurisdiction to the Federal Court for actions brought under Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) is unlikely to be implemented.”
Further, Mr Pavlakis, Mr Clarke and Mr Westcott said the recommendation that only open class actions should be commenced is also likely to be seen as an “unnecessary restriction on litigant choice”.
The three noted that this will be particularly evident as closed classes enable group members to maintain control over the size and scope of the class action.
Lastly, Mr Pavlakis, Mr Clarke and Mr Westcott said the firm welcomes the proposal that parliament commission a review of the legal and economic impacts of continuous disclosure obligations and those relating to misleading and deceptive conduct.
“We agree with the ALRC that a thorough understanding of the ‘double-edged’ nature of these substantive provisions contained in the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) and how they underpin shareholder class actions is needed in order to consider whether their objectives are being achieved and whether reform is necessary,” they explained.
Slater and Gordon also offered its perspective on the recommendation roll-out last week, saying that they are “for the most part, sensible and measured”.
