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‘Pointless, partisan’: Plaintiff firms slam litigation funding inquiry

Australia’s class action space is among the best in the world and Parliament should recognise this, say plaintiff firms.

user iconJerome Doraisamy 19 May 2020 Big Law
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Last week, Attorney-General Christian Porter announced his intention to proceed with the parliamentary inquiry into the impact of litigation funding on justice outcomes, exploring whether or not Australians “are receiving their fair share” from class action settlements and look at the “extraordinary profits being made by the booming litigation funding industry”.

Global litigation funder Omni Bridgeway welcomed the inquiry, but noted that only some of the criticism being levelled against funders is valid, with some such commentary being based on “misinformation”.

In conversation with Lawyers Weekly, Maurice Blackburn national head of class actions Andrew Watson went one step further, calling the parliamentary examination a “pointless, partisan inquiry which will be used by the government to further the agenda of big business and reduce accountability”.


“It is remarkable that the government is pursuing this inquiry when it has already delayed responding to the banking royal commission or regulating mortgage brokers, issues of far greater importance to the community,” he argued.

“The Productivity Commission, the Victorian Law Reform Commission and the Australian Law Reform Commission have already conducted exhaustive inquiries. Each praised Australia’s class action system for providing access to justice to people who would be otherwise locked out because of the cost of litigation. And the PC, VLRC and the ALRC found the system could be improved and even greater access to justice achieved through the introduction of contingency fees.

“The parliamentary joint committee is an inquiry designed to deliver [to] the government the answer it wants. The government and vested interests including the Australian Institute of Company Directors and the Australian Industry Group are working together, along with fellow travellers in the media, to deny access to justice to ordinary Australians.”

The COVID-19 crisis, Mr Watson continued, should not be cynically used by big business and the government to shield corporations from legitimate scrutiny or from being held to account for failures.

“Australia’s class action regime is one of the best in the world and is closely monitored by the courts,” he said.

Slater and Gordon Lawyers head of class actions Ben Hardwick expressed similar sentiments, noting it was “disappointed but not surprised” that the government is pressing ahead with the inquiry.

“Limiting the capacity of Australians to bring class actions has been a core advocacy goal of corporate Australia for some time now and we know they’ve been lobbying furiously for this inquiry. Of course, we’ve already had a number of similar inquiries, but we anticipate the business lobby will keep agitating for more until it gets the recommendations it’s looking for,” he told Lawyers Weekly.

The logic of the business lobby, Mr Hardwick continued, is that “if they can cut off funds, they cut off the risk of class actions”.

“Class actions are hugely expensive undertakings and although plaintiff firms can sometimes take cases on a no-win-no-fee basis, there’s a limit to how much risk can be carried by law firms. If litigation funding options are reduced, millions of Australians will be denied access to justice, because it will become less viable to commence class actions. Furthermore, corporate Australia will get a bright signal that the risk of being held accountable has been lifted,” he said.

Elsewhere, Shine Lawyers head of litigation and loss recovery Jan Saddler said her firm would welcome “any opportunity to enhance the outcomes” for clients and group members for class actions – to the extent that all stakeholders are heard.

“We are confident that Parliament will fully explore the pros and cons of this area of practice and recognise that class actions are the only way for people to take action to recover compensation when big business exploits the rights of everyday Australians, thereby endorsing this practice area as a meaningful and valuable pathway to justice for our clients and group members,” she said.

However, Parliament must, Ms Saddler noted, take the opportunity to hear from all stakeholders in class actions practices, including clients and group members.

“We anticipate that if that is the approach taken by Parliament then we expect a positive outcome for our clients and group members. If, however, Parliament were only to listen to, and take account of the interests of big business, then that would be a dreadful outcome for all Australians and for our country, as it would effectively be a green light to big businesses succeeding over the rights of all Australians,” she said.

Over the course of the inquiry, plaintiff firms will have to remember, Ms Saddler continued, that they represent the interests of those “who do not have the means for taking action against big business”.

“Put simply, if plaintiff lawyers don’t speak up now and support their clients in speaking up, then there is a significant risk that the voice of big business will be heard to the detriment of not only our clients and group members, but the entire community,” she concluded.

“Our clients and group member experiences are always heartbreaking, but even the voice of one client and one group [member] is more powerful and much stronger than the collective voice of big businesses, because big businesses’ objectives are all about profit, whereas our clients and group members are only concerned about what is right for their situation, and the greater good.”

Mr Hardwick supported this, noting it will be “contributing constructively” to the inquiry so the committee is well informed about what’s at stake. 

“We’re realistic that there are key minds on the conservative side of politics that have long been made up on this one. But we also know Australians are unlikely to take kindly to corporations being freed up from the risk of being held accountable, particularly given that a large number of class actions commenced over the last 18 months have arisen from revelations made during the banking royal commission,” the firm submitted.

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