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LCA responds to final report into litigation and class action industry
The Law Council of Australia has offered its thoughts on the highly anticipated final report into the litigation and class action industry in Australia.
Emma Musgrave
The final report was handed down on Tuesday, 22 December, citing 31 recommendations to implement to improve the current system.
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“The Law Council agrees in principle with a number of the 31 recommendations made in the Parliamentary Joint Committee on Corporations and Financial Services’ final report on Litigation Funding and the Regulation of the Class Action Industry in Australia,” said LCA president Pauline Wright.
“The Law Council fully supports the Committee’s view that the potential benefits of permitting contingency fee arrangements do not outweigh the risks.
“The Law Council is particularly pleased to see that the Committee has called for Government to legislate to address the lack of clarity in common fund orders, and we are keen to work with Government as part of this process.”
Ms Wright noted that the committee has supported the LCA’s call for the Federal Court to be given greater power to oversee class actions; “however, an over-reliance on the Federal Court, one that is currently overstretched and underfunded, is problematic.”
“Further resourcing of the Federal Court system is required, particularly if it is to have exclusive jurisdiction for Corporations Act 2001 or Australian Securities and Investments Commission (ASIC) matters,” Ms Wright explained.
While overall supportive of the report, Ms Wright acknowledged that the LCA “strong opposes” any further incursion into the regulation of Australian legal practitioners, as laid out in Recommendation 20, 21, 22 and 28.
“Legal practitioners are already among the most regulated professionals in the country. Class action litigation lawyers, whether they be solicitors in firms or barristers, are subject to more than usually intensive court oversight of their conduct,” she said.
“The Law Council supports the application of the Australian Financial Services Licence regime to funders and is keen to work with the Government, ASIC and industry to develop a regime that is more fit-for-purpose than the Managed Investment Scheme regime.”
