New rules bolster class actions in NSW
The ability of lawyers in NSW to charge an uplift of up to 25 per cent of fees on cases that are run on a ‘no win, no fee’ basis has resulted in the number of class actions rising in the state.
King & Wood Mallesons’ fifth annual class actions report, The Review: Class Actions in Australia 2015/16, revealed that at least 35 new class actions were filed in Australia in FY16, following a record high of 40 new class actions filed in FY15.
The report, which is co-authored by King & Wood Mallesons partners Moira Saville (pictured left) and Peta Stevenson (pictured right), revealed that of the 35 actions, 29 were filed in NSW, five in Victoria and one in Queensland.
The percentage of all cases that were filed in NSW rose dramatically from 58 per cent in FY15 to 83 per cent in FY16, which may be partly attributed to a change of rules surrounding uplift fees.
Since 1 July 2015, it has been possible for lawyers in NSW to charge an uplift of up to 25 per cent of fees where cases are run on a conditional or ‘no win no fee’ basis and are successful.
This was previously prohibited in New South Wales, while being allowed in other states such as Victoria.
“While we do not know if these 29 matters have a conditional fee arrangement, one can speculate that the ability to charge an uplift may be attracting a greater proportion of class actions to New South Wales as a jurisdiction,” Ms Saville said.
The report also suggests that the ability to charge an uplift provides an alternate funding model to third- party litigation funding.
“When used in combination with a product such as after the event insurance, this model of financing proceedings could make it viable to bring actions that a litigation funder might not be interested in,” the report said.
This suggestion is supported by the statistics in relation to litigation funding across the country.
While 100 per cent and 60 per cent of cases filed in Queensland and Victoria respectively were supported by litigation funders, just 38 per cent of cases filed in New South Wales received third-party funding.
“Of the 29 class actions filed in NSW in 2015-16, we are aware of only 12 being supported by litigation funding at filing. This could indicate a trend towards the use of an uplift in New South Wales cases,” the report said.