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Proposed reforms nothing but ‘scrappy vandalism against class actions’

Firms and legal organisations have welcomed delays in the proposed class action reform, following statements from Attorney-General Michaelia Cash confirming the reforms are not currently a priority.

user iconLauren Croft 10 February 2022 Politics
Proposed reforms nothing but ‘scrappy vandalism against class actions’
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Ahead of this year’s federal election, Ms Cash has confirmed the government will not pursue its agenda of weakening access to class actions, which would have seen funding sources for class actions dry up, making many potential actions unviable.

In October last year, Treasurer Josh Frydenberg and Attorney-General Michaelia Cash published a draft exposure bill that would, if enacted, cap returns to litigation funders to 30 per cent. The proposed bill would also mean that in the future, plaintiffs would need to provide written consent to be part of a funded class action and be liable to contribute to the funder’s fee. 

However, in a recent statement, the Attorney-General said these reforms were a lower priority – and that the government would instead focus on the Social Media (Anti-Trolling) Bill 2021 exposure draft and the Religious Discrimination Act.

 
 

“There is a very broad range of views among the crossbenchers and these do need to be taken into consideration,” she told the AFR.

“We don’t have the numbers in the Senate, so we need to negotiate ... I’ve pressed [through] harder legislation in a small period. Certainly, this is important for the government.

“In the first instance though, the online trolls and religious discrimination are two bills the Prime Minister is fundamentally committed to. The reality is, we are headed to an election and there is limited parliamentary time.”

Head of class actions at Shine Lawyers, Jan Saddler, said the decision to delay the reforms was “absolutely right” and a “win for all Australians who value fairness and access to justice for all”.

“In October 2021, the CT group conducted research on class actions which revealed that over eight in 10 Australians know what a class action is. Nearly all Australians say they would consider participation in a class action if they were impacted, particularly when they involve a bank or insurance industry. So often we hear our clients tell us that they join class actions out of a moral obligation to right wrongs and prevent that wrongdoing from harming another person,” she said.

“We have always held that the draft bill proposed by Michaelia Cash threatens to drastically limit funding options for class actions by banning common fund orders and reducing litigation funders’ return on investment. It would also significantly limit access to justice which only benefits the wrongdoer.”

Additionally, Ben Hardwick, head of class actions at Slater and Gordon Lawyers, said that the reforms should be abolished completely.

“We’re pleased the government will not pursue its agenda of weakening access to class actions ahead of this year’s federal election and call upon Ms Cash to permanently remove her government’s support for these proposed changes,” he said.

“Class actions are overwhelmingly a force for good and any responsible government should support them. Not only do they help everyday Australians obtain justice when they have been ripped off by big corporations and governments, they also keep the powerful looking over their shoulders, which is a good thing.”

The Keep Corporations Honest campaign has also urged the Attorney-General to discard the proposal – and Ms Saddler, also a KCH spokesperson, called the proposed reforms “scrappy vandalism against class actions”.

Small wonder that a broad spectrum of legal experts and community members vigorously opposed the proposals. Ms Cash’s attempts to vilify those taking part in class actions as either dupes or vexatious irritants was particularly offensive, she said. 

Our campaign is extremely pleased to see that the minister has been spooked off her destructive course of action — albeit temporarily. We now call on Ms Cash to formally and permanently remove her government’s support for these shambolic proposed class action changes.”