Published on 22 August 2019 at 2:15pm
I INTRODUCTION
The Australian Law Reform Commission’s (‘ALRC’) recent Inquiry into Class Action Proceedings and Third-Party Litigation Funders has been a source of significant controversy among legal professionals and academics. Former President of the Law Council of Australia, Stuart Clark, heavily criticised the report as a great victory for plaintiff’s lawyers and litigation funders at the expense of consumers and the wider community.[1] The sheer impact of this argument is evident if one considers pt IVA of the Federal Court of Australia Act 1976 (Cth), which requires the Federal Court to protect the interests of all class members. Clark noted that it was ‘not surprising the government effectively buried the report’ by quietly releasing it on the last few days of the summer break and ensuring that ‘what little attention it received was quickly swamped by the release of the banking royal commission’s final report’.[2] Conversely, the head of class actions at Slater & Gordon, Ben Hardwick, maintains that some of the recommendations, such as contingency fees and the proposal to tender settlement administration, are ‘overwhelmingly in the interests of consumers’.[3]
This paper will analyse a number of the ALRC’s recommendations in order to determine whether the ALRC’s position is appropriate, having regard to the current legal framework governing class actions and litigation funders. It will consider the ALRC’s key recommendations in the areas of case management, settlement approval, regulation of litigation funders and solicitors’ fees. This paper will ultimately demonstrate that many of the ALRC’s recommendations have great merit but their failure to advocate for increased regulatory oversight and their support for percentage-based fee agreements are potentially dangerous outcomes in this highly profitable ‘growth industry’ of litigation.[4]
II CASE MANAGEMENT
Recommendation 1
‘Part IVA of the Federal Court of Australia Act 1976 (Cth) should be amended so that all representative proceedings are initiated as open class.’
The ALRC suggests that the class actions regime should be returned to its original design of initiating all class actions as open class in order to improve ‘access to justice by enabling all victims of a civil wrong to participate in the class action and not just those who take active steps to join’.[5] This would ideally protect vulnerable groups who are less likely to join a class action because they are unaware of the action or face barriers to providing consent.[6] During their confidential consultations, the ALRC was advised that class actions often result in less than half the prospective group members registering, which means that the majority of members are unregistered and therefore unable to participate in any settlement agreed at mediation.[7] Professor Michael Legg and Dr James Metzger explain that open class actions also result in ‘efficient use of judicial resources as one proceedings instead of many are processed by the Court system and all group members are bound by the outcome unless they affirmatively opt out’.[8]
However, open class actions do not necessarily provide for increased participation by vulnerable group members because the plaintiff law firm may engage clever drafting techniques to narrow the class and continue to exclude prospective members. Professor Vince Morabito points out that ‘determining whether all alleged victims of the impugned conduct have been included in the class action litigation is not as easy as one may think’.[9] He argues that prospective group members may still be excluded from participating in an open class where the statement of claim is ‘drafted in a manner that defines the class narrowly (examples include: listing all the claimants individually, bringing an action on behalf of members of a particular association or trade union, or limiting the actions to claimants with a minimum threshold loss or minimum purchase volume of a product).’[10] The ALRC addresses this concern by arguing that the Court has the discretion to determine whether the statement of claim reasonably defines the class or is cleverly crafted to practically require registration by prospective members in order for them to participate.[11] While this may be true, the ALRC’s aim of protecting vulnerable groups is undermined by this legal loophole that would effectively allow for the exclusion of many group members from class action proceedings.
The ALRC’s recommendation that all representative proceedings should be initiated as open class actions also arguably places too great an emphasis on the objective of enhancing access to justice with insufficient regard to the importance of avoiding conflicts of interest and ensuring a favourable outcome for all group members. It is true that open classes allow for the inclusion of a larger number of group members who are all bound by the outcome unless they affirmatively opt out, but the ALRC does not adequately consider how this inclusion may disadvantage members when the outcome of proceedings is unfavourable to them.[12] Following settlement or judgment in an open class action, all group members will have any future claims against the defendant(s) extinguished and this extinguishment, coupled with the limited involvement of group members in class actions proceedings, means that they may be disproportionately disadvantaged by the outcome of proceedings.[13]
The ALRC emphasises the importance of allowing group members to be included in a class action without being required to sign up with a lawyer or funder but there are benefits to compulsory sign up.[14] For example, closed classes provide greater control over the size and scope of the class action and provide members with an enhanced ‘right to prosecute their claims as they see fit’ by ‘maintaining control of the conduct of their claims on terms they have agreed’, such as negotiating better funding terms or choosing alternate legal counsel.[15] It ultimately also provides greater certainty as to the size of the class and improves the ability to manage any conflicts of interest, as, unlike in open class actions, the identities of all group members are known in closed classes so that informed consent to any conflicts may more easily be obtained.[16] However, the ALRC suggests that these obstacles can be overcome by implementing their second recommendation.
Recommendation 2
‘Part 15 of the Federal Court of Australia’s Class Actions Practice Note (GPN-CA) should be amended to provide criteria for when it is appropriate to order class closure during the course of a representative proceeding and the circumstances in which a class may be reopened.’
By providing the courts with criteria for when it is appropriate to order class closure and reopen a class, the ALRC aims to strike a careful balance ‘between facilitating the resolution of disputes through mediation and the development of a de-facto closed class regime at the point that the proceedings are prepared for mediation’.[17] The ALRC suggests that the court is certainly in the best position to strike this balance so that the needs of vulnerable groups are considered, especially those who are more likely to be excluded from settlement for failing to register but are still bound by settlement.[18] The ALRC also maintains that such criteria also has great potential to address the need for greater consistency in the approaches taken by the courts in deciding whether class closure prior to mediation will be final. [19]The criteria also aim to avoid additional delay, costs, uncertainty and minimise the potential for disputes about the terms of the orders.[20] A potential limitation of this recommendation is that it does not outline the criteria that should be provided to the courts, rather it simply suggests that such criteria is necessary.
More importantly, the ALRC are again undermining their goal of protecting vulnerable group members by allowing class closure. In fact, the ALRC concedes that ‘the concerns that arise with respect to class actions that are initiated as closed classes also apply to open classes that are subsequently closed to enable mediation’.[21] This leads one to consider what benefit would be gained from initiating all class actions as open class if the class could later be closed thereby excluding the very members the recommendation aims to protect. The ALRC also propose that the Court should retain the discretion to re-open only ‘where it is in the interests of justice’ and ‘the Practice Note should be amended to explain the criteria that the Court will ordinary apply to determine the limited circumstances where a Court will order a class to be reopened’.[22] Similar to their class closure recommendation, the ALRC do not offer an explanation as to what criteria should be applied in determining whether to re-open a class. The broad discretion afforded to the Court to close and re-open a class ultimately undermines the ALRC’s goal to protect vulnerable groups, as the aim of facilitating a successful mediation could lead to the development of a de-facto closed class regime at the mediation stage of proceedings.[23] It also has the potential to lead to increased costs, delay and uncertainty as well as waste limited judicial resources on repetitive interlocutory procedural processes.[24]
Recommendation 3
‘Part IVA of the Federal Court of Australia Act 1976 (Cth) should be amended to provide the Court with an express statutory power to make common fund orders on the application of the plaintiff or the Court’s own motion.’
Providing the Federal Court with the ability to make common fund orders would enhance access to justice for all members of a class by ensuring equal contributions are provided to the legal and litigation funding costs of the class action regardless of whether the group member signed a funding agreement.[25] In Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Limited, the Court allowed the third-party litigation funder to charge a reduced funding commission to the whole class and noted that this would improve access to justice because ‘if litigation funders are permitted to charge a commercially realistic but reasonable percentage funding commission to the whole class it is less likely that funders will seek to bring class actions limited to those persons who have signed a funding agreement.’[26]This effectively avoids the issue of ‘free riders’ who benefit from the outcome of proceedings but are not required to contribute to costs. It also encourages litigation funding of a broader range of matters that would typically not attract funding, such as medical product liability and small claims worth $30 million or less.[27]
The recent double decisions of the New South Wales Court of Appeal and the Full Court of the Federal Court of Australia confirmed the power of the Courts to make common fund orders. The Federal Court decision in Lenthall v Westpac Life Insurance Services Limited and the New South Wales Court of Appeal decision in Brewster v BMW Australia confirmed the legality and constitutionality of common fund orders.[28] The respondents in both cases argued that the Courts lacked power to make common fund orders because there is no relevant legislative or judicial power to make the order and the order would contravene s 51(xxxi) of the Australian Constitution, which prohibits the acquisition of property otherwise than on just terms.[29] Both Courts rejected all three of the respondents’ arguments but the Court of Appeal left open the possibility that common fund orders may be incompatible with the current legislative provisions governing class actions.[30] Consequently, there is still scope for implementation of the ALRC’s recommendation to create an express statutory power to make common fund orders.
A criticism of common fund orders is that they remove the necessity for book building and this has been argued to encourage competing class actions.[31] Book building is the process by which funders determine if there is sufficient interest in their funding proposal and is ultimately the ‘natural selection’ before any action is commenced.[32] The Victorian Bar indicates that common fund orders have stimulated an increase in competing class actions and a race to the courts, as they remove the need for book building and ‘remove the necessity to ensure that sufficient ‘book of loss has been “built” to ensure that the likely commission to the funders will justify the expense and risk of the litigation even absent a common fund order’.[33] However, in Lenthall v Westpac Life Insurance Services Limited, Lee J suggested that book building is unhelpful to the extent that it results in wasted costs, which are often detracted from the settlement sum, subsequently decreasing the amount of any settlement/judgment sums given to group members.[34] Moreover, the ALRC do not advocate making common fund orders compulsory, rather they limit their recommendation to creating an express statutory power to make common fund orders. In addition, the courts can effectively manage any fears relating to competing class actions, especially having regard to Recommendations 4 and 5.[35]
Recommendations 4 & 5
‘Part IVA of the Federal Court of Australia Act 1976 (Cth) should be amended to give the Court an express statutory power to resolve competing representative proceedings.’
‘In order to implement Recommendation 4, the Federal Court of Australia’s Class Actions Practice Note (GPN-CA) should be amended to provide a further case management procedure for competing class actions.’
Introducing an express statutory power for the courts to resolve competing representative proceedings would prevent any costs, delays and complexity associated with multiple proceedings.[36] The ALRC recommends the introduction of a presumption ‘that there will be only one class action with respect to a dispute, subject to judicial discretion’.[37] Competing class actions would be defined as ‘two or more class actions where there is a non-theoretical possibility that a person may be a class member of more than one class action, or two or more class actions with respect to the same dispute filed on behalf of different claimants’.[38] Anyone excluded from the class action would not lose their right to litigate individually.[39] Fashioning a single class action that is in the best interests of the class as a whole will be the primary objective of the Court and they ‘will have the broadest remit’ to enable them to do so.[40]
Chief Justice Allsop highlights that competing class actions undermine the very objective of the class actions regime, as ‘the running of multiple actions by different lawyers, with different funders was, in principle, potentially inimical to the administration of justice and, in particular, potentially inimical to the interests of group members, and potentially oppressive to [the respondent]’.[41] This is due to the considerable costs and delay associated with bringing multiple class actions with respect to the same matter or related matters.[42] Competing class actions are a rising issue in the industry because from 1992 to 2017, 513 class actions were commenced in relation to just 335 legal disputes.[43] The vast majority of these competing class actions involve shareholder and investor disputes or product liability.[44]
IMF Bentham argues that only allowing one class action would result in ‘hundreds or potentially thousands of separately commenced proceedings by individual group members’.[45] However, this criticism is unjustified to the extent that the high costs of litigation and the risk of adverse costs orders would ultimately dissuade individual litigation.[46]Maurice Blackburn suggests that the proposal would result in ‘a winner-takes-all contest at the very threshold of a case, when only limited substantive information may be available’ and that ‘judicial selection amongst competing class actions would focus on costs to the exclusion of class members’ preferences with respect to funder, lawyer and case theory’.[47]It is true that the competition to run a class action could reduce costs by encouraging firms to convince the Court that they have the best offer.[48] However, this does not necessarily mean that there will be a ‘focus on costs’ because the selection process for choosing a single action under Recommendation 5 aims to take into account the group members’ preferences and the quality of the proposed legal representation.[49]
In any case, the Court will retain the discretion not to stay the competing class actions in rare cases where; there is minimal overlap, the multiple issues in dispute cannot be dealt with by sub classes, or ‘other complexities arise so that it would not be efficient or desirable from the point of view of justice to consolidate’. [50] Professor Morabito disagreed with retaining this discretion and raised the following question, ‘what is the point in “imposing” on our federal class action judges a requirement that they choose between competing class actions but, at the same time, allowing them to disregard this directive if such a step is in the interests of justice?’[51] However, the ALRC address this concern, by indicating that the default position of a single class action would remain and the standard for invoking the exception will be stringent such that there will be ‘little incentive for law firms and litigation funders to pursue the exception’.[52]
III SETTLEMENT APPROVAL
Recommendation 8
‘Part 15 of the Federal Court of Australia’s Class Actions Practice Note (GPN-CA) should include a clause that the Court may appoint a referee to assess the reasonableness of legal costs charged in a representative proceeding prior to settlement approval.’
Appointing a referee to assess legal costs is arguably a highly effective means of preventing conscious or unconscious bias in the preparation of reports relating to the reasonableness of the costs charged.[53] A recent report by the Victorian Law Reform Commission (‘VLRC’) also encouraged the use of costs experts appointed by the Court.[54]As the VLRC observes, the Courts will not reject expert evidence ‘without very good reason’ and this great reliance on the expertise of costs experts ultimately ‘underscores the need for the assessments they give to be accurate and free of bias’.[55] The current regime allows lawyers to choose their own independent expert but this increases the possibility for conflict where lawyers tactically select only those experts that will assess their costs as reasonable. In fact, Murphy J points to the possibility that such experts are ‘likely to suffer from bias such as to be “tame” experts’ because the firm of solicitors engaging the expert is ‘in reality, acting for itself in seeking that its costs be approved’.[56]
Adversarial and selection bias in this context is not a new phenomenon, as ‘more than 140 years ago the Master of the Rolls, Sir George Jessel, commented on the tendency of expert witnesses to take on the views of those that regularly instruct them’.[57] Justice Lee has gone so far as to describe these independent expert reports as ‘next to useless’ because they will rarely, if ever, indicate that the fees charged were unreasonable.[58] These reports are also unlikely to be subject to any challenge by the defendant’s solicitors, whose interests align with the plaintiff’s solicitors at settlement, and the courts are unlikely to challenge the reports due to the delay and additional costs involved, which will ultimately reduce the settlement sum provided to group members.[59] Moreover, ‘no group member has the wherewithal to be able to challenge an independent costs expert’.[60] Therefore, costs experts are ultimately ineffective to the extent that they do not provide any real adjustments to legal costs in class actions.[61]
Although the Federal Court already has the power to appoint a referee pursuant to s 54A of the Federal Court of Australia Act 1976 (Cth), the ALRC’s recommendation of formalizing referral in the Federal Courts’ Practice Note would not be ‘unnecessary’ if it serves to encourage greater use of referees such that it becomes regular practice to use referees.[62] However, the use of referees might be inappropriate in some cases and it will ultimately be the duty of the Court to ascertain whether the cost of appointing a referee ‘is proportionate to the costs claimed and the amount that might potentially be saved’.[63] The Court must be very careful to avoid incurring unnecessary additional costs, which will inevitably reduce the settlement fund and disadvantage class members.[64] Therefore, the ALRC was correct to emphasize that the appointment of a referee remains a discretionary power that may be adopted by the Court ‘at the beginning of proceedings, at settlement approval, or not at all, as the case and Court determines’.[65]
Although the ALRC did not advocate ongoing cost assessment, they did acknowledge that some stakeholders supported the suggestion proposed in Perera v Getswift Limited that the Court ‘should, in appropriate cases, appoint a referee to conduct periodic reviews of the reasonableness of legal costs’.[66] Periodic costs assessment has been criticized for causing additional costs, undue delay and even described as an unnecessary measure where litigation funders already supervise solicitors acting in the class action.[67] However, the provision of interim reports by the referee could be financially beneficial to group members where the reports detect the incurring of unnecessary costs by solicitors and address these costs at an early stage.[68]
Litigation funders, particularly IMF Bentham and Therium, have even suggested that assessment of legal costs should not be limited to the plaintiff’s solicitors but should extend to the defendant’s solicitors as well.[69] IMF Bentham argued that the ALRC should adopt a similar approach to the UK such that the Court supervises the legal budgeting for both parties, ‘with budgets for all parties being set at the outset of the litigation, revisions to them requiring Court approval and costs incurred in excess of the approved budget being unrecoverable’.[70] The ALRC noted that they did ‘not recommend legal budgeting at this time, although submitting a budget to the Court may become a concomitant requirement of the Court to the appointment of an ongoing cost referee’.[71] The ALRC was wise to avoid any outright rejection of legal budgeting, as it may be beneficial to group members where it reduces the ultimate financial impact of the class action as a whole and also prevents tactical behaviour by the defendants to increase the plaintiff’s costs and delay or hinder the resolution of the underlying issue.[72]
Recommendation 9
‘Part 15 of the Federal Court of Australia’s Class Actions Practice Note (GPN-CA) should include a clause that the Court may tender settlement administration, and include processes that the Court may adopt when tendering settlement administration.’
Tendering settlement administration is one method of ensuring the ‘just, quick and cheap resolution of the real issues in the proceedings’ but it is not always the most effective method.[73] The ALRC emphasises the significance of settlement administration costs, by highlighting that the cost of administering payments to group members is removed from the settlement fund, so the process of settlement distribution should be ‘both accurate in terms of the payment to individual group members and the lowest (and quickest) cost method of distributing those proceeds’.[74] Although the costs of settlement administration are usually around three per cent of the total settlement sum, there have been cases where the costs were as high as five or even seven per cent.[75] The costs to administer settlement funds will be greater in cases where there is increased difficulty in evaluating and distributing the sum among group members.[76] Professor Legg and Dr Metzger have highlighted the contrast between the cost of administration settlements in shareholder class actions, which range from $250,000 to $600,000, and personal injury class actions, which often exceed $3 million and can even amount to as much as $30 million.[77]
Tendering settlement administration is certainly not always appropriate but the ALRC demonstrates that it may assist in some cases to reduce costs and improve efficiency, by prompting law firms to ‘refine their practices in response to a competitive tendering system’.[78] Other entities, such as accounting firms or specialist claims management firms, could conduct settlement administration at a lower cost but the plaintiff law firm might still be a more suitable option, especially in small class actions where the plaintiff’s lawyers have proven their efficiency in conducting the applicant’s case.[79] However, Lee J has stressed that ‘[i]f a notion exists among those conducting Part IVA work that solicitors for applicants will somehow automatically become scheme administrators, the time has come for that notion to be exploded’.[80] Even if that notion were exploded, Maurice Blackburn emphasises that it is still important to place emphasis on the expertise of scheme administrators in order to ‘guard against the superficial allure of a cheap quote at the expense of genuine capability to perform the work’.[81]
The Federal Court already has power to tender settlement administration but the Practice Note makes little reference to the process for administration, as cls 14.5(d) and 14.6 only require the Court to be advised of ‘the means of distributing settlement funds’ and the progress and costs incurred in distributing settlement.[82] Although a formalized tender process could contribute to reduced costs and improved efficiency, there is a possibility that these benefits would be undermined by the delays and costs associated with requiring the Court to involve itself in the assessment of tenders.[83] The Supreme Court of Victoria suggests that the tender of settlement administration might be outside of the court’s expertise and noted that ‘[o]f particular concern to the Court is that ultimately its role remains a judicial one’.[84] As the Law Council of Australia noted, these concerns could be addressed by allowing the tender process to be run by ‘the judge who is conducting the settlement approval hearing, a registrar, or a court-appointed expert who provides the judge with a recommendation’.[85] Direct judicial oversight of the tender process is not always appropriate and the ALRC was correct to propose that the Practice Note should outline ‘a process by which to delegate the tender process to a registrar of the Court’.[86]
It is important that any clause included in the Practice Note emphasizes that the tender of settlement administration, and whether the tender is delegated, is ultimately at the discretion of the Federal Court.[87] It was appropriate for the ALRC to resist pressure from a number of Australian healthcare companies and businesses that argued in favour of altogether prohibiting lawyers from administering settlement.[88] While it must be accepted that the hourly rate of some plaintiff lawyers greatly increases overall administration costs, these costs might often be balanced by the increased fairness and efficiency that results from plaintiff law firms administering settlement funds.[89] For example, in cases involving independent assessment of group members, it is often more appropriate for the plaintiff law firm to administer settlement funds.
In Wotton v State of Queensland (No 10), Murphy J pointed out that on the facts of that case, it was ‘preferable that the scheme administrator have a close familiarity with the subject matter of the proceeding and class members’ claims so that the claims can be assessed and finalized as quickly as possible’.[90] Justice Murphy held that the applicants’ solicitors not only had ‘a detailed and nuanced understanding of class members’ claims’ but they also ‘earned the trust of a great number of class members’ thus appointing the applicants’ solicitors as scheme administrators would increase the fairness and efficiency of settlement distribution as well as reduce the likelihood of review applications.[91] In Liverpool City Council v McGraw-Hill Financial, Lee J acknowledged that the plaintiff law firm would be the most appropriate scheme administrator but also made orders to ‘ensure that the costs incurred in relation to the administration of the settlement are also the subject of scrutiny by the referee before payment’.[92] Although involving a referee would incur additional costs, referee costs may be justified where they are ‘proportionate to the costs claimed and the amount that might potentially be saved’.[93] Therefore, there are certainly benefits to the ALRC allowing the Federal Court to maintain their discretion in determining whether to tender settlement administration or adopt another method more suited to the facts of the class action before them.
IV REGULATION OF LITIGATION FUNDERS
Recommendation 14
‘Part IVA of the Federal Court of Australia Act 1976 (Cth) should be amended to provide that:
- third-party litigation funding agreements with respect to representative proceedings are enforceable only with the approval of the Court;
- the Court has an express statutory power to reject, vary, or amend the terms of such third-party litigation funding agreements;
- third-party litigation funding agreements with respect to representative proceedings must provide expressly for a complete indemnity in favour of the representative plaintiff against an adverse costs order; and
- Australian law governs any such third-party litigation funding agreement the funder submits irrevocably to the jurisdiction of the Court.’
The ALRC’s rejection of the push to subject litigation funders to additional regulation is a key point of controversy. Litigation funders are presently exempt from financial services licensing if they have necessary processes in place to manage any conflicts of interest.[94] The Federal Government observed that the ‘wide range of requirements…such as registration, licensing, conduct and disclosure requirements…are not appropriate for litigation funding schemes’ and stressed that their main objective was ‘to ensure that consumers do not lose this important means of obtaining access to the justice system’.[95] Consumers are currently afforded some protection under other legislative instruments, such as protection under the Australian Securities and Investments Commission Act 2001 (Cth) from unconscionable conduct and misleading or deceptive conduct by litigation funders.[96] Third-party litigation funders are also subject to regulatory oversight by the courts on a case-by-case basis, as litigation funding agreements and the lawyer’s costs agreement must be disclosed to the Court.[97] The ALRC pointed out that ‘the courts do scrutinize the funding agreement in detail’.[98]
Despite existing regulation, there has been significant pressure for litigation funders to be subject to a licensing regime, especially to improve the regulation of capital adequacy and improve disclosure to consumers. In their Discussion Paper, the ALRC proposed that litigation funders should be subject to a licensing regime requiring all third-party funders to provide their services ‘efficiently, honestly and fairly’ and be subject to an annual audit in order to ‘reduce the risk of financial loss to plaintiffs and respondents…encourage compliance by litigation funders with their obligations…protect the integrity of the class action system’.[99] This proposal reflected earlier proposals of the Productivity Commission and the Victorian Law Reform Commission who recommended stronger regulation and supervision of litigation funders, with the Productivity Commission arguing in favour of a licensing regime to ensure funders ‘hold adequate capital...properly inform clients of relevant obligations’ and ultimately ‘provide some assurance that funders will follow through on financial promises’.[100] The proposal was also supported by Professor Legg and Dr Metzger, who argued that a ‘mandatory licensing regime is long overdue in Australia’.[101] The Australian Bar Association similarly suggested that ‘the time has now come for the introduction of a formal licensing regime to ensure and supervise appropriate standards’.[102] The need for licensing has become increasingly significant with the growing number of foreign-based funders with undisclosed capital and skills entering the Australian funding market.[103]
The Australian Securities and Investment Commission (‘ASIC’) suggested that the security for costs regime ‘is a more targeted and effective way to address the risk that a litigation funder will not have adequate resources to meet an adverse cost order’.[104] However, security for costs is arguably an insufficient means of insuring against financial loss because these orders are usually made in the early stages of proceedings when future costs are unclear, the amount of security is often considerably less than the costs incurred by the respondent and there remains a possibility that the respondent may be unsuccessful in obtaining the order for security.[105] The Productivity Commission also noted that courts are not well equipped to supervise the capital adequacy of litigation funders.[106]
In their submission to the ALRC, ASIC emphasized that financial services licensee requirements ‘are not intended to address the risk of an adverse costs order’.[107] Professor Tarr also highlights that there are ‘very significant limitations’ of the current licensing scheme which have ‘resulted in substantial losses’.[108] These limitations have been further illuminated by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry which, as the ALRC noted, ‘set out in great detail the failures of the Australia [sic] financial services licensing regime to protect consumers of financial services in a meaningful way’.[109] The ALRC rightly pointed out that if they were to recommend financial services licensing, they would be doing so ‘in the context of significant criticism of not just the regulator but the regulator’s enforcement framework’ and ‘in circumstances where the existing licensing regime has been revealed to have manifest limitations and is likely to be subject to a protracted process of reform’.[110] The ALRC’s position is strengthened by ASIC’s observation that ‘given ASIC’s risk-based approach to regulation, it seems unlikely such an area would be a main focus of our work even if we had jurisdiction for it’.[111]
Although these statements suggest that there is certainly good reason to cast doubt over ASIC’s capacity to enforce a licensing regime, the ALRC’s conclusion is particularly surprising because the implementation of a licensing regime was initially described by the Attorney-General Christian Porter as ‘one of the less contentious proposals…most people view it as a sensible approach’.[112] In fact, the ALRC acknowledged that ‘the majority of submissions to the Discussion Paper were in favour of licensing third-party litigation funders’.[113] Given this background, the ALRC did not sufficiently justify their change of position, as the mere reference to increased regulatory costs of imposing a licensing regime and ASIC’s questionable enforcement capabilities is arguably an insufficient reason to disregard the opinions expressed in the majority of submissions.
The ALRC’s recommendations to increase court supervision of litigation funders, such as creating a statutory presumption that funders will provide security and requiring court approval of litigation funding agreements, provide consumers with some increased protection but also allow litigation funders to continue to operate without sufficient prudential regulation.[114] As Stuart Clark highlights, ‘rather than recommend strong oversight and the effective regulation of the litigation-funding industry, the ALRC has chosen to leave the task of protecting consumers to the plaintiffs’ lawyers, the intermediaries, who rely on the funders to pay their fees and to the Federal Court’.[115] The impact of this lack of external regulation is arguably demonstrated in the announcement of litigation funder LCM to invest $100 million this year in Australasian legal disputes, which is a ‘43 per cent increase on the company’s $70m global commitment to litigation last year’.[116] This announcement came soon after the ALRC’s report was released.[117] The ALRC’s decision to reject licensing of litigation funders is particularly concerning in light of the considerable wealth that litigation funders are investing in the Australian litigation market. Ultimately, the ALRC report required a more detailed explanation of why they considered a licensing regime to be disproportionate and unlikely to prevent wrongdoing.
V SOLICITORS’ FEES
Recommendation 17
‘Confined to solicitors acting for the representative plaintiff in representative proceedings, statutes regulating the legal profession should permit solicitors to enter into ‘percentage-based fee agreements.
The following limitations should apply:
- an action that is funded through a percentage-based fee agreement cannot also be directly funded by a litigation funder or another funding entity which is also charging on a contingent basis;
- a percentage-based fee cannot be recovered in addition to professional fees for legal services charges on a time-cost basis; and
- solicitors who enter into a percentage-based fee agreement must advance the costs of disbursements, and account for such costs within the percentage- based fee’.
Lifting the ban on contingency fees theoretically has the potential to increase access to justice for future group members of small to medium-sized class actions, but it also has great potential to propel ‘Australia towards a US-style litigation environment driven more directly by financial return than merit’.[118] Lifting the ban could provide plaintiff law firms with extra incentives to aggressively pursue unmeritorious class actions. This concern is not unfounded, as the large number of unmeritorious class actions brought in England and Wales resulted in the banning of contingency fee arrangements for certain consumer law collective actions.[119] It could also exacerbate conflicts of interest by encouraging plaintiff lawyers to recommend the acceptance of settlement offers for the financial gain of the law firm, rather than the benefit to group members.[120] The NSW Bar Association warned that percentage-based fees have potential to diminish respect for legal practitioners, treat the practice of law as a business not a profession, compromise lawyers’ professional duties and ‘expose the entire legal profession to serious and sustained criticism as being driven by venal motivation’.[121] Jason Betts neatly summarized the position in his statement that ‘[t]he risk is obvious…this enormous financial incentive will cause contingency fee lawyers to explore claims at the margin of quality and merit’.[122]
The VLRC and ALRC argue that lifting the prohibition on contingency fee arrangements may enable solicitors (at least in the larger firms) to be compensated for costs and for carrying the risk of adverse costs orders, enabling more financially marginal but otherwise meritorious cases to proceed.[123] However, it is very difficult to see the financial motive associated with percentage-based fees persuading lawyers to pursue small claims with minimal potential damages.[124] The US Chamber Institute for Legal Reform also pointed out that plaintiff law firms will only take on cases they can win.[125] This is evident in the present practices of third party litigation funders who charge contingency fees but almost exclusively pursue high-value shareholder class actions, rather than meritorious low-value claims on behalf of disadvantaged persons.[126] Therefore, contrary to the ALRC and VLRC’s arguments, it appears that contingency fee arrangements will not necessarily encourage lawyers to accept public interest cases.
The most notable benefit of lifting the ban is that group members will be afforded higher returns where the action does not involve third party litigation funders.[127] However, even this benefit is uncertain because there remains a possibility that contingency fees could be greater than traditional time-based billings, and that group members could be in a worse situation than the current tripartite agreements.[128] As the VLRC noted, the costs reduction resulting from lifting the ban on contingency fees ultimately depends on the ‘size of the law firm and the size of the claim’.[129] As lawyers on contingency fee arrangements would be assuming the same risks and costs as litigation funders, there is no reason why their financial modeling would not reflect similar rates as those adopted in the litigation funding industry.[130] It has also been argued that any financial advantages of unfunded class actions are undermined by the potential disadvantages associated with eliminating the ‘protective role’ of litigation funders and thereby increasing the possibility for conflicts of interest.[131] However, this argument is limited to the extent that the existing regulations of solicitors are sufficient to prevent misconduct in contingency fee arrangements and the very nature of these arrangements would inevitably encourage plaintiff lawyers to achieve the highest value recovery for their clients.[132]
Recommendation 19
‘Part IVA of the Federal Court of Australia Act 1976 (Cth) should be amended to provide that:
percentage-based fee agreements in representative proceedings are permitted only with leave of the Court; and
- the Court has an express statutory power to reject, vary, or amend the terms of such percentage-based fee agreements.’
The ALRC suggests that the concerns relating to ‘proper use…“windfalls” for solicitors and the related possibility that group members may be disadvantaged’ could all be avoided by the concomitant recommendation that contingency fee agreements are only valid with leave from the Federal Court.[133] The ALRC recommends that leave should be sought at the start of the proceedings, preferably at the first case management hearing, and may be reassessed at settlement.[134] The Federal Court could adopt a method similar to their determination of the reasonableness of time-based legal fees and disbursements at settlement, by having regard to ‘the nature of the work performed, the time taken to perform the work, the seniority of the persons undertaking that work and the appropriateness of the charge out rates for those individuals’.[135]
Court oversight would result in additional costs of having the approval application brought and determined but these costs would ultimately be outweighed by the benefit of increased consumer protection, including the minimization of potential for conflict and avoidance of law firms charging disproportionate fees.[136] Johnson, Winter and Slattery argue that the Federal Court should not be given the power to make late changes to a contingency fee percentage, as this could create a ‘significant commercial risk for mid-tier law firms’.[137] However, the ALRC’s recommendation that the Court be allowed to reassess percentage-based fee agreements before they become binding on group members is not only consistent with the Court’s supervisory role but also further strengthens their role to protect class members.[138] Despite these benefits, it should be noted that the requirement for court approval by no means addresses the ALRC’s underlying aim to encourage the pursuit of meritorious low-value class actions.
VI CONCLUSION
The ALRC’s proposed class actions reforms have resulted in both evolutionary and revolutionary proposals. The ALRC’s proposals to create express statutory powers to make common fund orders and to resolve competing representative proceedings are largely evolutionary, as the Federal Court has already been developing practices, through the jurisprudence, to resolve the adverse consequences resulting from free riders and competing class actions. Their recommendation to amend the Practice Note to allow for appointment of referees and tendering of settlement administration is also largely evolutionary. Conversely, their recommendation to lift the ban on contingency fees is entirely revolutionary, as it presents a significant contrast to the traditional time-based billings adopted by most law firms. As with all revolutionary suggestions, there are great dangers associated with lifting the ban and extreme caution must be taken to ensure that the integrity of the legal profession and the class actions regime is not jeopardised by implementing this recommendation. The ALRC’s dramatic change of position relating to the licensing of litigation funders was also an unexpected development with potentially far-reaching consequences for the largely unregulated litigation funding industry and the class actions industry more broadly, as international funders are encouraged to invest in a poorly regulated Australian market. The recommendation to initiate all class actions as open class is also highly questionable, given the fact that it does not seem to further the ALRC’s aim of protecting vulnerable group members. Ultimately, it appears that Stuart Clark was correct in his assertion that the ALRC’s class actions reforms was a victory for litigation funders and plaintiff law firms who ‘hit the jackpot at the expense of consumers’.[139]
[1] Stuart Clark, ‘Litigation funders hit the jackpot at the expense of consumers’, The Australian (online), 8 March 2019 <https://www.theaustralian.com.au/business/legal-affairs/litigation-funders-hit-the-jackpot-at-the-expense-of-consumers/news-story/0219c006ff1f4b3c32c157407d491a6b>. [2] Ibid. [3] Michael Pelly, ‘New Report aims to stop consumers being “ripped off” by class actions’, The Financial Review (online), 25 January 2019 <https://www.afr.com/business/legal/new-report-aims-to-stop-consumers-being-ripped-off-by-class-actions-20190125-h1agy7>. [4] Ibid. [5] Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, Report No 134 (2018) 89. [6] Australian Law Reform Commission, Grouped Proceedings in the Federal Court, Report No 46 (1988) [107]. [7] Australian Law Reform Commission, above n 5, 95. [8] Michael Legg and James Metzger, Submission No 12 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 27 July 2018, 18. [9] Vince Morabito, ‘Closed Class Actions, Open Class Actions and Access to Justice’ (Seventh Empirical Research Report, October 2018) 9. [10] Ibid 11. [11] Australian Law Reform Commission, above n 5, 94. [12] Federal Court of Australia Act 1976 (Cth) s 33ZB. [13] Simone Degeling and Michael Legg, ‘Class Action Settlements Opt-Out and Class Closure: Fiduciary Conflicts’ (2017) 11 Journal of Equity 319, 342. [14] Australian Law Reform Commission, above n 5, 94. [15] Phi Finney McDonald, Submission No 34 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018, 15-16; IMF Bentham Limited, Submission No 50 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 6 August 2018, 21. [16] Degeling and Legg, above n 13; Federal Court of Australia Act 1976 (Cth) ss 33A, 33H. [17] Australian Law Reform Commission, above n 5, 95. [18] Ibid. [19] MinterEllison, Submission No 45 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018, 19. [20] Ibid. [21] Australian Law Reform Commission, above n 5, 95. [22] Australian Law Reform Commission, above n 5, 96. [23] Ibid 95. [24] Ibid 96. [25] Ibid. [26] Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Limited (2016) 245 FCR 191 [205]. [27] Shine Lawyers, Submission No 43 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018, 3.11. [28] Westpac Banking Corporation v Lenthall [2019] FCAFC 34 (1 March 2019); Brewster v BMW Australia [2019] NSWCA 35 (1 March 2019). [29] Westpac Banking Corporation v Lenthall [2019] FCAFC 34 (1 March 2019) [29]-[30]; Brewster v BMW Australia [2019] NSWCA 35 (1 March 2019) [11]. [30] Westpac Banking Corporation v Lenthall [2019] FCAFC 34 (1 March 2019) [137]; Brewster v BMW Australia [2019] NSWCA 35 (1 March 2019) [60]-[63], [117]. [31] Law Council of Australia, Submission No 62 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 17 August 2018, 35-6. [32] Ibid. [33] Ibid. [34] Lenthall v Westpac Life Insurance Services Limited [2018] FCA 1422 [34] (Lee J). [35] Australian Law Reform Commission, above n 5, 99. [36] Ibid 108. [37] Ibid 107. [38] Ibid 111. [39] Ibid 112. [40] Ibid. [41] Wileypark Pty Ltd v AMP Limited [2018] FCAFC 143 [2] (Allsop CJ). [42] Vicki Waye and Vince Morabito, ‘When Pragmatism Leads to Unintended Consequences: A Critique of Australia’s Unique Closed Class Regime’ (2018) 19 Theoretical Inquiries in Law 303, 309. [43] Vince Morabito, ‘The First Twenty-Five Years of Class Actions in Australia: An Empirical Study of Australia’s Class Action Regimes, Fifth Report’ (July 2017). [44] Australian Law Reform Commission, above n 5, 103. [45] IMF Bentham Limited, above n 15, 21. [46] Australian Law Reform Commission, above n 5, 109. [47] Maurice Blackburn, Submission No 37 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, July 2018, 42. [48] Australian Law Reform Commission, above n 5, 109-110; see also Emma Ryan, ‘No win-no fee: Maurice Blackburn slashes AMP class action commission’, Lawyers Weekly (online), 16 May 2018 <https://www.lawyersweekly.com.au/biglaw/23244-no-win-no-fee-maurice-blackburn-slashes-amp-class-action-commission>. [49] Australian Law Reform Commission, above n 5, 110. [50] Australian Law Reform Commission, above n 5, 112. [51] Vince Morabito, ‘Competing class actions and comparative perspectives on the volume of class action litigation in Australia’ (Research Report, 11 July 2018) 20. [52] Australian Law Reform Commission, above n 5, 113. [53] Ibid 140. [54] Victorian Law Reform Commission, Access to Justice—Litigation Funding and Group Proceedings (2018) 126. [55] Ibid. [56] Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527 [113], [116] (per Murphy J). [57] Ibid. [58] Lifeplan Australia Friendly Society Limited v S&P Global Inc (Formerly McGraw-Hill Financial, Inc) (A Company Incorporated in New York) [2018] FCA 379 [40]. [59] Australian Law Reform Commission, above n 5, 138. [60] Simone Degeling, Michael Legg and James Metzger, Submission No 9 to Victorian Law Reform Commission, Access to Justice—Litigation Funding and Group Proceedings, 22 September 2017, 11. [61] Ibid 15. [62] Australian Law Reform Commission, above n 5, 139. [63] Ibid 140. [64] Ibid. [65] Ibid. [66] Ibid; Perera v GetSwift Limited [2018] FCA 732 [226]-[229]. [67] IMF Bentham, above n 15, 24. [68] Perera v GetSwift Limited [2018] FCA 732 [228]. [69] IMF Bentham, above n 15, 24. [70] Ibid. [71] Australian Law Reform Commission, above n 5, 140. [72] IMF Bentham, above n 15, 24. [73] Civil Procedure Act 2005 (NSW) s 56. [74] Australian Law Reform Commission, above n 5, 141; Michael Legg, ‘Class Action Settlement Distribution in Australia: Compensation on the Merits or Rough Justice?’ (2016) 16 Macquarie Law Journal 89. [75] Gray v Cash Converters International Limited (No 2) [2015] FCA 1109; Wotton v State of Queensland (No 10) [2018] FCA 915. [76] Australian Law Reform Commission, above n 5, 141. [77] Ibid; Legg and Metzger, above n 8, 23. [78] Australian Law Reform Commission, above n 10, 144. [79] Lifeplan Australia Friendly Society Limited v S&P Global Inc (Formerly McGraw-Hill Financial, Inc) (A Company Incorporated in New York) [2018] FCA 379 [52]-[54]; Australian Law Reform Commission, above n 5, 143. [80] Ibid. [81] Maurice Blackburn, above n 47, 59. [82] Australian Law Reform Commission, above n 5, 146. [83] Ibid 144. [84] Supreme Court of Victoria, Submission No 41 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, July 2018, 9. [85] Australian Law Reform Commission, above n 5, 145. [86] Ibid 146. [87] See for example Legg and Metzger, above n 8. [88] Australian Law Reform Commission, above n 5, 143; Healthcare Companies and Businesses Group, Submission No 63 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 17 August 2018, 15. [89] See for example Slater and Gordon, Submission No 54 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, August 2018; Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Ltd (2016) 245 FCR 191 [149]. [90] [2018] FCA 915 [42], [50]; Australian Law Reform Commission, above n 5, 142. [91] Ibid. [92] [2018] FCA 1289 [77]. [93] Australian Law Reform Commission, above n 5, 140. [94] Corporations Regulation 2001 (Cth) reg 7.6.01AB. [95] Explanatory Statement, Corporations Regulation 2001 (Cth) 2012 No 172, 1. [96] Australian Securities and Investments Commission Act 2001 (Cth) ss 12BF-12BM, 12CA-12CC, 12DA, 12DF, 12ED. [97] Federal Court of Australia, Class Actions Practice Note (GPN-CA) (2016) cl 5. [98] Australian Law Reform Commission, above n 5, 156. [99] Australian Law Reform Commission, Inquiry into Class Action Proceedings and Third-Party Litigation Funders, Discussion Paper No 85 (2018), proposals 3-1 and 3-2; 49 [3.23]. [100] Productivity Commission, Access to Justice Arrangements, Report No 72, vol 2 (2014) 601, rec 18.2; Victorian Law Reform Commission, above n 54, rec 2. [101] Legg and Metzger, above n 8. [102] Australian Bar Association, Submission No 69 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 20 August 2018, 4. [103] See for example IMF Bentham, above n 15, 12. [104] Australian Securities and Investments Commission, Submission No 72 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, September 2018, 15. [105] MinterEllison, above n 19, 7-8. [106] Productivity Commission, above n 100, 630-631. [107] Australian Securities and Investments Commission, above n 104. [108] JA Tarr, Submission No 5 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 19 July 2018, 4. [109] Commonwealth of Australia, Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Interim Report (September 2018); Australian Law Reform Commission, above n 5, 162. [110] Australian Law Reform Commission, above n 5, 162. [111] Australian Securities and Investment Commission, above n 104, 18. [112] Michael Pelly, ‘Litigation Funding Licenses “sensible”: Attorney-General Christian Porter’, The Australian Financial Review (online), 17 June 2018 <https://www.afr.com/business/legal/class-actions-litigation-funding-licences-sensible-says-attorneygeneral-christian-porter-20180615-h11fx2>. [113] Australian Law Reform Commission, above n 5, 158. [114] See Australian Law Reform Commission, above n 5, Recommendations 11-16. [115] Clark, above n 1. [116] Chris Merritt, ‘LCM pours $100m into “growth industry” of litigation’, The Australian (online), 12 March 2019 <https://www.theaustralian.com.au/business/legal-affairs/lcm-pours-100m-into-growth-industry-of-litigation/news-story/31e7868f7d3829214dd4935008cf75d0>. [117] Ibid. [118] Jason Betts, ‘Why giving lawyers a profit motive won’t help the system’s neediest’, ABC News (online), 29 June 2018 <https://www.abc.net.au/news/2018-06-29/no-fee-lawyers-group-action-shine-slater-gordon/9913858>. [119] See Department for Business, ‘Innovation and Skills (UK) Private Actions in Competition Law: A consultation on Options for Reform – Government Response’ (January 2013) 26. [120] See Victorian Law Reform Commission, above n 54, [8.38]-[8.48]. [121] Law Council of Australia, above n 31, 25. [122] Betts, above n 118. [123] Australian Law Reform Commission, above n 5, 199; Victorian Law Reform Commission, above n 54, [3.18]. [124] Betts, above n 118. [125] US Chamber Institute for Legal Reform, Submission No 44 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 37. [126] Ibid. [127] Ashurst, Submission No 25 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018, 1. [128] Victorian Law Reform Commission, above n 54, [3.27]. [129] Ibid [3.35]. [130] Litigation Capital Management Limited, Submission No 30 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, July 2018, 11. [131] Ibid. [132] Michael Legg, ‘Contingency Fees—Antidote or Poison for Australian Civil Justice?’ (2015) 39 Australian Bar Review 244, 250. [133] Australian Law Reform Commission, above n 5, 205-206. [134] Ibid 207. [135] Modtech Engineering Pty Limited v GPT Management Holdings Limited [2013] FCA 636 [32]; see also Australian Law Reform Commission, above n 5, 207. [136] Ashurt, above n 127, 6-7. [137] Johnson, Winter and Slattery, Submission No 14 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 27 July 2018, 1-2. [138] Australian Law Reform Commission, above n 5, 208. [139] Clark, above n 1.
REFERENCE LIST
A Articles/Books/Reports
Australian Law Reform Commission, Grouped Proceedings in the Federal Court, Report No 46 (1988)
Australian Law Reform Commission, Inquiry into Class Action Proceedings and Third-Party Litigation Funders, Discussion Paper No 85 (2018)
Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, Report No 134 (2018)
Betts, Jason, ‘Why giving lawyers a profit motive won’t help the system’s neediest’, ABC News (online), 29 June 2018 <https://www.abc.net.au/news/2018-06-29/no-fee-lawyers-group-action-shine-slater-gordon/9913858>
Clark, Stuart, ‘Litigation funders hit the jackpot at the expense of consumers’, The Australian (online), 8 March 2019 <https://www.theaustralian.com.au/business/legal-affairs/litigation-funders-hit-the-jackpot-at-the-expense-of-consumers/news-story/0219c006ff1f4b3c32c157407d491a6b>
Commonwealth of Australia, Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Interim Report (September 2018)
Degeling, Simone and Michael Legg, ‘Class Action Settlements Opt-Out and Class Closure: Fiduciary Conflicts’ (2017) 11 Journal of Equity 319
Department for Business, ‘Innovation and Skills (UK) Private Actions in Competition Law: A consultation on Options for Reform – Government Response’ (January 2013)
Legg, Michael, ‘Class Action Settlement Distribution in Australia: Compensation on the Merits or Rough Justice?’ (2016) 16 Macquarie Law Journal 89
Legg, Michael, ‘Contingency Fees—Antidote or Poison for Australian Civil Justice?’ (2015) 39 Australian Bar Review 244
Merritt, Chris, ‘LCM pours $100m into “growth industry” of litigation’, The Australian (online), 12 March 2019 <https://www.theaustralian.com.au/business/legal-affairs/lcm-pours-100m-into-growth-industry-of-litigation/news-story/31e7868f7d3829214dd4935008cf75d0>
Morabito, Vince, ‘Closed Class Actions, Open Class Actions and Access to Justice’ (Seventh Empirical Research Report, October 2018)
Morabito, Vince, ‘Competing class actions and comparative perspectives on the volume of class action litigation in Australia’ (Research Report, 11 July 2018)
Morabito, Vince, ‘The First Twenty-Five Years of Class Actions in Australia: An Empirical Study of Australia’s Class Action Regimes, Fifth Report’ (July 2017)
Pelly, Michael, ‘Litigation Funding Licenses “sensible”: Attorney-General Christian Porter’, The Australian Financial Review (online), 17 June 2018 <https://www.afr.com/business/legal/class-actions-litigation-funding-licences-sensible-says-attorneygeneral-christian-porter-20180615-h11fx2>
Pelly, Michael, ‘New Report aims to stop consumers being “ripped off” by class actions’, The Financial Review (online), 25 January 2019 <https://www.afr.com/business/legal/new-report-aims-to-stop-consumers-being-ripped-off-by-class-actions-20190125-h1agy7>
Productivity Commission, Access to Justice Arrangements, Report No 72, vol 2 (2014)
Ryan, Emma, ‘No win-no fee: Maurice Blackburn slashes AMP class action commission’, Lawyers Weekly (online), 16 May 2018 <https://www.lawyersweekly.com.au/biglaw/23244-no-win-no-fee-maurice-blackburn-slashes-amp-class-action-commission>
Victorian Law Reform Commission, Access to Justice—Litigation Funding and Group Proceedings (2018)
Waye, Vicki and Vince Morabito, ‘When Pragmatism Leads to Unintended Consequences: A Critique of Australia’s Unique Closed Class Regime’ (2018) 19 Theoretical Inquiries in Law 303
B Cases
Brewster v BMW Australia [2019] NSWCA 35 (1 March 2019)
Caason Investments Pty Ltd v Cao (No 2) [2018] FCA 527
Gray v Cash Converters International Limited (No 2) [2015] FCA 1109
Lenthall v Westpac Life Insurance Services Limited [2018] FCA 1422
Lifeplan Australia Friendly Society Limited v S&P Global Inc (Formerly McGraw-Hill Financial, Inc) (A Company Incorporated in New York) [2018] FCA 379
Liverpool City Council v McGraw-Hill Financial [2018] FCA 1289
Modtech Engineering Pty Limited v GPT Management Holdings Limited [2013] FCA 636
Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Limited (2016) 245 FCR 191
Perera v GetSwift Limited [2018] FCA 732
Westpac Banking Corporation v Lenthall [2019] FCAFC 34 (1 March 2019)
Wileypark Pty Ltd v AMP Limited [2018] FCAFC 143
Wotton v State of Queensland (No 10) [2018] FCA 915
C Legislation
Australian Securities and Investments Commission Act 2001 (Cth)
Civil Procedure Act 2005 (NSW)
Corporations Regulation 2001 (Cth)
Federal Court of Australia Act 1976 (Cth)
D Other
Ashurst, Submission No 25 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018
Australian Bar Association, Submission No 69 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 20 August 2018
Australian Securities and Investments Commission, Submission No 72 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, September 2018
Degeling, Simone, Michael Legg and James Metzger, Submission No 9 to Victorian Law Reform Commission, Access to Justice—Litigation Funding and Group Proceedings, 22 September 2017
Federal Court of Australia, Class Actions Practice Note (GPN-CA) (2016)
Healthcare Companies and Businesses Group, Submission No 63 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 17 August 2018
IMF Bentham Limited, Submission No 50 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 6 August 2018
Johnson, Winter and Slattery, Submission No 14 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 27 July 2018
Law Council of Australia, Submission No 62 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 17 August 2018
Legg, Michael and James Metzger, Submission No 12 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 27 July 2018
Litigation Capital Management Limited, Submission No 30 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, July 2018
Maurice Blackburn, Submission No 37 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, July 2018
MinterEllison, Submission No 45 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018
Phi Finney McDonald, Submission No 34 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018
Shine Lawyers, Submission No 43 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 30 July 2018
Slater and Gordon, Submission No 54 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, August 2018
Supreme Court of Victoria, Submission No 41 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, July 2018
Tarr, JA, Submission No 5 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders, 19 July 2018
US Chamber Institute for Legal Reform, Submission No 44 to Australian Law Reform Commission, Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders
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