As we have previously reported, the Australian Law Reform Commission (ALRC) is in the midst of conducting an Inquiry into Class Action Proceedings and Third-Party Litigation Funders. The ALRC is to deliver its report on 21 December 2018.
Class actions are now considered one of the greatest risks to corporations in Australia, with resulting increases in D&O insurance premiums being seen in the market. Gone are the days of yesteryear, when class actions were novel and rare. They are now an established part of the litigation framework, having evolved extensively as the rate of actions, and the settlement values, ever increase.
Through the ALRC’s consultation process, interested parties have been given the opportunity to reflect upon the evolution to date, and future trajectory, and comment on whether there is a need for change.
Leveraging on its significant experience in the class action space, Norton Rose Fulbright has made a comprehensive submission to the ALRC detailing how class actions, and the use of third-party litigation funders, could be fine-tuned so as to provide a balance between the competing policy drivers underpinning the regime.
Our submission focuses on the following:
- The extent to which increases in the cost of D&O insurance have been driven by class action settlements and the risk of class actions being brought against Australian businesses;
- Whether there are other ways to address business concerns regarding securities class actions than amending continuous disclosure laws;
- Whether there is a need for greater regulation of funders, through both financial services regulation and through the procedural means available to the Federal Court;
- Recognising the growing demand for alternative fee arrangements such as contingency fee arrangements in commercial litigation, and the potential for greater access to alternative sources of funding for class actions if contingency fees were introduced, balanced with the need for adequate safeguards for group members; and
- Alternative means of funding class actions and resolving disputes.
Watch this space for further blogs canvassing our comments to the ALRC on the above issues and reporting on the ALRC’s recommendations.
You can request a copy of our detailed submission here.