Andrew Wallace (Fisher, Liberal Party) Share this | Hansard source

On behalf of the Parliamentary Joint Committee on Corporations and Financial Services, I present the committee's advisory report, incorporating dissenting reports, on the Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Third party litigation funders play an important role in promoting access to justice for Australians who have been wronged. However, the agreements under which litigation funders operate have too often resulted in profits that are disproportionate to the risks and costs they bear. Returns to plaintiffs in cases involving litigation funders remain well below those received by class members in non-funded actions.

This bill seeks to regulate class action litigation funders and limit the windfall profits they stand to make. It does this by ensuring funding agreements are fair and reasonable for both plaintiffs and funders. The bill also minimises interference in private contractual relationships between funders and plaintiffs by requiring that only those individuals who consent to participate in a funding scheme are bound by it. These reforms empower courts to approve or vary litigation funding arrangements, usually on the advice of an independent court appointed assessor, and introduce a rebuttable presumption that plaintiffs receive at least 70 per cent of the proceeds of a successful action. The bill thereby recognises that funders should receive an appropriate return on their investment while also strengthening the court's discretion to approve or vary the proportion of any settlement received in the interests of fairness and reasonableness. This bill also regulates the conduct of litigation funders as a new kind of managed investment scheme, a class action litigation funding scheme, and looks to establish a consistent approach to class actions across all jurisdictions. The provisions in this bill will encourage book building, deter speculative class actions and restrain windfall funder profits while ensuring a fairer return to plaintiffs involved in class actions.

I want to thank all submitters, all committee members, the deputy chair and the secretariat for their work. I commend the report to the House.

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