Wednesday, 24 November 2021
Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021; Second Reading
I rise today to speak on the Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021, and it's an honour to follow the member for Dunkley with that impassioned speech. I wish I could speak like that. This bill attempts to set limits on litigation funding schemes, which are used to bring forward class actions in our courts. It would do this through two main mechanisms. The first provides that a court must approve or vary the distribution of proceeds of a claim so that the distribution is fair and reasonable. Where more than 30 per cent of the proceeds will go to lawyers, class action funders or other nonmembers of the action, the bill will require the court to hold a hearing on the distribution of funds. As a result, the funding agreements made between class action funders, lawyers and plaintiffs prior to court action could potentially be altered. The second mechanism would change the opt-out system to an opt-in system for gathering plaintiffs into class action groups. This would mean that, rather than being an automatic beneficiary of a successful class action, potential plaintiffs would need to formally join the class action before it gets to court.
Labor will oppose this bill. This bill makes plain the government's hostility to those in our community who seek justice via class action lawsuits. While the stated intent of this bill is to protect the interests of such plaintiffs, it is clear that the setting of the limits does the exact opposite.
One of the huge issues we have in this country is access to justice. The Australian legal system is so incredibly prohibitively expensive, to a point where, for almost everyone, going to court is not an option. Every year, community legal centres turn away over 160,000 people who need help. A similar story exists for legal aid services. It's what leads to what many in the legal community call the missing middle. Class actions help to address this. They allow those who have been wronged to join together and assert their fundamental legal rights. They allow justice to be done when it otherwise wouldn't be.
There are reforms to class action suits which need to be done, but this is a bill that misses the point entirely. A submission to an inquiry into this bill put it very clearly, saying:
That the Government is seeking to present this reform as a consumer protection measure is Orwellian gaslighting.
Indeed, the so-called inquiry revealed a lot about the serious deficiencies in this bill and the government's attempts to cover them up.
Just one week was given to public engagement so members of the community could make submissions—just one week for this very important change that will impact so many. The government tried to pass the inquiry off as independent, despite the fact it was partisan. When a government engages in these clumsy attempts to hide its intentions and smother dissent, it is a red flag that something is seriously amiss. And that is the case with this bill. This disgracefully-short public consultation period has rebounded on the government. Rather than muzzling discontent with the changes, the majority of submissions to the inquiry made clear that the effect of this bill is to jeopardise the interests of both plaintiffs and defendants. That's right: the effect of this bill would jeopardise the interests of both plaintiffs and defendants, and not, as the government's title claims, 'protect' them. This was the view of both the plaintiff lawyers who bring class actions but also the defence lawyers. Both groups are speaking up against these changes, proof that the government has an active campaign against class actions. The fact is the government doesn't want to protect plaintiffs. Instead, it wants to protect wealthy and powerful defendants. This will impede the quest for justice for those who have been wronged, for example, by the actions of a large corporation. And, where an action is successful, they will limit the financial penalty on those who've been found to be responsible for causing harm. That much is plain.
The Australian Law Reform Commission recommended the current opt-out system. It refers to the system as open class actions, which is a good term to use, because this system opens class actions to anyone who may have been wronged. It is difficult, if not impossible, to identify every affected individual in a class action because of the large number of potential plaintiffs—for example, the class action by thousands of Australian women who took on and won against pharmaceutical giant Johnson & Johnson over the side effects from pelvic mesh implants, including chronic pain and infection. The Federal Court found Johnson & Johnson had been negligent and driven by commercial interests. It was ordered to pay $2.6 million in damages to three women who were the lead applicants in a class action of thousands of women affected by the implants.
Another example is the class action against the Morrison government over the shameful and illegal robodebt scheme. This action was made up of 430,000 members. The effect of this bill would have required every single one of them to be identified and for them to opt in to the class action in order to benefit from the $1.7 billion the Morrison government paid in restitution. In essence, the Prime Minister ripped off 430,000 Australians who, in response, took him to court and won. But rather than admit fault and learn from this embarrassing incident, the Prime Minister is now trying to convince us that this bill is about protecting the interests of people, just like those 430,000 people who, through the courts, just made him pay $1.7 billion!
We have seen this time and time again, that this Prime Minister is driven by revenge, and this will affect some of Australia's most vulnerable and powerless people. Each and every one of those 430,000 people illegally indebted through robodebt was, or had been, living on a low income. Many would have been members from some of our most remote, linguistically diverse and disadvantaged communities.
To obtain the written opt-in consent of all of those 430,000 people would have been inefficient, unworkable and unjust. Thousands could have missed out on justice and missed out on the money Scott Morrison's government owed them. But this is the actual goal of this bill, not just some unintended consequence. This bill will punish litigants like the robodebt plaintiffs, not protect them. It will punish anyone else with the misfortune of living on a low income who has been wronged by powerful corporate or political interests. But plaintiffs are not the only ones who will be disadvantaged by these arrangements; open class actions benefit defendants too. It is in their interests to defend a single claim. Closing off potential plaintiffs to a particular class action doesn't remove their rights to justice forever. It is conceivable that, under the system, defendants could be forced to fight near identical litigation claims multiple times over the same single event. Our courts are already under pressure with backlogs and delays. That was not helped when the government abolished the world-renowned Family Court either. Every attempt should be made to address delays in justice, but this bill, which would create closed class actions, would only heap more pressure on the courts.
This bill will also create other barriers to justice. The cost of class actions will be driven up by giving courts and so-called external contradictors a say in how funds are distributed among plaintiffs, class action funders and law firms. This bill will drive the efficiency out of existing arrangements, create uncertainty and introduce ambiguity into funding agreements. Confusingly, the government argues that creating more legal argument and more discretionary powers of the court will somehow resolve legal uncertainty for plaintiffs. But, as multiple submissions to the inquiry into this bill point out, this is simply not the case. Adding more voices, more opinion and more processes to anything only complicates it, and in the law complications mean greater costs. The changes to funding processes contained in this bill will not protect plaintiffs—far from it. They will instead deter them and their supporters. If they proceed, the changes will work against a quick resolution by fouling the potential for dispute settlement. Litigants on both sides will be dissuaded from seeking an agreement if the distribution of proceeds from an out-of-court settlement is uncertain and open to challenge after that settlement.
This bill is just another example of this government's shameful record on reforming our legal system, and just another example of this government's shameful record on always attacking the most vulnerable in our society and never standing up for those who most need the support of government. This is a government that is opposed to accountability. This is a government that tries to avoid dissent or debate at any turn. This pathetic one-week inquiry into this bill when it's going to have such impacts on so many people, mainly disadvantaged people who can't afford our incredibly expensive legal system—yet more people will be disadvantaged by this bill and unable to access justice. That is a disgrace, and Labor will stand up against this. Labor will oppose this bill.
To think that this government brought that disgraceful and illegal robodebt scheme, chasing up minimal debts, often wrongfully, from some of the poorest people in this country years later, driving people to extreme anxiety and, in devastating cases, even suicide. This scheme was found to be illegal, and, instead of recognising that, having been found by the court to need to pay back 430,000 people who were wrongfully targeted by this scheme, this government brings in a bill to make it harder for people, particularly those without the means to take on the legal system, to bring class actions. We're seeing that both sides, both plaintiffs and defendants, are not happy with what's in this bill. It's a bill that's trying to make it harder for people to bring class actions. The only people this protects are wealthy defendants and large corporations, who will be able to get away with things because people won't be able to come together—people who on their own wouldn't be able to challenge these issues in court. This will make it more difficult for them to get together and bring a class action that could expose the wrongdoing of wealthy and powerful corporations and others who already have the advantage in our legal system because of the sheer costs that prevent most people from accessing justice.
We're seeing community organisations and legal aid turning away people that desperately need help—more and more people every year. And this is what this government comes up with in an attempt to reform our legal system. Well, it's simply not good enough, and I'm proud to be part of a party that is going to stand up for the people, stand up for fairness and stand up for people who need a government to be on their side to ensure that they have a say and that they have access to justice.
This bill is a disgrace, but it's not a surprise from this government. It is really just another example. What would you expect from a government that brought us the robodebt scheme, a disgusting attack on the most vulnerable Australians; a government that makes the NDIS almost impossible to navigate for people with disability and their families; a government that makes people jump through hoops and fight for what are the most obvious supports that they need through the NDIS? We see this time and time again on the NDIS committee and from our own constituents. It's just a government that's not listening, that's out of touch with the community and that doesn't care about these issues. It doesn't care about standing up for people who really need access to justice, to a decent income and to a fair go.