Wednesday, 24 November 2021
Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021; Second Reading
I'm glad to make some remarks on the Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021 and, in particular, to speak in support of the second reading amendment moved by the member for Whitlam. The bill is best summed up in the words of John Sheahan, from the Law Council of Australia, who described it as 'making things worse for everyone'. Unlike the previous speaker, this is someone with considerable expertise in the law with respect to the way our justice framework works, and his judgement is that the bill makes it worse for everyone.
The previous speaker, the member for Ryan, made some sort of attempt to suggest that the government is bringing in a bill that has at heart the interests of ordinary Australians and of people who have suffered very significant harm. That is rubbish. Class actions are vitally important. They help people who, usually through corporate malfeasance, end up suffering enormous harm. The best examples is asbestos, a toxic substance that has caused huge health consequences and death in the most terrible way for thousands and thousands and thousands of people. In some circumstances, justice for people—if you can describe financial compensation as justice for what they experienced—was only possible through class actions. There are many examples of that.
This bill seeks to make access to that kind of justice more difficult. The way in which it makes things worse for everyone springs from a number of different aspects of the government's conduct in general and its specific approach to this bill. The government has repeatedly shown no interest in advancing the cause of justice in this country. To have members of the coalition come in here and seek to pretend they're interested in the rights and opportunities of ordinary Australians, particularly Australians facing disadvantage, will come as a big surprise to all those in the community legal sector who have found themselves subject to funding cuts and uncertainty courtesy of this government. Everyone who is affected by or has a possible interest in the jurisdiction of the Family Court will find themselves surprised to see members of the government come in here and pretend they're interested in justice for those who need it most, when it wasn't that long ago that, against all advice, the government decided to abolish the Family Court. There was expert evidence from people working in that field who said the one thing you could guarantee from that outcome was that the lives of women fleeing domestic violence and the lives of their children would be made significantly worse and be put at risk as a result of those changes.
There's bad faith in the way this bill is presented. It's not intended to make access to justice easier and more affordable for everyday Australians. Like so many of the things this government has done, it's been done in the interests of reducing that access and allowing large corporations to go about their business without being held to account or held responsible for the things they occasionally get wrong.
And this bill has been done through a bad process. It was quite amusing to hear the member for Ryan say this bill has been brought forward on a thoughtful and considered basis. It has been rushed in here. The committee that considered it did so over three weeks. There was one public hearing. Public submissions were open for seven days. The majority report was provided literally seven days ago; Labor members of the committee received the report seven days ago and made their dissenting report on that basis. And here we are, seven days later, dealing with a bill that many people in the field regard as a very significant backward step.
I will go to a couple of those points. The first is the government's introduction of the rebuttable 70-30 cost split. The analysis by those who work in this area—and it's not people directly involved in the carriage of these matters but people like the Law Council of Australia and the Australian Law Reform Commission—has said that the crude and ill-considered change that the government is about to implement will have the effect of driving up litigation costs overall. So that's going to hit plaintiffs who are trying to receive compensation through these matters across the board. It's going to make settlements less likely, and settlements, we know, are one of the most effective ways of reducing costs in any legal dispute because they mean that you get to a point of conciliated resolution faster and less expensively.
It's also going to mean that there will not be funding for some meritorious claims. The reality of this world is that you will have a large, well-funded corporate defendant and you will have many people who, having been affected by the conduct of that defendant, have vastly different and inferior financial means to challenge that outcome and try to seek some sort of justice and compensation for the harm they have received. Litigation funding, whatever you say about it, actually enables that to occur.
I would be the first to say that, if the government wanted to embark on a broad program of reducing the cost of receiving justice, I would be happy to join them in that effort. They've got no interest in that more broadly. To come in here and try to suggest that it's the Labor Party that is the friend of well-heeled lawyers and large law firms is to enter into some sort of bizarre world. If the government wants to embark on a broad program of making justice more accessible and more affordable for Australians at every level, bring it on. After eight years, that would come as a surprise. But that's not what this achieves. This will actually mean that there will be meritorious claims that will not go forward. That means that there will be hundreds, and sometimes thousands, of Australians who have been harmed—they may have been harmed economically, but they may also have been harmed personally in terms of their health—and they will not be able to pursue justice and compensation because of the changes this government is making.
The opt-in requirement is particularly bizarre. No-one supports it. If you wanted to find one part of this bill that squarely went to the defendant protection racket part of it, it would be this. The member previously got himself into a real tangle on this. You can't, on the one hand, say that we're fixing the costs issue and then, at the same time, say we need people to opt in so they don't find themselves being on the end of unfair costs. If, in your own mind, you're fixing the costs issue—if that's what you are doing, which clearly isn't the case, but if that's what you're doing—then there's no problem anymore. The member for Ryan tried to pretend that people should actually sign up to some sort of unfair costs split. You're dealing with that, and therefore you surely should want as many people to benefit from a class action as possible. But that's not what this does. What it does is change the status quo. Rather than every relevant person being considered to have opted in and to be part of a class action and therefore potentially to benefit from it, this means having to opt out rather than having to opt in. This puts that obligation on them. It essentially means that, if people don't hear about it, don't know about it or are unconcerned about it and don't take the time to go and fill in some legal paperwork, they are not going to be covered. So it's going to exclude people who would otherwise benefit from class actions. As far as the plaintiffs are concerned, that will be a plain and certain outcome of this legislation.
Even from the defendant's side, what it means is that, rather than having one open class action that deals with the people who are affected, you're quite possibly going to end up with multiple, or even a succession of, closed class actions with different sets of plaintiffs, which, from the point of view of the defendant, just means that the process is more complex, more costly, more uncertain and more time-consuming. That goes to the point that I mentioned at the outset about this making things worse for everyone.
I actually do have some experience of class actions. I worked on behalf of plaintiffs, of claimants, who were injured through the use of the Dalkon Shield IUD. The Dalkon Shield was a very harmful contraceptive device and IUD, particularly in the 1980s and into the early 1990s. It ended up being, at the time, the largest torts matter in the world, certainly the largest after the asbestos cases. There were thousands and thousands of Australian women who were told that it was safe, some of whom were using that device as their first contraceptive device, only to suffer horrendous injuries. In some cases young women who had been told that this was perfectly safe subsequently had to have a total abdominal hysterectomy at the age of 19. They had their ability to consider having a family and future taken away from them by a faulty device, despite in many cases women going to the doctors and saying, 'This doesn't seem right; I'm experiencing some symptoms that concern me.' They were told: 'No, this is perfectly safe. This is a fantastic device, and you'll be fine.' That's what thousands and thousands of women, hundreds of thousands of women worldwide, experienced, and it was only through the class action that was started in the US that there was some compensation, very paltry compensation I should say, when you consider the magnitude of the injury that women suffered.
I was separately involved in, as a paralegal, a class action involving the insecticide called Helix. The drought in the 1990s meant cattle producers in Queensland and New South Wales had to rely on cotton trash as feed for their cattle. Unbeknownst to them, the cotton had been treated with an insecticide called Helix, which had a chemical in it that bioaccumulated in the tissue of the cattle and made them unsaleable. That cost those cattle producers hugely to, essentially, have their entire stock rendered valueless, because an insecticide company hadn't done its due diligence and it hadn't taken steps to ensure that—it's a fairly common practice that some kinds of agricultural products are fed to cattle in certain circumstances—there were proper warnings or that they avoided the use of some of the chemical components in that insecticide. It cost cattle producers their livelihoods, in some cases.
These are the kinds of things that class actions are required for. They have a very important place in our community and in our justice system. As colleagues of mine have said—the member for Bruce most particularly last evening—the Australian Law Reform Commission has talked about funding and enabling the use of independent cost assessors and contradictors in the Federal Court jurisdiction and those kinds of things. We are all for that. This is something that, if the government genuinely cared about these things, it could have done this year, last year, the year before that—in any of the last eight years. It could have got on and done some of that work, but no.
What the government is doing instead is rushing through this bill with a two- or three-week committee process, landing the report in the absence of a proper regulatory impact statement, which all parliamentarians should be concerned about. We don't actually have the benefit of a proper regulatory impact statement because what has happened in this case is that the Liberal majority committee report that was only provided last week has been deemed to have the character of some independent assessment, which is frankly bizarre. And this bill is being rushed through.
All of the people with expertise in this field, who have an interest in the proper conduct and carriage of justice and who have been advocates in the past for genuine reform that might have addressed costs issues, have judged this to be an absolute lemon; it is a dog with fleas, and yet here we are in the penultimate week of the parliamentary year having this rushed through. It is designed to protect the interests of large corporate defendants. It is designed to make it harder for ordinary Australians, whether they're cattle farmers or women who are injured by a faulty medical device or people injured through asbestos or anything else, to get fair and just compensation. It is a terrible piece of law and it should be rejected by this House.