13 February 2020
The third Association of Litigation Funders of Australia (ALFA) conference took place in Melbourne and in Sydney on the 10th and 13th of February 2020 respectively with a large number of eminent panel members and attendees representing law firms, members of the Bar, funders and regulators. Notable speakers were the Hon. Justices Murphy (Melbourne) and Lee (Sydney).
The conference served to shine a spotlight on and foster debate regarding a number of current issues impacting class actions in Australia. It included an active debate on contingency fees and Group Cost Orders (GCO) with legislation currently being considered by the Victorian Parliament. A common view was that if the new regime was introduced, it is likely to lead to more cases being brought in the Victorian courts to take advantage of the GCO. There was a divergence of views on whether allowing contingency fees would be beneficial and how other jurisdictions would respond. There is also the prospect of differing contingency fee regimes for class actions in Victoria and in the Federal Court if the recommendations of the ALRC are adopted.
Competing claims and how courts are grappling with these was again under the spotlight. All agreed that the current beauty parade process was economically inefficient resulting in wasted costs for claimant and respondents as well as court time. A natural response is for funders and law firms to look at running claims in some form of joint venture rather than launching multiple claims. The courts appear to follow a similar line of reasoning with more recent decisions consolidating claims whereas prior decisions allowed a single claim to be run and stayed competing claims. This raises the question as to whether arrangements of this type may be anti-competitive. Competition law experts on the panel suggested that care needed to be taken when these arrangements were being considered to ensure that they do not breach competition laws.
The final session considered the area of Common Fund Orders (CFO) which has been in a state of flux after the High Court’s decision (Brewster v BMW Australia Ltd and Lenthall v Westpac Life Insurance Services Limited) in December 2019. The general view was that while interlocutory CFOs are no longer permitted, seeking a CFO as part of a settlement was within power and the Federal Court has shown a willingness to make orders of this type based on its power under section 33V. One of the ALRC’s recommendations was the Court be given express power to make a common fund order which, if adopted, would serve to bring greater certainty to class action participants.
Augusta as a founding member of ALFA is proud to have participated in this event. Should you wish to discuss any of the topics covered at the conference or litigation funding please contact us on (02) 8311 0555.