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The inquiry into litigation funding and regulation of class actions is predicated on misconceptions and hyperbole being provided to the press. The submission by Augusta addresses these as well as key benefits of funding:
- The purported explosion in class actions, which academic research on the actual numbers, shows to be untrue.
- Litigation funders don’t tend to fund unmeritorious claims as these by definition are likely to be lost and thus the funder loses its money.
- Windfall gains are referred to but fail to take into account the high risks and costs and thus losses encountered. Nor that class actions often take many years to run before a funder will receive their money (if any) back.
- Primary benefit to the judicial system, provided by litigation funding, is access to justice for ALL and not just those with greater financial means, as was recognised by the ACCC.
- Regulation poorly conceived will deny individuals access to justice and allow powerful corporations to potentially disregard the law.
- A Managed Investment Scheme (MIS) is designed for financial regulation and not legal regulation where class action members are not ‘investing’ in a financial ‘scheme’, but rather are pooling their causes of action. The proposed application of an MIS is therefore inappropriate.
Read Augusta’s submission below:
Augusta Supporting Submission – 10 June 2020