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Australian Class Action Lawyers Face Criminal Investigation Over “Grossly Unethical Behaviour”

A group of class action lawyers in Australia “are facing a criminal investigation and a damages bill of more than $11.7 million for ‘dishonourable’ and ‘fraudulent’” conduct, reports the Australian Financial Times. The lawyers and litigation funder involved attempted “to claim more than $19 million in legal and funding fees from a group of elderly investors in the Banksia class action.”

According to the AFT, the class action case was settled in 2018, but the court refused to sign off on the settlement agreement when a member of the class challenged the $4.75 million in legal fees and $12.8 million in funder’s commission. 

Upon further scrutiny of the steep costs, the court found that the class action lawyers and funders were actively deceiving the court and “corrupting the proper administration of justice”, all for “personal greed.” 

“Justice Dixon on Monday said the barristers ‘went to extraordinary lengths to conceal their misdeeds’, including backdating invoices and misleading an expert costs consultant. They then ‘waged a campaign of intimidation against the group member’ who challenged their costs, including making financial threats.”

The judge also found that the lawyers “billed ‘hundreds of hours of time for work that had never been performed’ and‘authored a misleading opinion of counsel’ about their costs.”

The claim was funded by Australian Funding Partners Limited, which was the class action funding arm of Mark Elliot, one of the lawyers involved in the case who is now deceased. “The court heard that Mark Elliott had discussed how they could deceive any costs consultants called in by the court to examine their legal fees, including charging a cancellation fee of $300,000 for the trial.” 

Judge Dixon has asked the public prosecutor to further investigate the lawyers, saying that the group had “left a stain on the integrity of barristers as a profession.”

In commenting on the case, “Assistant Minister to the Attorney-General Amanda Stoker said the judgment reinforced the need for tighter oversight of litigation funders.”

Read the full article in the AFT here.  


More to explore:

Game Is Up For Litigation Funders

Last week, the Australian Financial Review featured an op-ed written by Stuart Clark, an adjunct professor at Macquarie Law School and former president of the Law Council of Australia, that highlights the need for reforming Australia’s litigation funding industry.




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