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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.

Clark writes in support of recent legislation proposed by the Australian federal government to impose safeguards on litigation funders and class action lawyers. The legislation would do so by guaranteeing at least 70 percent of class action compensation to class members; requiring funders to obtain agreement from class members before charging fees; and mandating the appointment of a contradictor (an independent lawyer) for class members when funders and lawyers seek approval on fees.

This op-ed comes in the wake of the highly publicized Banksia litigation scandal, in which litigation funders and lawyers (who secretly owned the litigation funding firm in question) engaged in “a conspiracy to loot a huge part of  the compensation awarded to 16,000 elderly investors.” In Clark’s view, enacting the reforms proposed by the government is the only way to restore public confidence in the proper administration of justice and protect class members from something like Banksia from happening again.

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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.”

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