A Liberal MP told The Australian that litigation funders have descended on the country like “a plague of locusts” to capitalize on the economic turmoil caused by the COVID-19 pandemic.
Jason Falinski said these funders “turned our justice system into a casino”. A report from Omni Bridgeway, a global litigation funder, found that applications for funding have increased nearly 18 per cent this year when compared to the same time last year. The company has bragged of returns of more than 300 per cent on recent investments.
The Australian Industry Group said litigation funders from other countries have been earning “outrageous” profits off Australian litigation for many years. Innes Willox, the group’s chief executive, cited a report from the Australian Law Reform Commission that found that the median return to claimants in funded class actions between 2013 and 2018 was only 51 per cent, compared to 85 per cent in unfunded class actions.
Willox called for more regulation of these litigation funders.