Jason Falinski, the chair of the Australian House of Representatives standing committee on tax and revenue, said third party litigation funders “have turned our systems of justice into a casino in which they are the only winners.”
Falinski says class actions have more than tripled since the Australian Securities and Investments Commission gave the green light to litigation funding. As a result, funders are seeing “outrageous” returns on their investments, but are delaying justice for real victims and taking from the court’s judgment or settlement.
In his piece, he offers several examples of egregious funder behavior, including on funder charging the victims it was supposedly representing for an insurance policy that paid out three times its costs. Or an employment related judgment of $5 million, in which $2 million went to the funder and the rest was shared between the lawyers and administrators. The workers who sued got nothing.
Falinski said the Australian government must “prevent litigation funders profiteering in the regulatory dark.”