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Third Party Litigation Funding “from Taboo to Transparency”

A recent article by Yves Faguy in the Canadian Bar Association’s magazine highlights the need for transparency in the litigation funding industry. The article shows the growth of the industry and the increasing prominence of litigation funding on a global stage citing the use of funding in major cases in the UK, Germany, and US.

The author asserts that critics of third party litigation funding are “justifiably worried that funders will subvert justice by unduly influencing decisions about legal strategies to pursue and when to settle a case” and notes that “these are decisions that, ultimately, should rest in the plaintiff’s hands”.

Faguy cites Australian lawyer Michael Duffy’s recent article in the University of New South Wales Law Journal which makes the case for stricter regulation of the third party litigation funding industry by using game theory to analyze the outcome of third party litigation funding for litigants, funders and lawyers.

Faguy concludes by proposing that lawmakers should impose “clear and uniform disclosure rules on all contractual and financial arrangements” between litigants, funders and lawyers so that funders know “what is appropriate behavior” and to ultimately increase transparency in the industry.

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

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.”

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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