While the Lord, pace Tony Abbott's recent
comments about what Jesus would do, reportedly takes care of the little sparrows and wombats he leaves commercial litigants to their own devices. Unsurprisingly, some entities have turned to litigation funding -
at its core a contractual arrangement whereby a third party pays the cost of litigation and in return, if the case succeeds, receives a percentage of the proceeds. Litigation funding has been argued to be an important and legitimate development that provides access to justice, allows for the spreading of the risk of complex litigation and can improve the efficiency of litigation by bringing commercial considerations to bear.
A new 43 page
paper by Michael Legg, Louisa Travers, Edmond Park & Nicholas Turner on 'Litigation Funding in Australia' argues that -
Litigation funding has been argued to be an important development in Australian civil litigation that provides access to justice, allows for the spreading of the risk of complex litigation and can improve the efficiency of litigation by bringing commercial considerations to bear. Since the High Court decision in Campbells Cash and Carry Pty Limited v Fostif Pty Ltd (2006) 229 CLR 386, the Australian litigation funding industry has enjoyed significant growth. However, the operation and proper constraints on litigation funding remains a live issue with concerns that the relatively unregulated nature of the litigation funding market creates the possibility for harm to consumers and the abuse of court processes. This paper reviews the development of litigation funding in Australia and the proposals for its regulation, including the decision in Brookfield Multiplex Limited v International Litigation Funding Partners Pte Ltd (2009) 180 FCR 11 where the Full Federal Court found that the litigation funding arrangements under consideration constituted a 'managed investment scheme' that was subject to the requirements of the Corporations Act 2001 (Cth).
The authors note that -
There are six or seven litigation funding companies in Australia at present4 which account for about 95% of all litigation funding in Australia, including two (IMF (Australia) Ltd and Hillcrest Litigation Services Limited) listed on the Australian Securities Exchange.
The paper includes a discussion of
Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd (2009)
239 CLR 75,
Hall v Poolman (2007) 215 FLR 243,
Movitor Pty Ltd (in liq) v Sims (1996)
64 FCR 380 and
Sons of Gwalia Ltd v Margaretic (2007) 231 CLR 160.
