The 'Litigation funding and the regulation of the class action industry' report by the Parliamentary Joint Committee on Corporations and Financial Services states
Every civilised system of government requires that the state should make available to all its citizens a means for the just and peaceful settlement of disputes between them as to their respective legal rights. The means provided are courts of justice to which every citizen has a constitutional right of access.
The purpose of a civil justice system is to ensure a fair and reasonable society, and that when a damage is inflicted upon a person that is unlawful, that they are restored to their previous state.
Courts and civil remedies were not established as novel investment vehicles to deliver handsome profits to innovative financiers or creative lawyers. Most Australians would be comfortable with the idea that profits may be made incidentally while delivering the core objective of access to justice. But they would be rightly horrified to learn that for some participants in our justice system, return on investment and profit from risk-taking has become their primary motivation.
Australia’s highly unique and favourably regulated litigation funding market has become a global hotspot for international investors, including many based in tax havens and with dubious corporate histories, to generate investment returns unheard of in any other jurisdiction – in some cases of more than 500 per cent.
This is directly the result of a regulatory regime described by the Australian Securities and Investments Commission (ASIC) as ‘light touch’ and under which no successful action by a regulator has ever been taken against a funder. Participants in class actions are the biggest losers in this deal. When they finally get their day in court, it is the genuinely wronged class action members who are getting the raw deal of significantly diminished compensation for their loss, as bigger and bigger cuts are awarded to generously paid lawyers and funders.
Given the significant costs involved in bringing civil proceedings in Australia, the inquiry heard consistent support for class actions as a legitimate tool to overcome this barrier for many members of the community who wish to enforce their rights and obtain redress through the courts. As a way to improve access to justice, class actions provide a vehicle for the pursuit of collective claims, which are often individually of a smaller dollar value and may be otherwise uneconomical to litigate.
The Parliamentary Joint Committee on Corporations and Financial Services (committee) concurs with the findings of numerous previous reviews: namely, that class actions, when working as originally intended, should facilitate access to justice, discourage wrongdoing, and promote the efficient and effective use of court resources.
Litigation funding too, provides a way for representative plaintiffs and class members to meet the costs of litigation. These costs include their own legal costs and, in the event of an unsuccessful outcome, the defendant's legal costs. When litigation funders pay lawyer's fees and indemnify representative plaintiffs for adverse costs, it significantly changes the viability of class actions under Australia's 'loser pays' approach to civil litigation. Litigation funders also potentially close the considerable gap in financial resources between the two sides of a class action, reducing the defendant's ability to defeat the case through superior economic power. Therefore, the committee recognises that, in many instances, a class action in Australia may not proceed without a litigation funder.
However, while no witness in the inquiry proposed Australia abolish class actions or litigation funding, there was virtually unanimous agreement the current regulatory arrangements are too light touch and greater oversight of the industry is required. The only debate was about the extent and nature of that regulation. Those who most fiercely resisted comprehensive regulation of the industry were the vested interests who benefited from the status quo. While they enthusiastically professed to be only concerned with the interests of class action members, their opposition to measures designed to protect class members undermines that claim.
This inquiry was referred because of significant concerns about the current operation of the litigation funding and class action industries, including:
- the significant growth in shareholder class actions, and related issues;
- the increase in multiple and competing class actions and the delays added in resolving those matters;
- the excessive profits obtained by litigation funders compared to the risks the funders are taking;
- the scant regulatory framework covering litigation funders, including: − issues of the funder's duties to class action members; and − the determination and oversight of funding fees;
- whether the interests of class members are being served by the current regulatory environment; and
- inconsistencies between federal, state and territory class action regimes.
The federal class action regime has been in place for almost three decades. While the procedural mechanism has developed significantly through the common law, the statutory provisions have remained relatively unchanged.
Uncertainties about power and procedure need to be clarified and procedural efficiency prioritised. A review of these matters is therefore, timely.
Further, litigation funding has been allowed to develop with limited regulation, except for some degree of court oversight, and evidence to the committee, and recent case law including Bolitho v Banksia Securities Limited, suggested this has been inadequate. The growth in the scale of litigation funding, the participation of international litigation funders in the Australian market, and the frequency of windfall profits, highlights the need to reassess whether representative plaintiffs, class members and defendants are achieving reasonable, proportionate and fair outcomes. The Australian Government recently extended the application of some aspects of financial services regulation to litigation funding in class actions. The committee has considered those amendments in the context of a broader regulatory approach incorporating both financial services regulation and enhanced oversight by the Federal Court of Australia (Federal Court).
A particular issue identified through the inquiry is the asymmetry of information between market participants, which stems from regulatory failure. Mum and dad investors signing up to a litigation funding agreement as part of a class action can never hope to have the sophisticated understanding of corporate law or financial products that their lawyers and funders possess. If this asymmetry is not addressed to protect the interests of class members, increasing competition from more funders entering the market will not deliver lower prices for consumers. This is borne out by experience: the entrance of more players from the international litigation funding industry has done little to dent the spectacular returns earned by funders.
A broader issue of transparency was another common theme. The operations of many funders are highly opaque, including their ultimate owners, the amount of tax they pay in Australia, and even their returns. Time and time again the committee was told these matters were commercially confidential, and when challenged with examples of publicly reported returns, they were dismissed as unrepresentative or simplistic. Given these enormous profits are being generated from our legal system, the litigation funding industry is not just another competitive market. It requires much higher degrees of transparency to assure Australians the legal system their taxes fund is not being hijacked for profit. In short, the committee was tasked with inquiring into whether the current level of regulation, practices and procedure applying to Australia's growing class action and litigation funding industry is appropriate, and whether it is delivering fair and equitable outcomes for class members.
Having considered the evidence put to it, the committee considers the concerns about the class action and litigation funding industries to be wellfounded. In the committee's view, the class action system needs to be reformed to reflect the underlying tenets of its original intent: that is, to deliver reasonable, proportionate and fair access to justice in the best interests of class members.
Accordingly, the committee identifies those areas where it sees significant value in reforming the current regime. Nevertheless, the committee is aware of the adverse consequences that could arise from ill-judged regulation. Therefore, the reforms proposed by the committee, while comprehensive, are measured and targeted.
The committee's approach to reform has been guided by the principle of reasonable, proportionate and fair access to justice in the best interests of class members. ...
Reasonable, proportionate and fair class action procedure
Commencing a class action
If the criteria and process to commence a class action sets the bar too low to commence a class action, the class action system can be susceptible to exploitation for financial gain. The class action regime should be cost-effective and accessible with appropriate safeguards to curb any abuse of process. The committee recommends measures to ensure that procedural proportionality is considered at the outset of a class action.
Resolution of competing and multiple class actions
Separate and concurrent class actions which litigate the same legal claims, for the same or overlapping class members, against the same defendant, undermine the objectives of the class action regime, which is for a single decision to resolve many claims that are the same or similar. For this reason, the court must undertake a process for determining how to manage the competing and multiple actions, with parties often incurring substantial additional costs and delay. The powers and processes to manage and resolve competing and multiple class actions need amending to be clear, yet flexible, in order to respond to the circumstances of the case in a reasonable, proportionate and fair manner. The committee makes a number of recommendations to facilitate greater oversight of competing and multiple class actions and with respect to how the Federal Court should manage and resolve competing and multiple class actions, including when they are filed in different jurisdictions.
Class closure orders
The federal regime intends for class actions to be 'open'. That is, the class action is on behalf of all class members irrespective of whether they had been identified, or consented to joining the action. A particular challenge with open class actions is reaching a settlement when the number of class members and the quantum of the claim are unknown.
The committee's recommendation regarding the power of the Federal Court to 'close' the class seeks to strike a balance between protecting the rights of class members whose legal claims are determined by the outcome of a class action, and facilitating reasonable, proportionate and fair resolutions to class actions through settlement.
Common fund orders
Another challenge with open class actions is that the costs incurred in the class action can be borne by the representative plaintiff, rather than among all those who share in the proceeds of a successful outcome. One tool used by the Federal Court to address this issue of 'free riding' has been the 'common fund order', requiring all class members to equally contribute to the costs from their share of the proceeds from a settlement or judgment.
Evidence to the committee was divided on the value of common fund orders in class actions. Given the High Court’s judgement in BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall  HCA 45 (Brewster), the power of the Federal Court to make a common fund order has been, and could continue to be, contested in the courts. The committee recommends the Australian Government legislate to address uncertainty in relation to common fund orders, in accordance with the High Court’s decision in Brewster.
Protecting class members from adverse costs
The risk that a litigation funder could be liable to pay for the defendant's costs if the class action is unsuccessful should act as a deterrent to financing unmeritorious class actions. Often, the litigation funder is ordered to pay security for those costs at the outset of a class action. Insurance products for adverse costs and security for costs are available and are often purchased by litigation funders, thereby reducing their risk and often increasing costs for class members.
The committee's recommendations codify the common industry practice of litigation funders indemnifying the representative plaintiff for adverse costs, and introduce a presumption that a litigation funder will provide security for costs in class actions. The objective is to ensure appropriate levels of indemnity are provided for the representative plaintiff and proportionate risk undertaken by the litigation funder.
Court regulation of litigation funding fees
The Federal Court has limited powers to regulate litigation funders and intervene in their contractual relationships with representative plaintiffs, even in instances where the fees appear unreasonable, disproportionate or unfair. Greater oversight by, and interventionist powers for, the Federal Court are required to constrain the large portions of settlement sums that are obtained by litigation funders by way of reimbursement of fees and commissions.
To complement the financial services regulation of litigation funding in class actions, the committee recommends expanded and strengthened powers for the Federal Court to regulate litigation funding fees. Critical to this reform is assistance from financial experts to assist the Federal Court in ensuring that fees are reasonable, proportionate and fair. Increased transparency through appropriately measured public disclosure of transaction costs and division of a settlement would also aid in achieving this objective.
In addition, the committee notes the proposal by some class action law firms and litigation funders to guarantee a minimum return of at least 70 per cent of the gross proceeds to class action members, and recommends the Australian Government investigate the best way to implement this floor. The committee also recommends the Australian Government investigate whether a graduated minimum return above this floor is appropriate for shorter, less risky and less complex cases.
Contradictors and the interests of class members
Significant challenges exist for class members to represent their interests at the stage when the Federal Court's approval is sought for a class action settlement. Moreover, the objections that class members may have to a settlement are unlikely to be shared by the parties who negotiated the settlement and agreed to the proposed terms.
A contradictor is an advocate, usually a senior barrister, appointed by the Federal Court to represent the interests of class members. The committee encourages the wider use of contradictors. In many instances when a contradictor has been appointed, the fees and commission sought by the class action lawyers and litigation funder have been reduced, improving the financial outcomes for class members. The committee makes a number of recommendations to introduce a new approach to the use of contradictors in the Federal Court. In essence, there should be a presumption for a contradictor to be appointed in certain circumstances.
During the inquiry, Victoria became the first and only jurisdiction in Australia to permit lawyers for the representative plaintiff in a class action to charge for legal costs on a 'contingency fee' basis. That is, where the legal fees to be paid in a successful outcome are calculated as a percentage of the money recovered in the class action.
The committee considers the public interest outcomes potentially achieved with the availability of contingency fee billing in class actions are not outweighed by the potential for their exploitation for the benefit of lawyers' profits, even with the existence of safeguards. A measured and steady approach to the use of contingency fees in class actions is essential.
A law firm billing on a contingency fee basis is offering both a legal service and a funding service. With the aim of a consistent regulatory approach to the activity of financing class actions, the committee recommends the application of the financial services regulation, to which third-party litigation funders are subjected, to lawyers operating on a contingency fee basis. The committee recommends a review to consider the feasibility of this proposal. The committee also suggests further consideration of the application of an 'uplift' fee of up to 25 per cent on billed costs in litigation funded class actions because the risk may not justify the returns.
Other regulatory measures
Conflicts of interest in litigation funded class actions
The interests of a litigation funder, lawyer and representative plaintiff differ and, at times, conflict. The level of power and influence litigation funders have in class actions gives rise to situations where their financial interests trump those of the representative plaintiff and class members. The committee makes a number of recommendations to raise the obligations placed on litigation funders and lawyers to avoid conflicts of interest, and to disclose (to the representative plaintiff, class members and the Federal Court) and manage those conflicts when they do arise.
The detriment to the representative plaintiff and class members when their lawyer also has an interest in the litigation funder financing the class action can be so significant that arrangements of this nature should be prohibited. In addition to conflict of interest obligations, litigation funders should be required to meet the same standards of conduct obligations that are already imposed on parties to a class action and their lawyers. The committee recommends augmenting the standards to which parties, lawyers and funders are held, and broadening the range of penalties available to the Federal Court for non-compliance.
Financial services regulation of litigation funding
From August 2020, litigation funders in class actions must comply with the requirements of the Australian Financial Service Licence (AFSL) and Managed Investment Scheme (MIS) regimes. The committee has applied 'fit-for-purpose' principles in its consideration of the application of the AFSL and MIS regime to litigation funders in class actions. ASIC has taken a flexible and facilitative approach to modify the requirements to better tailor them to the litigation funding context. This approach should continue, with a fit-for-purpose regime for litigation funders legislated by the Australian Parliament.
The committee also recognises the potentially disproportionate burden this regime could place on small not-for-profit litigation funders already operating as charities who only occasionally finance class actions for the benefit of their members, and recommends the Australian Government investigate the best way to provide them an exemption.
Claims for a breach of continuous disclosure laws underpin many shareholder class actions. Shareholder class actions are generally economically inefficient and not in the public interest. Even successful actions amount to shareholders effectively suing themselves and in net terms being no better off. Evidence to the committee focused on the ease with which shareholder class actions may be triggered by an alleged breach of Australia's continuous disclosure provisions. Reform is required to continuous disclosure laws given the increasing prevalence of this type of shareholder class action.
Temporary amendments were made to continuous disclosure laws in 2020 to raise the bar for establishing a breach, both for private and regulator action. The committee recommends these temporary arrangements be made permanent.
Competing class actions are frequently shareholder class actions. The adverse consequences of increased costs and delays are exacerbated by the economically inefficient nature of shareholder class actions. The committee recommends limiting class actions with claims in corporations law to the Federal Court so as to avoid additional challenges when competing shareholder class actions are filed in different jurisdictions. This reform would also eliminate the possibility of law firms running shareholder class actions on a contingency fee basis.
There is an intention for the multiple class action regimes operating at the federal and state level to be consistent. Throughout the report, various issues are discussed which eventuate, wholly or in part, due to inconsistencies in power or approach across class action regimes. The committee makes recommendations which seek to address these inconsistencies, to increase certainty and to reduce complexity.
Moreover, the committee's recommendations on class action procedure relate to the federal class action system. If some or all of these recommendations are implemented, there is potential for the class action and litigation funding markets to file more class actions in jurisdictions with more favourable regulations and court rules. The committee recommends the Australian Government work with state and territory governments to achieve consistent class action regimes across jurisdictions.
The Committee's recommendations are
R 1 the Australian Government investigate legislative change which promotes procedural proportionality in class actions, with the objective of facilitating the pursuit of class actions where the potential costs and drawbacks are balanced against the potential benefits for the parties to litigation, the class members, as well as the impacts on court resources, regulatory outcomes and the public interest.
R 2 Part IVA of the Federal Court of Australia Act 1976 (Cth) be amended to introduce an express power for the Federal Court to resolve competing and multiple class actions. The power should maintain the Federal Court's discretion to allow more than one class action with respect to the same dispute to continue.
R 3 the Federal Court's Class Actions Practice Note be amended to include:
- a requirement that the Federal Court holds a selection hearing to determine which of the competing or multiple class actions should proceed, the Federal Court should select a class action which advances the claims and interests of class members in an efficient and cost-effective manner, with regard to the stated preferences of the class members; and
- a requirement that on the filing of a class action, the Federal Court orders a standstill in that proceeding for 90 days, so that any other competing or multiple class actions can be appropriately considered and filed, and that any book building that occurs during the standstill period should be given no weight by the Federal Court.
R 4 the Australian Government seek to ensure that state and territory Supreme Courts with class action procedures adopt a protocol with the Federal Court similar to the Protocol for Communication and Cooperation Between Supreme Court of New South Wales and Federal Court of Australia in Class Action Proceedings and the Protocol for Communication and Cooperation Between Supreme Court of Victoria and Federal Court of Australia in Class Action Proceedings.
R 5 Part IVA of the Federal Court Act be amended to introduce an express power to order class closure orders, modelled on, or similar to, section 33ZG of the Supreme Court Act 1986 (Vic).
R 6 the criteria for the Federal Court to apply in determining whether to close the class or re-open the class should be set out in the Federal Court's Class Actions Practice Note. The committee also recommends that if an order to close the class is made, it should be final unless the Federal Court finds that it is in the interests of justice to re-open the class.
R 7 the Australian Government legislate to address uncertainty in relation to common fund orders, in accordance with the High Court's decision in BMW Australia Ltd v Brewster; Westpac Banking Corporation v Lenthall  HCA 45.
R 8 Part IVA of the Federal Court Act be amended so that litigation funding agreements with respect to class actions must expressly provide a complete indemnity in favour of the representative plaintiff against an adverse costs order.
R 9 the Federal Court not approve a litigation funding agreement unless the agreement provides a complete indemnity for adverse costs.
R 10 Part IVA of the Federal Court Act be amended to include a statutory presumption that a litigation funder in a class action provide security for costs.
R 11 Part IVA of the Federal Court Act be amended to introduce:
- a requirement for a litigation funding agreement to obtain approval of the Federal Court to be enforceable; and
- a power for the Federal Court to reject, vary or amend the terms of any litigation funding agreement when the interests of justice require.
R 12 Part IVA of the Federal Court Act be amended to require that any litigation funding agreement in a class action in the Federal Court is governed by Australian law and the Federal Court approves a litigation funding agreement only if the agreement provides that the litigation funder submit irrevocably to the jurisdiction of the Federal Court.
R 13 the Australian Government amend the Federal Court's Class Actions Practice Note to the effect that, pursuant to section 54A of the Federal Court Act at any point in a proceeding, the Federal Court may appoint a referee to act as a litigation funding fees assessor.
R 14 a litigation funding fees assessor appointed by the Federal Court be a professional with market capital or finance expertise.
R 15 section 43 of the Federal Court Act be amended to expressly state that the Federal Court can make a costs order against a litigation funder.
R 16 the Federal Court's Class Actions Practice Note state the may order the costs of the work undertaken by a referee appointed by the Federal Court as a litigation funding fees assessor be paid by a litigation funder, in circumstances where the conduct of a litigation funder justifies such an order being made.
R 17 the Federal Court should require the following information to accompany an application for approval of a class action settlement. The information below should be published following the judgment approving a settlement: the date the proceeding commenced; the estimated number of class members before opt out; the number of people who have opted out; the number of registered class members; the number of funded and unfunded class members; the identity and location of the litigation funder; the amount of security for costs paid; the estimated value of the claims at the outset and at the time of settlement; the settlement sum and any non-monetary relief; the funding commissions payable under litigation funding agreements; the total amount of the funding commission (and per cent of the gross settlement sum) that the litigation funder would be paid, as the case may be: − pursuant to its contractual entitlements under the litigation funding agreements; − following a funding equalisation order (if one is sought); − following a common fund order (if one is sought); and − following any other order to share costs across class members. the total costs broken down into legal fees, counsel's fees, expert fees and their disbursements; any costs orders paid in the proceedings; payments to representative plaintiffs (their claims and recognition payments); other reimbursements and payments, including pursuant to cy-près orders; the average payment to all class members, funded class members and unfunded class members (and the per cent of the gross settlement sum); the number of class members who reached compromises, executed releases or covenanted not to sue during the class action, the estimated value of their claims and the value of such releases (aggregated and anonymised); and the amount of corporate tax paid in Australia by the litigation funder in the three previous financial years.
R 18 the Federal Court's Class Actions Practice Note be amended to:
- introduce a presumption that the Federal Court is to appoint a contradictor in instances where there is the potential for significant conflicts of interest to arise, or complex issues are likely to arise at the settlement approval application;
- include guidance on scenarios in which a conflict of interest is likely to arise, including: − where there is a material conflict between the interests of the representative plaintiff and those of some sub-groups of class members, including between those with different sorts of interests or claims, and between those who have signed up with the litigation funder and/or the representative plaintiff's solicitor and those who have not; − where the proposed return to the class members does not appear to be in accordance with the possible prospects of success; − where an issue arises as to whether some class members should be included or excluded from claiming settlement proceeds where they did not register in time pursuant to some registration process ordered by the Federal Court to identify the number, identity and claims of class members; − where there is an application, or an order has been made, for a common fund order or a funding equalisation order, or an equivalent order; and − where it is proposed that the solicitors for the representative plaintiff are to be appointed as the administrator of the settlement and where there may be other means available to administer the scheme more cheaply, efficiently or quickly;
- ensure the Federal Court retains discretion to appoint a contradictor and provide non-exhaustive guidance for the Federal Court as to the factors to which it should have regard when considering whether to exercise its discretion to appoint a contradictor; and
- ensure the Federal Court may order the costs arising from the work undertaken by a contradictor be paid by the plaintiff law firm, or the litigation funder, in circumstances where the conduct on the part of the lawyer or the litigation funder justifies such an order being made.
R 19 the Australian Government implement a procedure to facilitate communication of class members' concerns and objections to the settlement to a contradictor, when appointed. Class members should be informed of the contradictor's appointment in the class action and the questions to be determined by the contradictor. One option which should be considered is the introduction of such a power in the notice provisions in Division 3 of Part IVA of the Federal Court Act and supplemented by processes described in the Federal Court's Class Actions Practice Note.
R 20 the Australian Government consult on: the best way to guarantee a statutory minimum return of the gross proceeds of a class action (including settlements); whether a minimum gross return of 70 per cent to class members, as endorsed by some class action law firms and litigation funders, is the most appropriate floor; and whether a graduated approach taking into consideration the risk, complexity, length and likely proceeds of the case is appropriate to ensure even higher returns are guaranteed for class members in more straightforward cases.
R 21 the Australian Government review the feasibility of applying the Australian Financial Services Licence and the Managed Investment Scheme regimes to lawyers operating on a contingency fee arrangement in class actions.
R 22 the Australian Government consider options to establish rules that govern the ability of lawyers to charge an uplift fee on the total amount of legal costs in class action proceedings, with particular reference to: uplift fees which are conditional on a successful outcome; and the potential appropriateness of capped uplift fees of less than 25 per cent on the total costs.
R 23 the Federal Court's Class Actions Practice Note be amended to require that the first notices provided to potential class members by legal representatives clearly describe: the obligation of legal representatives to avoid and manage conflicts of interest; and the detail of any conflicts in that particular case.
R 24 the Federal Court's Class Actions Practice Note be amended to require that, in a litigation funded class action, the first notices provided to potential class members by legal representatives clearly describe:
- the obligation on litigation funders to avoid conflicts of interest;
- the obligation as a holder of an Australian Financial Services Licence to have arrangements to manage conflicts of interest;
- if the litigation funder is the responsible entity of a registered Managed Investment Scheme, to place the interest of members above their own in the instance of a conflict; and
- the detail of any conflicts in that particular case.
R 25 the representative plaintiff's lawyers and litigation funders be required to disclose the following to the Federal Court:
- any potential conflicts of interest;
- any new conflicts or potential conflicts which arise after the first case management conference; and
- the conflict management policy when applying to the Federal Court for approval of a litigation funding agreement.
R 26 the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 and the Legal Profession Uniform Conduct (Barristers) Rules 2015 be amended to prohibit solicitors, law firms and barristers from having a financial or other interest in a third-party litigation funder that is funding the same matters in which the solicitor, law firm or barrister is acting. 'Other interest' should encompass other arrangements that do not necessarily amount to a pecuniary interest in the litigation funder, but which nonetheless may give rise to the likelihood that the interests of the litigation funder may be prioritised over the interests of the representative plaintiff or class members, including common directorships, family ties and ongoing and/or reciprocal commercial arrangements.
R 27 the Australian Government consider options for the Federal Court to have the power to hold parties, their lawyers, and litigation funders to the same standards of conduct in class actions, including: sections 37N and 43 of the Federal Court Act be amended so as to impose on litigation funders the obligation to act consistently with the overarching purpose in section 37M of the Federal Court Act and to permit the Federal Court to order costs against litigation funders for failure to act consistently with the overarching purpose; and the Federal Court Act be amended to reflect the statutory standards of conduct in sections 16 to 26 of the Civil Procedure Act 2010 (Vic), including requirements such as: − the statutory standards apply to conduct in court, to interlocutory or appeal stages, and in respect of dispute resolution processes; and − the Federal Court have the express power to order costs against litigation funders for non-compliance with the overarching purpose of section 37N, as well as the power to order other disciplinary sanctions such as remedying the contravention or preventing a specific step or action being taken.
R 28 the regulations issued by the Treasurer which clarify that litigation funders require an Australian Financial Service License and that they be regulated as Managed Investment Schemes. Noting that ASIC has provided relief from a number of MIS requirements, the committee recommends the Australian Government legislate a fit-for-purpose MIS regime tailored for litigation funders. However, the committee recommends that the Australian Government consult on the best way to exempt not-for- profit litigation funders who held charitable status at the time the regulations were issued, have run no more than three class actions in the last five years, and exist solely to support and protect the members of the associated charitable entity.
R 29 the Australian Government permanently legislate changes to continuous disclosure laws in the Corporations (Coronavirus Economic Response) Determination (No. 2) 2020.
R 30 the Australian Government amend Part 9.6A of the Corporations Act 2001 and section 12GJ of the Australian Securities and Investments Commission Act 2001 so that exclusive jurisdiction is conferred on the Federal Court with respect to civil matters, commenced as class actions, arising under that legislation.
R 31 irrespective of whether none, some, or all of the committee's recommendations regarding the Federal Court's class action regime are adopted and implemented, the federal, state and territory governments work towards achieving consistency in class action regimes across jurisdictions.