Litigation Funding - Corporations Amendment Regulations 2012
- Date:27 Jan 2012
- Type:Policy Submission
This submission to Treasury is in response to the draft Corporations Amendment Regulations relating to litigation funding.
We remain of the view that funded class actions brought against corporations and directors often due to their size and scale can impose costs on the public in the form of higher consumer prices, the diminution of share value (reflected in superannuation account balances) and decreased tax revenue (as corporate profits decline). While the government and commentators have focused on the access to justice arguments which support litigation funding for major class actions, little attention has been paid to the impact of such actions on Australian productivity and the economy as a whole.
In summary, the views we express in the submission include:
||Litigation funders should have in place adequate arrangements to manage conflicts of interests, however, this requirement is only one aspect of an appropriate regulatory regime for litigation funding. |
||The Government should promptly consider implementing an appropriate regulatory regime for litigation funding. |
||Regulation 7.6.01AB purports to add a provision into the Corporations Act allowing the regulations to “impose obligations” on persons affected by an exemption, this regulation may be ultra vires, given that it may exceed the regulation making power conferred by the Corporations Act. |
||The difficulty facing defendants in obtaining security for costs in funded class actions continues to be underestimated. |
Download our Submission to Treasury on Corporations Amendment Regulations 2012 Relating to Litigation Funding (PDF 3MB).