Class actions need more regulation, parliamentary inquiry hears – NEWS.com.au

The funding of class actions in Australia has been put under the microscope of a parliamentary committee. Legal experts and the nation’s largest litigation funder on Monday raised concerns about the oversight of the industry.
Former Productivity Commission commissioner Warren Mundy rejected suggestions a rise in the number of class actions in Australia was about raising money for “evil foreign shareholders”.
“(The) core proposition that this is about delivering justice to people is absolutely the case,” Dr Mundy said, adding it was a reflection on the growth of the economy.
“Should we be concerned about how well people do from the proceedings … the answer is absolutely yes.
“The solution, however, is not banning access to financing of litigation by persons who voluntarily enter into matters.”
UNSW law professor Michael Legg said a Federal Court judge should be allowed to review, change or set fees taken by lawyers or class litigation funders from victims.
Omni Bridgeway chief executive Andrew Saker said the returns the company earned from funding class action cases was proportionate to the risks it took on.
“We support the introduction of the minimum 50 per cent return of gross proceeds to class action group members,” he said.
Labor and government committee members clashed during the inquiry.
Opposition legal affairs spokesman Mark Dreyfus has condemned the inquiry as a sham that aims to deny justice and fair compensation to ordinary Australians.
“Litigation funding and class actions provide a vital path to justice for Australians trying to uphold and enforce their rights,” he said.
Menzies Research Centre spokesman James Mathias, whose submission came under scrutiny, said the regulation overseeing the industry was non-existent.
From August, litigation funders will need an Australian financial services licence.
They would also be required to comply with the managed investment scheme rules.

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