Class Action Blog

Why are so many class actions bankrolled by litigation funders? Simple. Because class actions are high risk, highly complex and highly expensive.

The Murray Goulburn class action, taken on behalf of aggrieved unit holders in the dairy business and which settled late last year, has been cited repeatedly in the current Australian Parliamentary inquiry into class actions and litigation funding. To some, the returns generated by Omni Bridgeway, which funded the successful action, were too high. To others – including the one person in the best position to judge – they were reasonable. This article explains a number of critical factors that need to be considered.

No company wants to face a class action from its own shareholders. They are disruptive, time-consuming, reputation-shredding and expensive – potentially very expensive. Fortunately, there is a proven way to avoid class actions: don’t break the law.

Andrew Saker, CEO of Omni Bridgeway, welcomed the opportunity to appear before the Australian Parliamentary Joint Committee on Corporations and Financial Services on 13 July 2020. The Joint Committee is inquiring into litigation funding and the regulation of the class action industry.

Andrew Saker, CEO of Omni Bridgeway, explains how corporate wrongdoing is the real reason D&O premiums are rising in Australia.

Omni Bridgeway has welcomed the Parliamentary inquiry into litigation funding and class actions that is currently underway in Australia. It provides an opportunity to improve the Australian class action system. However, opponents of litigation funding and class actions are using the inquiry to spread misinformation, in particular about returns generated by funders on successful actions. We set out some facts.

The Parliamentary inquiry into litigation funding and class actions announced earlier this year seeks to ensure fair and equitable outcomes for claimants and group members. As a pioneer of the industry and largest funder in Australia, Omni Bridgeway fully supports these aims. Part of our business is to provide finance and access to justice to claimants and group members in class actions who lack the resources to pursue complex and costly disputes.

Dispute finance plays a valuable role in the community providing access to justice for those without the means to pursue complex and costly disputes. Omni Bridgeway Limited provides non-recourse finance and strategic know-how to claimants and group members in class actions, that enables them to seek redress without risk in the event of an unsuccessful outcome.

Global disputes funder Omni Bridgeway Limited welcomed the Supreme Court of New South Wales judgment in November 2019 in the Brisbane floods class action. The court found that the claim for negligence, brought by the class representative, against each of the State of Queensland, Queensland Bulk Water Supply Authority trading as Seqwater and Sunwater Limited, was proven.

The High Court of Australia has handed down its judgment(1) on common fund orders in the most significant ruling relating to litigation funding since the Fostif case(2). A majority of the High Court held that neither the Federal Court of Australia nor the Supreme Court of New South Wales have the power to make a ‘common fund order’ (CFO), at least not in the early stages of litigation.

Key issues in class action litigation were debated at an important conference presented under the auspices of the IMF Bentham Class Actions Research Initiative with UNSW Law. Watch the videos from the event.

Listing of all IMF Class Action Conference Videos

The Hon Justice Michael Lee (Federal Court of Australia) explores the issue of whether the courts have the power to adjust litigation funders’ contractual commission rates.

Cutting edge research on Settlement Distribution Schemes was presented by Associate Professor Michael Legg (UNSW Law) and Rebecca Gilsenan (Principal, Maurice Blackburn Lawyers), at the IMF Bentham Class Action Conference.

Class action experts came together to explore issues in finalising class actions. Panel experts included: Hon Justice Jack Forrest (Supreme Court of Victoria); Professor Simone Degeling (UNSW Law); Bill Petrovski (William Roberts Lawyers); Jason Betts (Herbert Smith Freehills); Brett Jordan (Senior Technical Claims Advisor, Major Loss Financial Lines Claims, AIG Australia Limited), and was moderated by Wayne Attrill (IMF Bentham).

IMF Bentham Senior Investment Manager, Wayne Attrill, discusses the development of class actions over the past 25 years, and whether we have reached another turning point in the courts’ acceptance of litigation funding of class actions.

In 2006 the High Court of Australia, by a majority in the renowned Fostif decision, approved of a litigation funder agreeing by contract to meet the costs of a legal proceeding in return for a share of any sums recovered. This chapter examines the growth, developments and regulation of the litigation funding industry.

In the presentation to the College of Law, IMF Senior Investment Manager, Wayne Attrill, discusses some of the advanced issues in class actions including the role of a funder in facilitating class actions, "competing" class actions, common fund orders and the regulation and future of litigation funding in class actions.

The importance of litigation funding to facilitate access to the civil justice system in Australia is now widely accepted. The article explains the funding process and the assistance that a funder can bring to funded proceedings, to the benefit of clients and lawyers alike.

In July 2013, Regulations were introduced to require funders to have "adequate practices" for managing any conflicts of interest that might arise in litigation they fund. The article gives an overview of the conflicts management regime, how it is managed and the impacts it will have for litigation funders.