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LCA releases new guidance to lawyers
The Law Council of Australia has released new guidance to help legal practitioners deal with the use of crowdfunding in litigation.
Emma Musgrave
The LCA’s new “Guidance Note for Australian Legal Practitioners” offers a toolkit for lawyers to ensure they take “an ethical approach to crowdfunding”.
“Crowdfunding is not inherently unethical. The crowdfunding of legal expenses has developed as a means to provide access to the courts and legal redress, particularly as the public funding of legal aid has been restricted by successive governments,” Mr Moses SC said.
“However, like anything, the crowdfunding of legal expenses needs to be managed so that it is not misused. This involves striking a balance. Regulation that is too restrictive could have a dampening effect on access to justice.”
Mr Moses said the new guide promotes an ethical approach to crowdfunding rather than limiting access. It also reminds practitioners to be mindful that their conduct in relation to crowdfunding does not discredit the profession, he said.
“Lawyers have ethical and professional obligations to which they must adhere when engaging in legal practice. These ethical obligations have formed the foundation for the guidance note,” Mr Moses SC said.
“The guidance note does not dictate how clients should use their funds, it merely outlines relevant regulatory and ethical frameworks and how crowdfunding of legal expenses fits into those frameworks.”
According to a statement issued by the LCA, in providing advice to clients, lawyers should tell clients about:
• the applicable regulations specific to the crowdfunding model to be used;
• any other applicable legislation or regulations;
• the consequences of disclosing information about the case – including privilege/waiver of privilege, the law of confidential information, and the requirement not to disclose information provided by another party under compulsion; and
• the risks and ramifications of making misrepresentations when seeking crowdfunding.
“Practitioners should also address with clients how funds should be managed. This includes any surpluses and what happens if insufficient funds are raised, and the possibility and impact of adverse costs orders,” the statement noted.
Emma Musgrave
Emma Musgrave (née Ryan) is the managing editor, professional services at Momentum Media.
Emma has worked for Momentum Media since 2015, including five years spent as the editor of the company's legal brand - Lawyers Weekly. Throughout her time at Momentum, she has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.
Prior to joining Momentum Media, Emma worked in breakfast radio, delivering news to the Central West region of NSW, before taking on a radio journalist role at Southern Cross Austereo, based in Townsville, North Queensland.
She holds a Bachelor of Communications (Journalism) degree from Charles Sturt University.
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