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Class actions unlocked by new govt regulation
At least 10 class actions being stymied by a litigation funding stalemate were unlocked yesterday as the Federal Government confirmed it would introduce new regulation to undo a Federal Court decision made last year.
The New Lawyer
AT least 10 class actions being stymied by a litigation funding stalemate were unlocked yesterday as the Federal Government confirmed it would introduce new regulation to undo a Federal Court decision made last year.
The decision, announced yesterday by the minister for financial services, superannuation and corporate law, Chris Bowen, undoes the court ruling, which meant class actions backed by litigation funders are not required to register and operate as managed investment schemes. Class action law firm Maurice Blackburn has welcomed the Government’s decision, which will reverse the legal impact of last year’s Full Federal Court Brookfield Multiplex decision. “[The decision] restores access to justice for thousands of retail investors and cartel victims who, because of the Court decision have been unable to join class actions,” said Bernard Murphy, Maurice Blackburn chairman. Minister Bowen said he had asked Treasury to ensure the new regulations are made at the end of the financial year, which is also the deadline for the relief the Australian Securities and Investments Commission has given class actions that would be disrupted by the ruling. Maurice Blackbrurn said the announcement reflects the view of those consumers consulted by the government. “Today’s announcement reflects the overwhelming view of all those involved - that the managed investment regime in corporations law is not an appropriate way to regulate litigation funding,” said Murphy. “The Full Federal Court ruling only came about in the first place because the defendant in a class action being run by Maurice Blackburn wanted to derail that case. “The flow-on effect of the ruling effectively stopped the funding of new class actions, which was a terrible outcome for shareholders and other consumers who were denied an appropriate avenue to recoup losses caused by corporate wrongdoing,” he said.
