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Class action funder goes into administration after $11.7m fine
The barristers behind the Banksia class action case have declared bankruptcy and gone into administration after being fined $11.7 million.
Lauren Croft
Australian Funding Partners (AFPL), a company specialising in class actions, was ordered by a Supreme Court judge in October to pay $11.7 million for “dishonourable” and “fraudulent” attempts to claim exorbitant legal fees from participants in the Banksia class action case.
In October, Victorian Supreme Court judge John Dixon found that the litigation funder, as well as five lawyers, engaged in “egregious conduct in connection with a fraudulent scheme” whereby they intended to claim over $19 million in legal costs and funding commission from the Banksia settlement.
He noted that the “contravener’s conduct had shattered confidence in, and expectations of, lawyers as an honourable profession, and corrupted the proper administration of justice,” according to the judgment.
AFPL was founded by lawyer and majority shareholder Mark Elliott in 2014, and the firm became one of the pioneers in class actions in Australia, including the landmark case against Myer. Mr Elliott died in a farm accident last year, shortly after deleting emails surrounding fee pricing and arrangements from his phone – which were recovered by the court.
Mr Elliott and other AFPL lawyers, including SC Norman O’Bryan, were severely criticised by Judge Dixon for overcharging creditors of Banksia. He ordered that Mr O’Bryan and another barrister, Michael Symons, be removed from the roll of legal practitioners and referred the judgment to the Victorian Director of Prosecutions. In addition, he ordered that solicitors Anthony Zita and Alex Elliott each “show cause” as to whether they are fit to remain on the roll.
Barry Wight and Rachel Burdett of Restructuring Advisory firm Cor Cordis have been appointed administrators of AFPL, which has since gone bankrupt.
“Part of our role is to investigate the affairs of this litigation funder, which will include the issues raised by Justice John Dixon and the actions of various parties associated with the company,” Mr Wright said.
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
