Professional Documents
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Introduction
Through the legalisation of champerty in 1993, the rise of class action litigation and the
introduction of a continuous disclosure regime for listed entities, the legal industry has
emerged with relatively sophisticated models seeking to extract value, including legal fees
and sharing in the award of damages. My objective is to assess whether there is a need for
increased regulation to limit rent-seeking behaviour. Specifically, the article will review the
decision of Treasury Wines Estates v Melbourne City Investments Pty Ltd in which the
majority in the Court of Appeal in Victoria found proceedings initiated for the predominant
purpose of generating legal fees can result in an abuse of process.
Champerty
Historically, the common law in both Australia and the United Kingdom has prohibited
champerty (that is, supporting litigation in exchange for a portion of the proceeds for the
litigation) on the basis that it is contrary to public policy.1 In 1993 the Maintenance,
Champerty and Barratry Abolition Act 1993 (NSW) abolished this common law prohibition in
New South Wales. In Victoria, champerty was abolished by section 32 of the Wrongs Act
1958. Champertys permissible use was confirmed in the High Court of Australias decision
in Campbells Cash & Carry Pty Ltd v Fosif Pty Ltd.2
The prohibition of champerty has its origins as a result of abuses which afflicted the
medieval administration of justice where royal officials, nobles or other persons of wealth
and influence would assign their name to fraudulent or doubtful claims for a share of the
proceeds of a favourable outcome.3 Developments throughout the nineteenth century in the
1 Peter ODonahoo et alia Focus: Comercial Litigation August 2006 Allens Linklaters
<http://www.allens.com.au/pubs/ldr/foldr30aug06.htm>.
2 Campbells Cash & Carry v Fosif Ltd (2006) 229 CLR 386.
3 Giles v Thompson [1993] 3 All ER 321 [328].
1
form of formalised code of ethics for the legal profession greatly reduced the risk of
misadministration of justice.4
Proponents of champerty argue that third party litigators allow aggrieved parties who
ordinarily would not have the funds to litigate to be provided access to justice. In the United
Kingdom, Lord Phillips in Gulf Azov Shipping Co Limited v Idisi observed:
Public policy now recognises that it is desirable, in order to facilitate access to justice, that
third parties should provide assistance deigned to ensure that those who are involved in
litigation have the benefit of legal representation. 5
This view was affirmed in the 2007 Civil Justice Council paper titled The future funding of
litigation- alternative funding structuresThe English courts have taken the view that third party funding is now acceptable in the
interests of access to justice, particularly where the prospective claimant is unable to fund
their claim by any other means.6
Such views have been echoed in Australia most notably by Wigney J who opined The grim
reality is that many modern-day representative proceedings would never be commenced but
for the involvement of commercial litigation funders. 7 The Productivity Commission is also a
proponent of litigation funding stating:
Litigation funders provide an important complement to regulatory activity by enabling
aggrieved parties to initiate and maintain claimsOverall, litigation funding promotes access
to justice, and is particularly important in the context of class actions where, although action
could create additional benefits when viewed from a broader or community-wide perspective,
(often inexperienced) claimants might not take action given the scale of their personal costs
and benefits.8
4 Ibid.
5 Gulf Azov Shipping Co Limited v Idisi [2004] EWCA Civ 292 [54].
6 Civil Justice Council, The future funding of litigation-alternative funding structures 2007,
[127]
7 Blairgownie Trading Ltd v Allco Finance Group Ltd [2015] FCA 811 [225].
8 Productivity Commission Access to justice arrangements in Australia (December 2014)
Productivity Commission Final Report, 624.
2
In October 2009, the Full Federal Court held that third party funding arrangements in a
shareholder class action constituted a financial product, namely, a managed investment
scheme and therefore required an Australian Financial Services (AFS) Licence 9. In
November 2009, in response to the decision in Brookfield Multiplex Ltd v International
Litigation Partners Pte Ltd10, the Australian Securities and Investments Commission (ASIC)
released ASIC Class Order [CO10/333]: Funded representative proceedings and funded
proof of debt arrangements, which provided temporary relief for third party litigation funders.
In early 2011, International Litigation Partners Pte Ltd v Chameleon Mining NL 11 held that
funding arrangements were a financial product for the purposes of Chapter 7 of the
Corporations Act and funders of class actions were required to hold AFS Licences and meet
conditions set out in the AFS Licensing regime including disclosure and membership to an
external dispute resolution scheme.
In July 2012, the Federal Government enacted regulations which excluded third party
funders from the definition of managed investment scheme within Chapter 7 of the
Corporations Act 2001 (Cth). The public policy approach adopted through this amendment
can be summed up in the explanatory Statement:
The Government supports class actions and litigation funders as they provide access to
justice for a large number of consumers who may not otherwise have difficulties in resolving
disputes. The Governments main objective is therefore to ensure that consumers do not lose
this important means of obtaining access to the justice system.
In October 2012, the High Court held that litigation funders did not require an AFS Licence
as the arrangements were credit facilities. In response to this, the Government enacted
legislation to address concerns as to whether the National Credit Code applied to third party
litigation funders.
The legislation requires adequate procedures for managing conflicts of interest and label
third party litigation funding as a financial product rather than a credit facility. The legislation
includes an exemption from holding an AFS Licence.
The development of class actions in the Australian legal landscape occurred with the
introduction of representative proceedings in the Federal Court of Australia Act 1976 (Cth)
in 1992. The key features of the Australian Class Action system are:
Threshold requirements must be met to commence a class action including that there must be
seven or more persons with claims against the same defendant, the claims must be in respect
of, or arise out of, the same, similar or related circumstances; and the claims must give rise to
their claims;
Every potential claimant who falls within the class definition is a member of the class unless
The policy objectives of the class action regime are to enhance access to justice, reduce
cost, and promote efficiency in the use of court resources.
Since the first shareholder class action in Australia in 1999 13 there have been over 40
shareholder class actions which have commenced, but only two have been the subject of a
full trial and none have proceeded to final judgment. In the 12 months to June 2015, class
action settlements were over $1 billion. It took a period of more than 10 years to reach this
same aggregated amount. The most common class action suit are breaches of continuous
disclosure.
Continuous Disclosure
The foundations of Australias continuous disclosure regime began in June 1991, when
Attorney General, Michael Duffy, commissioned the Companies and Securities Advisory
Committee (CASAC) to evaluate the need for a statutory based disclosure regime for listed
entities.14 The report was published in September 1991 15 and recommended enhanced halfyearly disclosure. The report also recommended that directors of disclosing entities be
12 Ross Drinnan et alia Class actions in Australia (2015) Allens Linklaters <
http://www.allens.com.au/pubs/pdf/ldr/papldrmay15-02.pdf>
13 Ibid.
4
Australias continuous disclosure regime was legislated with the insertion of the Corporate
Law Reform Act 1994, specifically sections 1001A-1001D. The Explanatory Memorandum
for Corporate Law Reform Bill 1993 explained:
In the case of the ASX, proposed section 1001A is intended to pick up the continuous
disclosure requirements of the ASX Listing Rules, in particular Listing Rule 3A(1) which
requires immediate disclosure of material information19
Under proposed sections 1001A(2) and (3) a listed disclosed entity will be guilty of a criminal
offence if it contravenes the continuous requirements of a securities exchange by intentionally
or recklessly failing to notify the exchange price sensitive information. 20
The provision was subsequently transferred to its current position in Chapter 7 of the
Corporations Act through the Financial Services Reform Act 2001 (Cth). One major change
to these reforms was the introduction of the civil penalty provisions, which meant that a
statutory breach was no longer limited to intentional, reckless or negligent contraventions
of the Listing Rule. Therefore, for civil liability, strict liability rather than fault-based liability
was introduced.
Under section 674 and Listing Rule 3.1 an entity has a disclosure obligation once it becomes
aware of any information concerning it that a reasonable person would expect to have a
material effect on the price or value of the entitys securities. A reasonable person is taken to
expect a material effect if the information in question would, or would be likely to, influence
persons who commonly invest in securities.
There are several carve-outs for this requirement under Listing Rule 3.1A, namely:
warrant disclosure;
The information is generated for the internal management purposes of the entity; or
The information is a trade secret; and
The information is confidential and ASX has not formed the view that the information
These continuous disclosure requirements are in contrast to the United States, which
requires public companies to disclose certain financial information to the corporate regulator,
the Securities and Exchange Commission on a periodic basis. Therefore, price sensitive
information which is required for disclosure in Australia would not require public disclosure
until the next periodic report.
An action for breach of continuous disclosure obligations arises when claimants either:
1. Acquired shares (or other equity securities) when they would not have done so but
for the alleged conduct; or
20 Ibid.
6
2. Acquired shares (or other equity securities) at a higher price than they would have
otherwise paid but for the alleged conduct21.
In the 12 months to June 2015, ten actions were filed alleging breaches of the continuous
disclosure obligations and/or misleading and deceptive conduct. Five of these share a
common plaintiff Mark Elliott, and two of the actions share a common defendant, Vocation.
Table 1 shows a list of companies which have settled continuous disclosure class actions:
Company
Concept Sports
Settlement Date
2006
Harris Scarfe
Telstra
Aristocrat
Downer EDI
Village Life (Fig Tree
Developments)
Sons of Gwalia
AWB
Multiplex
Media World
OZ Minerals
Credit Corp Group
Centro
Nufarm
NAB
Sigma Pharmaceuticals
Transpacific
Industries
Group
GPT
White Sands Petroleum
Leighton Holdings
2006
2007
2007
2008
2009
Settlement Amount
$3M
(reported,
terms
confidential)
$3M
$5M
$144.5m
Approx. $20M (confidential)
$3M
2009
2010
2010
2010
2011
2012
2012
2012
2012
2012
2012
Approx. $70M
$39.5M
$100M
$0
$60M
$6.5M
$200M
$46.6
$57.5M
$35M
$35M
2013
2014
2014
$75M
$3.25M
$69.45
As evidenced by the table the average settlement for continuous disclosure breaches was
$48.815 million.
Arguably one of the more noteworthy developments in continuous disclosure case law was
the development of indirect causation articulated by Perram J in Grant-Taylor v Babcock &
Brown Limited (in Liquidation).22 Indirect causation is a tool intended to overcome the need
to prove reliance by each and every group member affected by the alleged breach. It is
articulated as follows:
21 Ross Drinnan et alia, Shareholder class actions in Australia (May 2015) Allens
Linklaters.
22 [2015] FCA 149.
7
In Grant-Taylor v Babcock & Brown Limited (in Liquidation), Perram J in obiter dicta indicated
that he likely would have agreed with the submissions of the plaintiffs that reliance is a
sufficient condition for establishing causation it is not a necessary one.24
With such developments in continuous disclosure, class actions and litigation funding there
is the perfect storm for abuse. An example of such undesirable effects is considered in
Treasury Wines Estates v Melbourne City Investments Pty Ltd.25
Maxwell P and Nettle JA found that the proceeding was an abuse of process as it was
brought for the predominant purpose of obtaining collateral advantage from the existence of
the proceeding, as opposed to a collateral advantage following from any judgment or
settlement. Additionally, the communities confidence would be shaken if the legitimate
purpose were to enable income to be generated by solicitors.
Maxwell P and Nettle JA followed the reasoning articulated in Williams v Spautz:
As the law stands, the only legitimate purpose for bringing a proceeding is to vindicate legal
rights or immunities by judgment or settlement. Consequently, unless the predominant
purpose of bringing a proceeding is a legitimate purpose, the proceeding is an abuse of
process and is liable to be stayed.26
It was observed by Maxwell P and Nettle JA observed that there are two types of collateral
advantages. The first being,
a proceeding will be regarded as an abuse of process by reason only that it is brought for the
purposes of taking collateral advantage of any judgment or settlement in vindication of legal
rights or immunities which might be obtained in the proceeding. 27
The Victorian Supreme Court of Appeal found that the action which presents itself was in the
second category as MCI has no interest in vindicating its rights, or obtaining a remedy as
such.29
The court found that the alleged breach of disclosure was immaterial to MCIs purpose and
that the sole purpose was to create an income-generating vehicle for the solicitor.
In dissent Kyrou JA found that the proceeding was not an abuse of process as the legal
process contained robust safeguards. He found that MCI could not achieve its predominant
purpose of earning fees unless it pursued the proceeding to a successful conclusion and
26 Williams v Spautz (1992) 174 CLR 509.
27 Treasury Wines Limited v Melbourne City Investments Pty Ltd (2014) 318 ALR 121 [11].
28 Ibid.
29 Ibid [12].
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obtained an order for costs from the court or negotiated a favourable court-approved
settlement. In Kyrou Js view the earning of fees was an entitlement or benefit which the law
confers to successful litigants.
Kyrou J approved of the view taken by the trial judge that the proceedings were not
oppressive:
The proceedings are no more oppressive than any other proceeding simply because they are
brought by a plaintiff who has engaged its sole director and shareholder as its lawyer. I also
do not view the proceedings themselves as bringing the administration of justice or the legal
profession into disrepute.30
Kyrou J (at [43]) articulated the test applied by the trial judge for restraining a legal
practitioner from acting for a particular client:
(a) the test to be applied is whether a fair-minded, reasonably informed member of the public
would conclude that the proper administration of justice requires that a lawyer should be
prevented from acting, in the interests of the protection of the integrity of the judicial process
and the due administration of justice, including the appearance of justice;
(b) The jurisdiction is exceptional and is to be exercised with caution;
(c) Due weight should be given to the public interest in a litigant not being deprived of the lawyer
of his or her choice without due cause;
(d) The timing of the application may be relevant, in that the cost, inconvenience and
impracticality of requiring lawyers to cease to act may provide a reason for refusing to grant
relief; and
(e) Whether the lawyer will be required to give evidence in the proceeding may be taken into
account.31
In Kyrou Js view Mr Elliotts replacement as MCIs solicitor means that the predominant
purpose can no longer be achieved; the only benefit that Mr Elliott can now attain from the
proceedings is a damages award in favour of his company, MCI.32
Furthermore, Kyrou J argued that laws contained in Part 4A of the Supreme Court Act 1986
provide safeguards against nefarious conduct, including the supervision of the Supreme
Court. Specifically, Kyrou J asserted that
Under s 33T(1), the court may, on application by a group member, substitute another group
member as lead plaintiff if the lead plaintiff is not able adequately to represent the interests of
30 Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 3) [2014] VSC 340
[36].
31 Treasury Wines Limited v Melbourne City Investments Pty Ltd (2014) 318 ALR 121 [43].
32 Ibid 121 [74].
10
the group members. Under s 33N, the court can make an order that the proceedings cease to
be a group proceeding under Part 4A if circumstances arise that warrant such an order. Under
s 33V, the courts must approve any settlement or discontinuance of the proceeding while it
remains a group proceeding under Pt 4A. Finally, under s 33ZF the court may, of its own
motion, make any order it thinks is appropriate to ensure that justice is done in the
proceeding.33
Kyrou J provides a compelling argument that legislative instruments within Part 4A to provide
safeguards to ensure that the administration of justice is adequately performed. At the same
time the court recognised developments within the legal landscape have resulted in
innovation within the sector:
there would have been very few cases in the history of Anglo-Australian litigation
where a plaintiff has instituted a proceeding with the predominant purpose of
enriching its solicitor, and indeed it would probably not have been a realistic
possibility until the advent of the modern form of class action litigation during the last
20 years34.
The majority justices stress that
the policy considerations which inform the law relating to abuse of process are twofold: to
ensure that the processes of the court are used fairly, and to maintain public confidence in the
ability of the court to function in that way.35
In reviewing the possible need for legislative reform, I will now assess the application of the
form of review. Namely, whether it will involve changes to the litigation funding legislation,
continuous disclosure regime or class action legislation, or in the alternative whether
legislative change is even required.
companies designed to ensure they hold adequate capital relative to their financial
obligations and properly inform client of relevant obligations and systems for managing risks
and conflicts of interest.
The Productivity Commission recommended that regulation of the ethical conduct of litigation
funders should remain a function of the courts. The licence should require litigation funders
to be members of the Financial Ombudsman Scheme (FOS). The Productivity Commission
also recommended that court rules should be amended to ensure that the discretionary
power to award costs against non-parties and obligations to disclose funding agreements
should apply equally to lawyers charging damages-based fees and litigation funders.
The author agrees with the recommendation of the Productivity Commission and argues this
will assist in achieving the previously mentioned public policy objective to provide access to
justice to persons who may not have the resources to launch an action. Framework should
be made to create a dual regulator, similar to the licensing regime for Thoroughbred
Syndicates which are regulated by both the state racing regulator (in New South Wales, this
is Racing NSW) and by ASIC. The proposed regime should require The Law Society of the
relevant state to administer conduct in relation to legal matters and professional ethics, while
ASIC would administer requirements including disclosure such as the distribution of Product
Disclosure Statements, Financial Services Guide and Client Agreements which should have
specific requirements. All third party litigation funders should be a member of FOS where
disgruntled consumers (plaintiffs) may raise complaints. The regime will also require that
litigation funders maintain minimum financial adequacy to ensure that they are able to fund
all actions for the duration of the action. Under a proposed regime, at least one of the
responsible managers of the litigation funder must be an admitted lawyer and hold a
current practising certificate. Such a view is shared by Croft J who argues that it would
seem prudent to require funders have an Australian registered office and assets located in
Australia.36. Croft J opined that [t]hese measures would be preferably be contained in
enforceable legislation although an alternative would by United Kingdom style selfregulation, which is popular amongst funding.37
Currently, settlement must be approved by courts and require that legal fees are fair and
reasonable, and such assessment is not applied to litigation funders. 38 Although Flink J did
find that the Court had power pursuant to s 33ZF to approve a settlement subject to the
36 Clyde Croft On the Brink of Regulation: The Future of Litigation Funding in Class
Actions (2014) 88 ALJ 698, 702.
37 Ibid.
12
litigation funders fee being limited to an amount.39 Reform is needed for either Court
approval of Litigation Funding Fees or limits should be provided for these within the licensing
regime.
To rely on such a provision, the entity would need to make the disclosure judgement in good
faith, reasonably inform itself about the subject matter of the disclosure and rationally believe
that the disclosure judgement is in accordance with the Listing Rules. The disclosure
judgement rule would remain subject to the overarching requirements to comply with the
spirit and intent of the Listing Rules subject to the supervision of ASX. Furthermore, the Law
Council of Australia argues:
38 Section 11, Practice Note CM 17- Representative Proceedings Commenced under Part
IVA of the Federal Court of Australia Act 1976 (Cth).
39 Parma-a-Care Laboratories Pty Ltd v Commonwealth [2011] FCA 277 [42].
40 Margery Nicoll Continuous disclosure (16 December 2011) Law Council of Australia, 6.
41 Ibid.
13
Appropriately drafted, such a disclosure judgement rule could preserve the open and
pragmatic supervision by ASX of its continuous disclosure rules, as well as ASICs ability to
serve an infringement notice for an alleged contravention of s 674(2). This would maintain the
current regulatory oversight and enforcement model, which is a reasonably efficient and
effective way to achieve prompt disclosure, swift application of sanctions and remedial
actions.42
The alternative solution was put forward by Koeck43 who argues for a statutory due diligence
defence. Koeck submitted that a statutory defence should be available to a company officer
who decided on reasonable grounds, possibly in reliance on a carve-out to Listing Rule 3.1
not to disclose information. The drafting of the legislation will be similar to the due diligence
defence available for a failure to disclose information in a prospectus. A due diligence
defence against an officer under s 728(3), or s 729, is provided by s 731(1), (2). This
situation arises where a director fails to disclose a material omission in a prospectus. To rely
on the defence, the office must prove that they made all reasonable inquiries and believed
on reasonable grounds that there was no misleading statement or omission. The defence
propagated by Koeck is a defence for the company officers and would not extend to the
company itself. The interaction between the ASX Listing Rules, ASIC and the Company is
unclear. Furthermore, the proposals failure to protect a listed entity from liability where that
listed entity is acting in good faith and attempting best practice, limits the effectiveness of
such reform. Should such reform be enacted, it should be enacted to supplement the
disclosure judgement rule. Such reform would allow company officers and the company to
be protected from liability provided that they act in good faith and follow generally accepted
practices. The disclosure judgement rule and the disclosure due diligence defence will
interact with one another, requiring significant due diligence into a potential disclosure matter
before a company or company officer may rely on the disclosure judgement rule.
2. That the courts power to terminate a class action pursuant to s 33N(1) of the Federal
Court Act be removed, or that the court utilise its case management powers to
minimise respondents interlocutory application;
3. That the court has the power to order cy-prs remedies;
4. That a guardian should be appointed to act on behalf of the group members interest
and to provide an independent perspective to the Court.
Proposal One
This proposal follows the decision of Dorajay Pty Ltd v Aristocrat Leisure Ltd which found it
is not permissible to define the group as including only clients of one law firm. However,
Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd found that it is permissible
to restrict the group to those who enter a funding arrangement with a particular funder prior
to the commencement of proceedings. In the authors view such allowances constrain the
objectives of enhancing access to justice and judicial efficiency. However, the current system
does not provide a solution to the free-rider problem, first articulated by Garrett Hardins
Tragedy of the commons. This concept relates to persons who are not involved in the costs
process but do not opt-out of the action. A more efficient solution to this is to provide a
funding equalisation factor to the award, where such factor is equal to the costs of the
proceedings.
Proposal Two
One of the nuances in the class action landscape is the volume of interlocutory applications
with the most common conclusion being a settlement approved by the Court. Section 33N(1)
of the Federal Court Act provides that an action may be struck out if the applicant fails to
properly plead its claim. According to Stuart Clark and Christina Harris, this has led to
a number of class actions being struck out on the ground that the pleadings did not disclose
the basis of the group members case but were merely a smorgasbord of the possible
combinations and permutations of claims which may apply to the applicant or any other group
member.44
Critics say that applications made under s 33N are often used as tactical delay and is
antithetical to the aims of class action legislation, reducing efficiency, increasing expense
and adding considerable complexity to proceedings.45 In the authors view, procedures such
44 Stuart Clark and Christina Harris The Push to Reform Class Action Procedure
in Australia: Evolution or Revolution? 32 Melbourne University Law Review 776791, 784.
45 Bernard Murphy and Camille Cameron, Access to Justice and the Evolution of
Class Action Litigation in Australia (2008) 30 Melbourne University Law Review.
15
as s 33N are a necessity in our legal system and promote efficiency as interlocutory
proceedings allow for the respondent to re-plead their case at a later stage.
Proposal Three
A cy-prs distribution is a distribution of unclaimed settlement funds. This proposal argues
that courts should have the power to award damages to third party litigation funders, instead
of funds being deducted from the plaintiffs to pay for the legal fees. Such a proposal has two
drawbacks, firstly, it could promote behaviour involving small claims for the plaintiffs with
litigation funders funding actions to receive fees. Secondly, the proposal breaks the
fundamental principle that compensation should be made to put the plaintiff in the position
which he or she was in before any contravening conduct occurred. Cy-prs distribution
provides an award to a party who elects to enter the litigation.
Proposal Four
This proposal requires that class action settlements be assessed by a court appointed costs
expert. This is in contrast to lawyers seeking to have their legal fees approved by the court
being responsible for retaining a costs expert to provide evidence of reasonableness of the
fee sought, the Court would retain the costs expert to perform this function 46. Michael Legg
argues that
[g]reater independence of the costs expert would mean that both the Court and group
members could have greater confidence in the opinion provided, although the Court would
still need to give its approval.47
The author agrees, with this argument put forward by Michael Legg and further believes that
such reform would allow for protection of plaintiffs who are not actively involved litigation and
may be disadvantaged by this. The counter argument is that such a procedure will increase
costs in the litigation and reduce the efficiency in the settlement process. These arguments
are valid, however, the clear benefits, in the authors view, outweighs these potentially
negative externalities.
Conclusion
The legal landscape in Australia has changed significantly in the last 20 years, and indeed, it
is likely to continue to change significantly in the next 20 years. The legalisation of
champerty and introduction of the class action regime have perhaps been the greatest
contributors to the changes in the legal landscape. With these introductions, law has been
opened up to entrepreneurs. The case of Melbourne City Investments v Treasury Wines Ltd
demonstrates in my view two things:
Firstly, that common law doctrines such as abuse of process can still be used to
Most susceptible to the class action are listed entities with alleged breaches in the
continuous disclosure regime. Such actions appear to be low hanging fruit for litigation
funders of class actions and has resulted in over a billion dollars in settlements in the past
decade.
To prevent such rent-seeking behaviour while also ensuring efficient markets through prompt
disclosure, I have argued for the following:
1. the introduction of both a due diligence defence to disclosure for company directors
and for a disclosure judgement rule similar to that found in section 180(2) of the
Corporations Act 2001 (Cth). Both provisions would interact and complement each
other while also ensuring adherence to the continuous disclosure regime;
2. the introduction of a licensing regime for litigation funders which requires minimum
financial adequacy measure, requirement for disclosure and the ability for aggrieved
parties to bring complaints to an external dispute resolution scheme. In my view, the
AFS licensing regime is the adequate system for litigation funders, with oversight
from both ASIC and the relevant Law Society of the Litigation Funders state;
3. The introduction of a regime allowing for the Court to appoint guardians to protect the
4.
17
incompatible with the basic principle of awarding damages to put the plaintiff back
into the place before any contravention.
It is my strong belief that these changes will facilitate access to justices for aggrieved parties,
as well as ensuring adherence to the continuous disclosure regime. The changes will also
result in reduced compliance costs for companies, reduced insurance premiums and less
cases within our Courts.
18