The Government is seeking stakeholder views on exposure draft legislation to promote a fair and reasonable distribution of class action proceeds in proceedings involving third party litigation funders.
If progressed, the proposed measures would respond to key recommendations made by the Parliamentary Joint Committee on Corporations and Financial Services in its report on litigation funding and the regulation of the class action industry, including recommendations 7, 11, 12, 13 and 16.
The proposed measures would enhance court oversight over the distribution of class action proceeds and establish a rebuttable presumption that a return to the general members of a class action litigation funding scheme of less than 70 percent of their gross proceeds is not fair and reasonable. The proposed measures would also require plaintiffs to consent to become members to a class action litigation funding scheme before funders can impose their fees or commission on them.
Consultation on the exposure draft of these proposed measures follows the Government’s earlier consultation on Recommendation 20 of the PJC’s report, on the design elements of a guaranteed statutory minimum return of class action proceeds to class members.