Submission to the Parliamentary Joint Committee on Corporations and Financial Services

We have made a submission to the Parliamentary Joint Committee on Corporations and Financial Services inquiry into litigation funding and the regulation of the class action industry. As a global law firm, our submission draws on our local and international experience in acting in class action proceedings. A number of our Australian partners are experienced litigators and are uniquely placed to address some of the issues raised by the inquiry's Terms of Reference.

We have acted in many significant class actions in Australia in both the Federal Court of Australia and the State Supreme Courts. These include class actions relating to securities, consumer protection, product liability, mass tort and natural disasters, and financial and regulatory services.

We expect there will be a significant increase in the commencement of class actions in Australia over the coming 12 to 24 months. These class actions are likely to include not just shareholder-focused continuous disclosure claims (which we expect to continue notwithstanding the Australian Treasurer’s recently announced six month safe harbour) but also cybersecurity, employment (including workplace health and safety), and broader governance, culture and risk-related claims.

To support a class actions regime that promotes fairness for plaintiffs, class members and defendants, as well as efficiency, certainty and finality in the determination of proceedings and the responsible provision of legal services and funding, we have made the following recommendations to the Parliamentary Joint Committee:

• In addition to litigation funders being required to obtain an Australian Financial Services Licence from 22 August 2020, consideration should be given to require funders to comply with the overarching obligation in section 37M of the Federal Court of Australia Act 1976 (Cth) to assist the Federal Court in facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
• Courts should be given an express statutory power to make interlocutory common fund orders.
• Courts should be given an express statutory power to make class closure orders.
• To deal with competing class actions, we support further amendments to the Federal Court’s Class Actions Practice Note to outline the interlocutory process to be followed and the considerations to be taken into account by the Court when assessing which one of two or more competing proceedings ought to continue.
• Plaintiffs should be required to seek leave of the court to commence class action proceedings in relation to the same, similar or related facts in connection with a regulatory investigation that is underway or has concluded against a company or its related bodies corporate.
• Plaintiffs should be required to seek leave of the court to use documents in class action proceedings that have been created or produced in connection with regulatory investigations (for example, under section 25 of the Australian Securities and Investments Commission Act 2001 (Cth)).
• The uniform evidence legislation should be amended to clarify that facts agreed for the purpose of civil penalty proceedings may not be used in class action proceedings to prove a fact admitted or otherwise used in cross-examination.
• The Australian Government should consider long-term, enduring amendments to the continuous disclosure regime in the Corporations Act 2001 (Cth) to enhance certainty for companies and directors in the rapidly evolving legal, regulatory, economic and risk landscape in response to COVID-19.

You can request a copy of our submission to the Parliamentary Joint Committee by clicking the link below.

Request our full submission