In 2013, the Government introduced certain exemptions for litigation funders, including exemptions from licencing requirements and prudential supervision.1
Since then, the number of class actions filed in Australia has tripled, with the overwhelming majority of these class actions being funded by litigation funders. Litigation funding is the funding of legal action, in return for a share of the settlement or court-awarded payout.2
Litigation funding is not only used for class actions; Lavan has significant experience in dealing with litigation funders where only one client exists.
Litigation funders play an important role in the legal system by increasing access to justice for a significant number of people.
Litigation funding operates in such a way that it allows a significant number of claimants to join ranks and, along with the financial support provided by litigation funders, take on large organisations with significantly more financial resources.
ASX-listed litigation financier, IMF Bentham, claims to have a nearly 90% success rate on 192 completed cases since 2001.3
In March this year, the Attorney-General Christian Porter announced his move to establish the Parliamentary Joint Committee on Corporations and Financial Services Inquiry (the Committee).
The Committee will be tasked with inquiring into all aspects of the class action system, including whether further regulation of litigation funders is needed.
The Committee announced the inquiry in light of concerns raised, that people accessing litigation funders may not have been receiving their fair share of class action settlements.
Litigation funders play a critical role in the legal sphere. If you are considering entering into any litigation funding agreement, you should seek legal advice. Agreements between litigation funders and clients are often long and complex.
Further, during any proceedings, litigation funders may require updates on the status of proceedings, information with respect to the strategies involved, and other information with respect to the matter. These can be complex issues to navigate.
Lawyers who have experience dealing with litigation funders and forming proactive working relationships can help make what is often a stressful, time-consuming and expensive process easier and more cost effective.
Lavan has experience in working with litigation funders, so please contact us if you need litigators with this experience.