King & Wood Mallesons –
A new report showed a drop in litigation-funded class actions in Australia during 2020-21 with a record of 63 class actions filed during the period, notwithstanding regulatory pressures upon litigation funders.
The KWM report (see download link below) said that at least 20 settlements were approved in the 12 months to June 30 2021, which represented at least $850 million in settlements.
Research showed the three main types of claims were consumer claims (24) related to Covid-19 actions, pharmaceutical products and medical devices, claims against the state (12) for the recovery of wages for indigenous workers and Covid-19 outbreaks in Victoria, and employment claims (11) lodged against public health services relating to wage underpayment.
The report examined why, 15 years since the landmark Fostif case found litigation funding was not an ‘abuse of process,’ litigation funder-backed cases have fallen to their lowest level in 7 years –
as new federal regulations and the introduction of a contingency fee regime in Victoria reshape the market.
It also looked ahead to map a landscape poised for further change, as the Federal Government contemplates wide-ranging reform recommendations.