Australian High Court Ruling Will Disrupt Litigation Funders' Business Model

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December 05, 2019

The High Court of Australia ruled yesterday that courts have no power to order class members to pay a portion of their recoveries to litigation funders, which Law.com says could be “a major blow” to the industry.

At issue were “common fund orders,” which require all class members to pay litigation funders out of the proceeds of the settlement or judgment regardless if they signed an agreement with the funder or the firm. These orders made investing in cases more profitable. As a result of the ruling, though, funders may have to return to the old business model.

12/05/2019