Litigation Funding "Damaging" Australian Economy, Former Law Council President Says

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May 30, 2019

The former president of the Law Council of Australia, which represents the country’s legal profession, said in an op-ed that third party litigation funding must be addressed because it is “damaging” the economy and “taking excessive commissions and charges from those claimants who genuinely deserve compensation.”

Stuart Clark said the practice’s growth in Australia is “not surprising” given that the profits are big, yet “ultimately paid by the class members whom the litigation funders and plaintiff lawyers are supposedly assisting.” He pointed to a case involving low-paid workers who sought compensation for “stolen wages,” but ultimately received less than half of their award because of costs owed to lawyers and funders.

Clark proposed several policy solutions in the wake of the country’s elections. Reforms include limits on fees, a continued ban on contingency fees, and a new regulator to monitor the industry.