Key Asks

 

  • Class actions (or collective action) should be restricted to cases where individuals actively choose to participate.  No one should be permitted to start a claim on behalf of someone else, without that person’s knowledge (whether in relation to competition law or any area of law).
  • If class actions are permitted at all, they should be subject to strict safeguards against abuse, including an early assessment by a judge as to whether the claim has any merit, and the application of criteria, such as whether the claims of all claimants in the case are sufficiently similar for the case to proceed as a class action.
  • In all cases, it must be possible to pursue those taking weak or bogus claims for costs.
  • It should be prohibited for class actions to be funded on the basis that a share of any proceeds will be paid out to backers (whether the lawyers pursuing the case or—especially—third party investors with no other stake in the case).
  • The Government should commit to a periodic report on collective actions, setting out in detail how such actions are providing benefits to claimants and at what cost to society.
  • Third party litigation funders must be regulated, with all providers subject to registration and compulsory rules.
  • It should never be possible for a case to be funded in secret.  All parties—and especially the court—should be aware of who will actually benefit from any awards made.
  • Third party litigation funding must be prohibited in relation to class actions of all kinds.
  • Litigation funders should be liable for full adverse costs if a claim they have instigated and supported proves to be meritless.  They must be required to have adequate capital to meet such costs.
  • Funders should be prohibited from backing out of claims they have instigated and supported, leaving claimants vulnerable and solely liable for adverse costs.
  • The fee structure of any funding arrangements should be capped, and each arrangement in each case should be subject to advance approval by the court to ensure fairness and that the real victims, rather than the funders, will be compensated.
  • There should be a statutory prohibition on funders seeking to influence or direct proceedings, or have a say in any outcome—this is a matter solely for the claimants and their legal advisors.