Earlier this week, Ai Group, an Australian business group, pushed for stronger class action laws to address the soaring cost of directors’ and officers’ (D&O) insurance, according to a report in Insurance News. Au. According to the report, in some cases D&O insurance has increased by as much as 600%. Ai Group urged an ongoing parliamentary inquiry into litigation funding and the regulation of the class action system to take up its list of 10 measures to ease the burden on the business community. The measures include the introduction of a national licensing regime for litigation funders, outlawing opt-out arrangements in class actions and the banning of contingency fees in all Australian jurisdictions.
At the hearing, the Insurance Council of Australia informed the Parliamentary Joint Committee on Corporations and Financial Services that premiums rose at least 75% last year and an average of 88% in 2018. Citing a recent Australian Law Reform Commission report, in cases where litigation funders were involved the median return to plaintiffs was only 51% of the amount awarded, Ai Group CEO Innes Willox said. When there is no litigation funding, plaintiffs received a median 85% of compensation.