Australian Financial Review Editorial Calls for Class Action Constraints

An editorial from the Australian Financial Review called on the Australian government to regulate the explosion of securities litigation in the country.

The current system, they said, is “fueled by the prospect of big court payouts to enterprising third party funders that would only enrich a few at the expense of many,” since lawyers and third party funders are entitled to take large amounts from class action judgments and settlements and the possibility for overlapping claims as two reasons why the system needs fixing. The outlet’s editorial board said an “American-style litigation culture of ambulance-chasing class actions by aggrieved shareholders is unlikely to enrich anyone other than the legal entrepreneurs who drive it.”

The editorial called for reforms since Australian class actions “have now too easily become less a fight for justice than an opportunist business model for some that does economic damage to companies in the process.”