The Australian Parliamentary Joint Committee on Corporations and Financial Services released a report this week calling for more stringent oversight of the country’s “highly unique” litigation funding industry.
“The report is a watershed moment for civil justice in Australia, the birthplace of third party litigation funding (TPLF), and for the litigation funding industry in general, as the use of TPLF is increasing worldwide,” according to a new blog post by the U.S. Chamber Institute for Legal Reform (ILR).
The committee was formed to investigate the robust litigation funding and class action industry in Australia. Attorney General Christian Porter asked the committee for a report on how these industries are functioning and interacting with one another saying there “is clear evidence that the system is not delivering fair and equitable outcomes.” The committee released its 454-page report this week, which largely concurs with Porter’s assertion.
The report says Australia “has become a global hotspot for international investors, including many based in tax havens and with dubious corporate histories, to generate investment returns unheard of in any other jurisdiction – in some cases of more than 500 per cent.” This was the result of a “light touch” approach to regulation, “under which no successful action by a regulator has ever been taken against a funder.”