Should England Learn From Australia?
by Mary H. Terzino
Originally appeared at Our Legal Future on February 18, 2014
On 23 January 2014, a draft Consumer Rights Bill was introduced in Parliament that for the first time would bring “opt-out” class actions (claims filed on behalf of a group of claimants) to England & Wales in the field of competition litigation. If this bill is enacted, England & Wales will join Australia as Commonwealth realms allowing opt-out class actions—which, in contrast to opt-in class actions, require claimants to take action to withdraw from a case. While Australia has borrowed its language and much of its culture from England, in this instance, England can learn a valuable lesson from Down Under by rejecting opt-out class actions and properly regulating the related practice of third party litigation financing (TPLF).
Australia has experienced major problems with its litigation system recently. Those problems stem from the symbiotic relationship between class actions and TPLF. In TPLF, investors who otherwise have nothing to do with the underlying dispute agree to finance litigation in exchange for a portion of the claimant’s recovery.
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