Yesterday, 3rd October 2022 ,Woodsford submitted our considered response to the Australian Treasury, in respect of the draft Corporations Amendment (Litigation Funding) Regulations 2022.
“Woodsford is in favour of the proposal that an explicit exemption be provided for litigation funding schemes from the definition of a managed investment scheme in section 9 of the Corporations Act 2001. The decision in Brookfield Multiplex Ltd v International Litigation Funding Partners Pty Ltd (2009) 180 FCR 11, and the subsequent removal in August 2020 of the relief from the MIS-requirements afforded to funded class actions, has plagued the litigation funding industry in Australia with uncertainty. The requirement that funded class actions be operated as a MIS has detracted significantly from the class action regime in Australia. The requirement reduced competition that would otherwise benefit retail clients/claimants by reducing the number of litigation funders in the market. It also significantly increased the time and cost burden of funding class actions for the funders active in the market, which made some class actions less financially viable/denied access to justice for those who would otherwise benefit from smaller funded class actions. And the requirement provided very little (if any) demonstrable benefit to any of the claimants, lawyers and funders involved in holding corporate wrongdoers to account.”
You can read our full submission here.