Access to Justice—Litigation Funding and Group Proceedings: Report (html)
Recommendations
[Recommendations in relation to the Supreme Court of Victoria are expressed with the words ‘The Supreme Court should consider,’ rather than as a direct recommendation to act, to acknowledge and signify the independence and standing of the Court.]
1 The recommendations in this report to amend the Supreme Court Act 1986 (Vic) and the Supreme Court of Victoria’s practice note on class actions[2] should be implemented with the aim of advancing the nationally consistent regulation and conduct of class actions.
2 The Victorian Government should advocate through the Council of Australian Governments for stronger national regulation and supervision of the litigation funding industry.
3 The Supreme Court should consider amending its practice note on class actions to require the disclosure of litigation funding agreements to the Court and other parties to class actions in similar terms to paragraph [6] of the Federal Court of Australia’s practice note on class actions.[3]
4 In addition to the introduction of disclosure obligations in class actions, the Supreme Court should consider requiring the plaintiff’s lawyers to provide the Court with a copy of the litigation funding agreement whenever a litigation funder is involved in a proceeding where a number of disputants are represented by an intermediary. Any funding agreement disclosed to the other party should be able to be redacted to conceal information which might reasonably be expected to confer a tactical advantage on that party.
5 The Supreme Court should consider amending its practice note on class actions to provide that, if a class action is funded by a litigation funder:
(a) the representative plaintiff’s lawyers should notify class members (whether they are actual or potential clients), in clear terms and as soon as practicable, of any applicable litigation funding charges and any material changes to those charges
(b) the obligation to notify is satisfied if class members have been provided with a document that properly discloses those charges
(c) failure to meet the obligation to notify may be taken into account by the Court in relation to settlement approval under section 33V of the Supreme Court Act 1986 (Vic).
6 The Supreme Court should consider amending its class action practice note to require the representative plaintiff’s lawyers in funded class actions to provide to the Court, when the writ for the proceeding is filed, a brief Funding Information Summary Statement that accurately sets out litigation funding charges and key conditions in a simplified form, for publication on the Supreme Court’s website.
7 The Attorney-General should propose to the Council of Attorneys-General that the Council:
(a) agree, in principle, that legal practitioners should be permitted to charge contingency fees subject to exceptions and regulation
(b) agree to a strategy to introduce the reform, including the preparation of draft model legislation that regulates the conditions on which contingency fees may be charged and maintains the current ban in areas where contingency fees would be inappropriate.
8 Part 4A of the Supreme Court Act 1986 (Vic) should be amended to provide the Court with the power to order a common fund for a litigation services fee, on application by a representative plaintiff, whereby the fee is calculated as a percentage of any recovered amount and liability for payment is shared by all class members if the litigation is successful.
Approval of a common fund of this type should be subject to the following conditions, set out in legislation or the Supreme Court’s practice note on class actions, as appropriate:
(a) An application for the order would be sought from the Court at the commencement of proceedings.
(b) The percentage allocated for the fee would be indicated when the application is made but approved by the Court at an appropriate time, most likely at settlement approval.
(c) The litigation services for which the fee is charged should include: all services provided by the law firm; provision for security for costs if required; disbursements; and an indemnity for adverse costs.
9 A certification requirement should not be introduced in Victorian class actions.
10 Section 33N of the Supreme Court Act 1986 (Vic) should be amended to provide the Supreme Court with the power of its own motion to order that a proceeding no longer continue under part 4A.
11 The Supreme Court should consider amending its practice note on class actions to include guidance for the Court and parties on managing competing class actions. The guidance should reflect current practice, as it has developed over time, and allow for the Court to respond flexibly in the circumstances of each case.
12 The Attorney-General of Victoria should propose to the Council of Attorneys-General that a cross-vesting judicial panel for class actions be established. The judicial panel would make decisions regarding the cross-vesting of class actions, where multiple class actions relating to the same subject matter or cause of action are filed in different jurisdictions.
13 The Attorney-General of Victoria should seek the agreement of the Attorney-General of New South Wales that:
(a) guidelines should be issued to legal practitioners on their duties and responsibilities to all class members in class actions, providing specific direction on the recognition, avoidance and management of conflicts of interest
(b) the Standing Committee under the Legal Profession Uniform Law should ask the Legal Services Council to ensure that such guidelines are produced and promulgated.
14 Section 33T of the Supreme Court Act 1986 (Vic) should be amended to empower the Court, of its own motion, to substitute another class member as representative plaintiff, and make other such orders as it thinks fit, if it appears that the representative plaintiff is unable to adequately represent the interests of class members.
15 Part 4A of the Supreme Court Act 1986 (Vic) should be amended to include the principles that govern the exercise of the Court’s power to approve a proposed settlement, currently contained in paragraph [13.1] of the Supreme Court’s practice note on class actions.
16 The Supreme Court should consider amending its practice note on class actions to include guidance for the appointment of an independent representative (commonly known as a contradictor) to assess the terms of settlement, or the terms of the settlement distribution scheme, on behalf of class members.
17 The Supreme Court should consider amending paragraph [13.5] of its practice note on class actions to require the affidavit(s) in support of settlement approval to include the following additional matters:
(a) the time at which settlement funds will be received by class members
(b) a mechanism for Court review of disputed decisions of the scheme administrator where the settlement involves complex individual assessments
(c) the application of the terms of any litigation funding agreement to the settlement, if approved
(d) how class members will be kept informed of the settlement distribution scheme, including measures to ensure the ease of accessibility of these communications for class members
(e) the proposed measures that are being taken, in the settlement distribution scheme, to ensure a just, efficient, timely and cost-effective outcome for class members.
18 The Supreme Court should consider specifying in its practice note on class actions that scheme administrators report to the Court:
(a) on a six-monthly basis, or other period as determined by the Court, regarding the performance of the settlement distribution scheme, including the costs involved and the distributions made
(b) at the completion of the settlement distribution scheme, outlining the distributions made to class members, the time taken for such distributions, the amounts charged each class member for distribution, and any outstanding amounts that were unclaimed by class members, including what was done with these outstanding amounts.
19 Part 4A of the Supreme Court Act 1986 (Vic) should be amended to specify that the Court has the discretion to make any orders in relation to the distribution of money remaining after settlement distribution.
20 In revising the pages on its website about class actions, the Supreme Court should consider ensuring that they contain the following:
(a) current and clear information on class actions generally as well as on proceedings before the Court
(b) links to the Class Action Summary Statement (Recommendation 23) and, if applicable, the Funding Information Summary Statement (Recommendation 6) for each class action
(c) standard form opt-out and settlement notices (Recommendation 21).
21 The Supreme Court should consider drafting Plain English standard form opt-out and settlement notices, in consultation with the Victoria Law Foundation, and publish these on the Court website.
22 The Supreme Court should consider amending its practice note on class actions to:
(a) specify that opt-out notices and settlement notices should, where possible, follow the standard form notices published on the Supreme Court’s website
(b) incorporate guidelines for preparing opt-out notices consistently with those contained in the Federal Court practice note on class actions.
23 The Supreme Court should consider amending its practice note on class actions to require the representative plaintiff’s lawyers:
(a) to provide the Court, when the writ for the proceeding is filed, with a brief Class Action Summary Statement for publication on its website
(b) at the same time, or before, make the Class Action Summary Statement available to class members (whether they are actual or potential clients) through, for example, publication on the representative plaintiff’s lawyers website.
24 Part 4A of the Supreme Court Act 1986 (Vic) should be amended to provide the Court with specific power to review and vary all legal costs, litigation funding fees and charges, and settlement distribution costs to be deducted from settlement amounts to ensure that they are fair and reasonable.
25 The Supreme Court should consider amending its practice note on class actions to provide guidance for the appointment of an independent costs expert by the Court to assist in the assessment of legal costs and litigation funding fees. This should take into account the guidelines contained in the Federal Court practice note on class actions relating to the use of costs experts.
26 The Supreme Court should consider amending its practice note on class actions to specify that, at the first case management conference, the Court, in exercising its powers under section 65A of the Civil Procedure Act 2010 (Vic), may ask the representative plaintiff’s lawyers to provide a memorandum of estimated legal costs and disbursements of proceedings to the Court.
27 Part 4A of the Supreme Court Act 1986 (Vic) should be amended to specify that the Court has the power to approve a common fund order, on application by a representative plaintiff, whereby all costs of proceedings are shared by all class members if the litigation is successful.
28 Section 33ZD of the Supreme Court Act 1986 (Vic) should be amended to specify that the Court may not order a class member to provide security for costs.
29 Part 4A of the Supreme Court Act 1986 (Vic) should be amended to specify that in making an adverse costs order, or a security for costs order in class actions, the Court may take into account, among other factors:
(a) the function of class actions in providing access to justice
(b) whether the case is a ‘test’ case or involves a novel area of law
(c) whether the class action involves a matter of public interest.
30 The Supreme Court should consider expanding the class action user group to include individuals with experience in class actions, either as a class member or a representative plaintiff, particularly to consult on the implementation of the Commission’s recommendations on Court powers, procedures and services.
31 The Supreme Court should consider providing additional legally qualified staff to support the role of Class Actions Coordinator in the Common Law Division and the Commercial Court in implementing the Commission’s recommendations and managing the ongoing responsibilities arising from them for the Court.