Victoria Law Reform Commission Report on Litigation Funding and Class Proceedings

The Victoria Law Reform Commission in Australia has tabled a final report in the state parliament on Access to Justice - Litigation Funding and Group Proceedings:

"Each of the three components—litigation funding, contingency fees, and class actions (group proceedings)—does, or has the potential to, contribute to access to justice. Litigation funding reduces the risks to litigants of taking proceedings; removing the ban on contingency fees could introduce another means of doing so; and class actions take advantage of economies of scale."

"This report, informed by the overarching issue of access to justice and the aim that litigants are not exposed to unfair risks or disproportionate cost burdens, examines the specified issues in the terms of reference, and makes recommendations in respect of each of them."

"In relation to litigation funding, the Commission makes recommendations for national regulation of the industry and greater transparency when a litigation funder is involved in proceedings. The Commission does not recommend fixed caps or limits on funding costs; rather, it encourages appropriate court control."

"In relation to the prohibition on law firms charging contingency fees, the Commission recommends that, in principle and in appropriate areas of law, lawyers should be allowed to charge contingency fees. This is also a matter which should be developed nationally, in the interests of consistency."

"In relation to class actions, the Commission’s recommendations seek to strengthen the Court’s powers [note: the Court refers to the state's Supreme Court], particularly in ensuring that a successful outcome is not unduly eroded by legal and funding fees. The Commission also makes recommendations to improve efficiency and accountability, which should reduce delays and associated costs, but has concluded that the introduction of a pre-commencement certification requirement is neither desirable nor necessary."

The state of Victoria is in south-eastern Australia and its capital is Melbourne.