Posted on 25 Jan 2019
Leading law firm Slater and Gordon has welcomed the release of the Australian Law Reform Commission's (ALRC) Report into class actions.
The Commission yesterday handed down a series of recommendations following its 12-month Inquiry into Class Action Proceedings and Third Party Litigation Funders.
Slater and Gordon Head of Class Actions Ben Hardwick said: "The Commission's recommendations are, for the most part, sensible and measured. The Commission certainly hasn't seen the need for wholesale changes to the regime, and largely seeks to codify the case management techniques that have been developed by the Courts. On the whole it is a ringing endorsement of laws that have been providing access to justice for tens of thousands of ordinary Australians over the last 27 years.”
A key recommendation is the proposal to introduce contingency fees in class actions.
Under the proposed model, lawyers would be permitted to charge clients fees calculated at a percentage of the damages recovered as an alternative to the current time-costed billing model.
"This is the third consecutive government report which has recommended the introduction of contingency fees. Anyone who spends any time analysing this issue comes to the same conclusion that it is overwhelmingly in the interests of consumers to do so," Mr Hardwick said.
“As a leading plaintiff law firm with decades-long experience in obtaining redress for clients, we firmly believe alternative forms of charging fees will offer a further means for our clients to collectively advance their claims and pursue cases which may not otherwise be viable,” he said.
"Even those normally on the other side of the class actions debate, would have to concede that a court supervised contingency fee model, such as proposed by the Commission, will create greater options for everyday Australians and that it makes economic sense to make that option available," Mr Hardwick said.
Mr Hardwick affirmed Slater and Gordon’s position that the Commission’s recommendation to review the legal and economic impact of continuous disclosure obligations was unjustified.
“We are confident that any such review would ultimately find what the empirical data consistently shows, that the combination of strong continuous disclosure obligations with the Australian class action regime results in an effective and efficient mechanism that is vital for protecting the interests of mum-and-dad retail investors against the overwhelming resources of large corporations,” Mr Hardwick said.
"Given what we have seen through the Banking Royal Commission, now is not time to relax disclosure and transparency standards for corporate Australia.
“The Australian Securities and Investments Commission is best placed to assess the efficacy of our continuous disclosure laws and in its submission stated that shareholder class actions were a legitimate part of the overall regime that provided benefits to consumers and financial markets, that their availability improves market disclosure practices and that they had seen no evidence of companies or directors being inappropriately targeted."
Mr Hardwick welcomed the Commission’s proposal to put out to tender the work involved in settlement scheme administration.
“We see competition as a good thing. For over 25 years we have developed quality techniques and systems for distributing compensation to group members in class actions in the shortest and most cost-effective way possible," he said.
"Ultimately, group members in class actions want to talk to lawyers not accountants, so any system that routes group members through intermediaries back to lawyers, will ultimately prove to be less efficient."