AUSTRALIA Law and Practice Contributed by: Greg Williams, Alexandra Rose and Caitlin Sheehy, Clayton Utz
a successful party may recover from an unsuccess - ful party for tasks undertaken during the course of litigation (such as the drafting of correspondence or electronic document management). Other recoverable costs include court filing fees and other out-of-pock - et expenses. In other jurisdictions, an assessment is made as to the reasonableness of the costs incurred. Depending on the type of proceeding commenced, more particular rules may apply in relation to costs. By way of example, in representative proceedings or class actions, statutory provisions restrict costs orders being made against class members – other than those who commenced the proceedings. 2.15 Available Funding in Product Liability Claims Australia has a well-established litigation funding industry. Although the exact number is unknown, in December 2020 the Parliamentary Joint Committee on Corporations and Financial Services indicated that 22 litigation funding companies were known to be operating in Australia (14 of which were foreign-owned or based overseas and six of which were Australian- owned or Australian-based, with the information for the remaining two unknown). A more recent industry study published in late 2025 records 32 businesses involved in the litigation fund - ing industry in Australia as at November 2025. Litigation Funding Arrangements Litigation funding arrangements typically involve a funding agreement between the funder and claimant, a retainer agreement between the lawyer and claim - ant, and an agreement between the litigation funder and lawyer that sets out the terms on which the funder agrees to pay the costs of the litigation. However, the models of litigation funding are evolving and the law in this area is also changing. At the core of such litigation funding arrangements is an arrangement whereby the litigation funder prom - ises to pay the legal costs and disbursements of the litigation and to meet any adverse costs order – in exchange for which, the claimant promises to pay the funder a percentage of any compensation they receive. Such arrangements are very common in Aus -
tralian class actions; however, they are traditionally less common in product liability class actions than in other forms of class actions (eg, shareholder class actions). Reform and Development Litigation funding is an area of rapid reform and development in Australia. Following a decision of the Full Court of the Federal Court of Australia in June 2022, amendments were introduced to the Corpo - rations Regulations 2001 (Cth) that exempt litiga - tion funding schemes from the managed investment scheme regime, where those schemes meet the rel - evant definition under the regulations. Before these amendments, litigation funding arrangements could be regulated as managed investment schemes under the Corporations Act 2001 (Cth). Further reforms to litigation funding regulations continue to be the sub - ject of review and debate. Contingency Fees Australian lawyers are permitted to enter into “no win, no fee” arrangements and, in the case of such arrangements, to charge an uplift on their fees of up to 25% in the event of success. They are not otherwise permitted to charge contingency fees, except in class actions in the Supreme Court of Victoria, where the court approves the arrangement. See further discus - sion in 3.1 Trends in Product Liability and Product Safety Policy . 2.16 Existence of Class Actions, Representative Proceedings or Co-Ordinated Proceedings in Product Liability Claims There are six Australian courts that have a class action procedure (referred to as a “representative proceed - ing”): the Federal Court of Australia and the Supreme Courts of New South Wales, Queensland, Tasmania, Victoria and Western Australia. The class action pro - cedure is often used in product liability claims. The rules governing representative proceedings are largely identical in each of the six jurisdictions. In order to bring representative proceedings, there must be seven or more persons who have claims against the same legal person, arising out of the same, similar or related circumstances and giving rise to a substantial common issue of law or fact. However, it is not neces -
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