AUSTRALIA Law and Practice Contributed by: Greg Williams, Alexandra Rose, Caitlin Sheehy and Sarah Aljassim, Clayton Utz
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 Prod- uct 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 “representa- tive proceeding” ) the Federal Court of Australia and the Supreme Courts of New South Wales, Queensland, Tasmania, Victoria and Western Australia. The class action procedure is often used in product liability claims. The rules governing representative proceedings are largely identical in each of the six jurisdic - tions. In order to bring representative proceed - ings, there must be seven or more persons who have claims against the same legal person, aris - ing out of the same, similar or related circum - stances and giving rise to a substantial common issue of law or fact. However, it is not necessary for at least seven persons to be individually iden - tified ‒ nor is there a requirement, as in many other jurisdictions ‒ that the common issues pre - dominate over those that are not common. Australian representative proceedings are “opt out” , meaning that all persons who fall within the group definition will be bound by the out - come of the proceedings unless they choose to opt out. Unlike many other jurisdictions, there is
Australian-based, with the information for the remaining two unknown). Litigation Funding Arrangements Litigation funding arrangements typically involve a funding agreement between the funder and claimant, a retainer agreement between the law - yer and claimant, 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 arrange - ments is an arrangement whereby the litiga - tion funder promises 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 percent - age of any compensation they receive. Such arrangements are very common in Australian 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 Aus - tralia in June 2022, amendments were intro - duced to the Corporations Regulations 2001 (Cth) that exempt litigation funding schemes from the managed investment scheme regime, where those schemes meet the relevant defini - tion under the regulations. Before these amend - ments, 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 subject of review and debate.
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