This week's edition of TGIF considers the landmark
decision of the High Court in BMW Australia Ltd v Brewster;
Westpac Banking Corporation v Lenthall [2019] HCA 45 and what it
might mean for insolvency practitioners.
Decision
On 4 December 2019, a majority of the High Court held that
Courts are not empowered to make common fund orders. Common fund
orders arose in the context of class actions funded by a third
party litigation funder. They provided for all group members to pay
to the funder a set proportion of any damages the group members may
recover, irrespective of whether the group members had signed a
litigation funding agreement.
One possible implication of the High Court's decision will
be that, for smaller litigation funders, there will be new barriers
to funding class actions. That might, in turn, increase the
appetite to fund insolvency litigation. We explain that reasoning
below.
