Insurers’ Alert – Litigation Funding: In the Public Interest

On 30 August 2006 the High Court of Australia delivered two eagerly awaited judgments in Campbells Cash & Carry Pty Limited v Fostif Pty Limited [2006] HCA 41 and Mobil Oil Australia Pty Limited v Trandlen Pty Limited [2006] HCA 42 that are likely to set the stage for future reform and possible regulation of litigation funding. As the Mobil decision followed Fostif it is only necessary to consider Fostif.

In Fostif the High Court considered whether the actions of a litigation funder amounted to an abuse of process in the context of "opt-in" proceedings commenced against various wholesalers by tobacco retailers. The tobacco retailers were seeking to recover the value of tobacco licence fees collected from them by the wholesalers over the course of several weeks after the High Court, in earlier proceedings, had declared the fees invalid.