Approval of litigation funding agreements ? What is the Court looking for?

The recent Federal Court decision of Jones v Great Southern Ltd (in liq)¹ is a good reminder that liquidators seeking Court approval of a litigation funding agreement should ensure sufficient evidence is presented to the Court to satisfy all of the matters relevant to the Court's discretion.

In this case, the liquidators of three related companies sought the Court's approval of a funding agreement in relation to four potential claims, namely:

• two potential claims in respect of possible breaches of directors' duties,
• a potential claim against the companies' auditors, and
• a potential claim against unidentified third parties in relation to the exchange of an interest in a managed investment scheme for shares.