ASIC issues litigation funding guidance to manage conflicts of interest

Key Points:

Recognising the impact that funders have on the legal landscape in Australia, should we be content with ASIC's light touch regulatory approach in Regulatory Guide 248?

With the expansion of litigation funding driving an increase in class actions being pursued against corporates across Australia, questions have arisen about how best to manage the inevitable conflicts of interest.

ASIC has recently released Regulatory Guide 248: Litigation schemes and proof of debt schemes: Managing conflicts of interest.

Conflicts of interest

Everyone accepts the potential for conflicts to arise where litigation funders are involved in litigation. ASIC Commissioner John Price has referred to this as an "inherent tension":