Attempts To Constrain The ‘Free Riders': Common Fund And Equalisation Orders In Australian Class Actions

Co-authored by Alexa Williams

Litigation funders have recently sought to improve their financial recoveries by applying to Australian Courts for 'common fund orders' in class actions. Common fund orders require all class members who seek to benefit from the proceeds of settlement or judgment to contribute equally to the cost of legal representation and litigation funding costs, regardless of whether or not they had entered into a funding agreement.

Despite initial reluctance to make such orders,¹ a litigation funder finally achieved success in the Full Federal Court decision of Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Ltd (Money Max)² in late 2016. You can read more about our commentary on that case here.