In Short
The Situation: Litigation funding is a major
driver of Australian class actions. Challenges to common fund
orders were mounted in the Federal Court and Supreme Court of New
South Wales by defendants.
The Decision: After a joint hearing, but in
separate judgments, the Full Federal Court of Australia and the New
South Wales Court of Appeal held that the class action legislation
provided courts with power to make a common fund order. The Courts
dismissed challenges based on the order not being an appropriate
exercise of judicial power and giving rise to a contravention of
Australian Constitution s 51 (xxxi).
Looking Ahead: The confirmation of the
availability of common fund orders now means that attention must
turn to ensuring that such orders, consistent with the terms of the
legislative provisions relied upon, "ensure that justice is
done in the proceedings" and the fee paid to the funder is
fair, reasonable and proportionate.
