Conflicts of interest in class actions and proof of debt schemes - ASIC issues guidance

In brief - Increasing role played by litigation funders in class actions points to need for guidance

On 22 April 2013, the Australian Securities & Investments Commission (ASIC) released Regulatory Guide 248 Litigation schemes and proof of debt schemes: Managing conflicts of interest (RG 248).

It provides guidance to litigation funders to avoid conflicts of interest whilst undertaking class actions, to insolvency practitioners managing proof of debt schemes (which have many similarities to class actions), and to their legal advisers. This guidance is critical in the present environment of increasing class actions and litigation funder presence.

Why is it important to manage conflicts of interest in class actions?