COVID-19 Toolkit – Common fund order made in increasing
class action market
On 6 May 2020, Justice Murphy of the Federal Court of Australia
made a common fund order in favour of a litigation funder on
settlement1, despite the High Court having generally
rejected the notion of common fund orders as recently as December
20192. This will unquestionably act as a fillip for
litigation funders in an environment, caused by the increasing
economic impact of the COVID-19 pandemic, that was already primed
for an increase in class actions.
We review the background to, and effect of, this decision in the
light of the current COVID-19 environment.
Common fund orders
Common fund orders have generally been made at the early stage
of class action proceedings and provide for the quantum of a
litigation funder's remuneration to be fixed as a proportion of
any payment ultimately made in the proceedings, for all group
members to bear a proportionate share of that liability, and
