Dodgy class actions take a blow: Buying shares just so you can sue won’t work

It's hard to imagine a world where lawyers don't act to uphold justice... but a recent case in Victoria might have just touched on the Lionel Hutz perception of the profession.

In 2012, Mark Elliot, a solicitor in Victoria, created a company called Melbourne City Investments (MCI), of which he was the sole director and shareholder. Mr Elliot incorporated MCI so that it could:

1. purchase tiny amounts of shares in public listed companies like Treasury Wine Estates Ltd; and
2. bring class actions against those companies for breaches of the Corporations Act on behalf of itself and all other shareholders.

And here's the clincher. The class actions would then allow Mr Elliot to act as the lawyer for MCI and, when the proceedings concluded, get a favourable costs order for his fees. MCI's own claim against Treasury was worth only $700.