Entrepreneurial class actions: a cautionary tale

Key Points:

The recent first instance decision of the Victorian Supreme Court in Melbourne City Investments (MCI) v Leighton Holdings and MCI v Treasury Wine Estates serves as an apocryphal warning that some models are not serving the interests of either justice nor the claimants whom they are supposed to benefit.

In April this year the Productivity Commission published a range of draft recommendations concerning access to justice, including the funding of Australian civil litigation by third parties and by lawyers.

Amongst the Commission's recommendations were proposals to lift the present ban on contingency fees, and to hold third part litigation funders to modified financial services licences and associated prudential regulation.