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ARTICLE · 14 SEPTEMBER 2015

Federal Court Of Australia Rejects "Common Fund" For Litigation Funders

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The Federal Court has declined to make orders at the commencement of proceedings which would have endorsed a funder's fee arrangement as reasonable and required all group members to pay that fee.

AustraliaLitigation, Mediation & Arbitration
  • The Federal Court has declined to make orders at the commencement of proceedings which would have endorsed a funder's fee arrangement (reimbursement of legal fees paid to the lawyers and payment of between 22.5 percent and 35 percent of any recovery) as reasonable and required all group members to pay that fee.
  • The making of the orders would have removed the need for a litigation funder to contract with a group member to be paid and therefore allow for an open class action that included all group members rather than a closed class that was limited to group members who had entered into funding agreements. The Court found that the orders, while advantageous to the litigation funder, were not "appropriate or necessary to ensure that justice is done in the proceeding".

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