Financing Of Australian Class Actions—Solicitors Common Fund Order Disallowed

In Short

The Situation: Australia's highest court has ruled on the question of whether lawyers in New South Wales ("NSW") can charge contingency fees in class action litigation in the Federal Court of Australia (otherwise known as a solicitors' common fund order, or "SCFO"). The Federal Court, in answer to a question reserved to the Full Court, had ruled that lawyers could charge a SCFO.

The Result: In a 7–0 decision, the High Court of Australia in Kain v R&B Investments Pty Ltd [2025] HCA 28 held it was not permissible for NSW lawyers to charge a SCFO in Federal Court class action proceedings.

Looking Ahead: The financing of class actions is a major policy issue in Australia. The High Court has limited the fee options available to plaintiffs' lawyers in the Federal Court, while giving litigation funders greater clarity. The debate about how lawyers can charge is likely to continue, but as a legislative issue rather than a judicial one.