Litigation Funding, Class Actions And Managed Investment Schemes

On 20 October 2009 the Full Court of the Federal Court of Australia delivered a decision which may have a significant impact on class action litigation in Australia.  The court accepted that a litigation funding arrangement was required to be registered under, and to comply with the managed investments scheme provisions of, the Corporations Act.

What Is A Managed Investment Scheme?

A managed investments scheme (MIS) is a scheme that has the following characteristics:

• people contribute money or moneys worth as consideration to acquire an interest in the scheme;
• the contributions are pooled or used in a common enterprise to produce financial benefits; and
• the members do not have day to day control over the operation of the scheme.