Litigation funding regulation: grandfathered schemes and the MIS regime

This week's TGIF considers the recent decision of the Federal Court in Stanwell Corporation Limited v LCM Funding Pty Ltd [2021] FCA 1430, which provides guidance on when litigation funding will be 'grandfathered' for the purposes of the regulation of the 'managed investment schemes' regime and also reconsiders the longstanding authority that has underpinned that regime.

Key Takeaways

• Litigation funding schemes will be 'grandfathered' if they were entered into prior to 22 August 2020 even if the scheme was only early in an investigative phase by that date.
• Even if members are not party to an initial 'work program' for investigating the claims and conducting a book build before commencing the action, this work program can still be part of the scheme by sharing the same dominant purpose – this being to enable members to seek remedies.