Proposed reforms to litigation funding

On 30 September 2021, the Australian Government released draft legislation aimed at promoting a fair and reasonable distribution of proceeds in class actions involving litigation funders. The draft legislation builds on recommendations made in the Report of the Parliamentary Joint Committee on Corporations and Financial Services' inquiry into litigation funding and the regulation of the class action industry (PJCCFS Report). If ultimately passed, the legislation will have the effect of:

• legislating a rebuttable presumption against Court approval for any claims distribution method that would result in general members receiving less than 70% of the gross proceeds from any funded class action;