An Evidence-Based Approach to Class Action Reform in Australia: Common Fund Orders, Funding Fees and Reimbursement Payments

The public release of the ALRC’s final report on class actions and litigation in late January 2019 was accompanied by the announcement by the Federal Attorney-General that, over the next two months or so, he will seek the views of stakeholders with respect to the 24 recommendations contained in this report. It is, of course, important that these consultations and assessments of the ALRC’s recommendations be based on an accurate understanding of the actual, as opposed to perceived, operation of Australia’s class action regimes. One of the two aims of this third report - in the An Evidence-Based Approach to Class Action Reform in Australia series - is to secure this desirable scenario with respect to two of the most controversial aspects of Australian class actions: (a) the percentages of class action settlements that are paid to commercial litigation funders with respect to their commissions or funding fees; and (b) the impact that the ground-breaking common fund doctrine enunciated by the Full Federal Court in October 2016 has had on the remuneration received by funders in successful class actions. The other purpose of this report is to provide data with respect to what are rapidly becoming common features of class action settlement agreements: what are generally-referred to as reimbursement payments to lead plaintiffs and occasionally to sub-group representatives and active/sample class members.