"The Australian Industry Group welcomes the resolution passed by the House of Representatives this afternoon to establish a Parliamentary Inquiry into Australia's class action regime," Innes Willox, Chief Executive of the national employer association Ai Group said today.
"The inquiry needs to investigate the outrageous levels of returns that litigation funders (many of which are overseas firms) are receiving from class actions in Australia, to the detriment of plaintiffs, businesses and the broader community. Litigation funders offer financial products to investors yet they are not subject to the regulations that apply to other providers of financial products. This is wrong and it needs to be addressed.
"The inquiry also needs to consider the important reasons why contingency fees have been prohibited in Australia for the past 200 years and why they need to stay prohibited. An ill-conceived Bill before the Victorian Parliament would make Victoria the only State to permit lawyers to charge contingency fees in class actions. Contingency fees are fees charged as a percentage of the amount recovered if the claim is successful. At present, lawyers can only charge a fair fee for the work they actually do.
"Ai Group looks forward to contributing to this important inquiry which will hopefully lead to much needed and long overdue changes to class action laws," Mr Willox said.
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