"Litigation funders are providers of financial products and they need to be licensed like other providers. The level of returns that some funders are currently earning are egregious and some of their practices are unacceptable. Many funders are overseas firms and they are taking a vast amount of money away from Australian businesses and from plaintiffs in class actions.
"The need for litigation funders to hold an AFSL will provide more protection against misleading claims and opaque cost arrangements in class actions.
"As important as this regulatory change is, broader reforms to class action laws are needed, including imposing a reasonable cap on returns to plaintiff lawyers and litigation funders. Broader reforms are being considered in a current Parliamentary inquiry into litigation funding and class actions. Ai Group will be making a detailed submission to the inquiry over the next few weeks," said Mr Willox.
Media enquiries: Tony Melville – 0419 190 347