SHADOW MINISTER FOR CONSTITUTIONAL REFORM
MEMBER FOR ISAACS
STEPHEN JONES MP
SHADOW ASSISTANT TREASURER
SHADOW MINISTER FOR FINANCIAL SERVICES
MEMBER FOR WHITLAM
FRYDENBERG EXPOSES PORTER’S CLASS ACTIONS INQUIRY AS A SHAM
The Morrison Government’s announcement of new regulations for litigation funders has exposed the inquiry it announced into the sector just last week as a sham.
The idea of regulating these credit providers as financial services may have merit but we we want to see the detail of the regulations proposed.
It appears the Government has cherry picked an idea that was rejected by an earlier report and it is unclear why the Government has not chosen to implement the recommendations of the Australian Law Reform Commission’s 2017 inquiry, given that the ALRC found that “[AFSL licensing] would be unlikely to improve regulatory compliance in the third-party litigation funding industry”.
Are the Treasurer and Attorney-General even talking to each other?
The fact that the Treasurer has made this announcement before Mr Porter’s new inquiry into class actions and litigation funding has held a single hearing has exposed it as a sham whose true purpose is to attack class actions with a view to denying Australians access to justice.
Litigation funding and class actions provide a vital path to justice for Australians trying to uphold their rights against wealthy defendants with vastly greater resources.
For example, just last November the Federal Court ruled in favour of the three lead applicants in a class action of more than 1,350 women who sued Johnson & Johnson and two subsidiaries, for negligence in relation to pelvic mesh implants.
And it’s no coincidence that inquiry was first proposed in March just days after 10,000 victims of the Morrison Government’s cruel Robodebt scheme signed-up to a class action to defend their legal rights.
Contrary to Government claims, recent research by commercial law firm Allens found the total number of class action filings was actually down 20 per cent in 2019.
Shareholder actions were actually down 63 per cent and so far this year there are just three new shareholder cases – none of which relate to COVID-19 matters.
Significantly, the biggest cause of new cases in 2019 came from consumer actions arising from the banking royal commission that the government voted 26 times to prevent.
Labor will always support sensible law reform. But when the Morrison Government proposes changes to the law in relation to litigation funding and class actions, Australians are entitled to be sceptical.