Class actions and litigation funding: Government response shows no urgency for reform

5 December 2022

A new Class Actions Act remains some way off following the Government’s response to the Law Commission’s report on class actions and litigation funding.

The Government has accepted the proposed reforms “in principle” but notes that further policy work will take some time and resourcing of that work “will need to be balanced against other Government priorities”. It appears from this that the Government does not see this work stream as a priority.

Following the Law Commission’s final report in June this year (see our update here), the Government has now issued its formal response. The Government has accepted the Law Commission’s recommendations in principle that:

  • A statutory regime for class actions, underpinned by a Class Actions Act, will provide clarity and could enhance access to justice.
  • Abolishing the torts of maintenance and champerty would clarify the permissibility of litigation funding.
  • Court oversight of litigation funding agreements in class actions should aid in ensuring the terms of agreements are fair and reasonable.

However, the Government says that further policy consideration is required on a number of issues including:

  • The Law Commission’s proposal for a taxpayer-funded public class action fund for certain public interest class action litigation.
  • The potential oversight of litigation funding outside the realm of class actions.
  • Whether to concurrently develop a class actions regime in the employment jurisdiction.
  • The impact of class actions and the regulation of litigation funding on already strained Court resources.

The Government has noted that policy work will begin in 2023 but it appears to be in no hurry to advance the reforms this side of the 2023 General Election with resourcing needing to be balanced against other Government priorities.

Bell Gully will be closely monitoring the next steps and will provide further updates as key developments arise.

If you have any questions about the class actions reforms, or about class actions more generally, please get in touch with the contacts listed, or your usual Bell Gully adviser.

Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.