The other side of Australian Class Actions: Workers at the mercy of litigation funders

One of the most important benefits of a well-run class action system is that plaintiffs, usually ordinary people who cannot afford big-ticket litigation, will not bear the costs of the legal action against a big company needed to right a wrong. 

That’s the theory.

In practice, class action litigation is now full of lawyers and litigation funders - our newest corporate cowboys - chasing staggering riches with little regard for plaintiffs.

That’s why law firms are beefing up their class action capabilities. 

It’s also why Australia has become a honey pot for big institutional overseas investors piling money into our litigation funding companies. 

In fact, you’d be hard-pressed to find a more profitable asset class in the country.

Some class actions reveal just how perverted the system has become for everyone, except lawyers and litigation funders.

In the Federal Court last October, Justice Michael Lee ridiculed a settlement in a class action involving a group of retail workers who claimed to be employees of Appco Group Australia Pty Ltd. Lee described the proposed settlement as “derisory”.

Full story: The Australian