class actions settlements

In a presentation Productivity Commission , the Australian Institute of company directors , says that increasingly , major lawsuits against companies are funded by professional litigation funders subject to " little or no regulation" .

The group says that many class actions settlements are driven by lawyers and litigation funders , leaving companies face significant costs and potential disruption .

They claimed defending successful companies and management costs enough to pay have assets collective action settlement and litigation funders yoke of capital adequacy regulations funded company building the law firm to prevent the measures called for are.

The requests come as the federal Attorney -General George Brandis has criticized the involvement of firms in companies that finance class action settlements, saying it was concerned about the " wildcat and opportunistic " collective action settlements.

AICD says " excessive costs " and distraction company claims "unfounded " should not be underestimated and economic considerations " that allows donors to initiate litigation forcing settlement of litigation to profit should not be ignored " .

Commercial reality these irritating Board of managers and employees to focus on core business activities, as you may feel it is prudent to establish this type of case, The presentation says.

The cost and time involved in defending these actions is vast and there are still many unresolved areas of Australian law class action settlements, particularly in relation to actions initiated by shareholders, which adds to the uncertainty for companies.

" The beginning of a large -scale shareholder class action settlements may put pressure on the share price target entity . "

Because of the size and scale class action litigation , company executives say , cases may hit tax revenues by hitting company profits .

Arguments corporate executives "are shared by an advocacy group linked to the U.S. Chamber of Commerce , the largest business federation in the world.

U.S. Chamber Institute for Legal Reform Productivity Commission said that Australia has the potential to be "jurisdiction of choice for plaintiffs , lawyers and financiers that promote collective action. This uncontrolled acceleration issue has implications for the civil justice system Australia , the cost of do business and reputation worldwide as an investment destination . "

In a paper that you put in front of the PC , the institute warns that an increase in settlements funded class actions and processes increased the cost of doing business in Australia and it is " a trend that will continue if current situation remains unchanged . "

While large class action law firm, Maurice Blackburn and like Slater and Gordon have yet to comment on the investigation of 15 months , the Productivity Commission on Access to Justice , which they previously rejected concerns about the risk litigation facing growing Australian companies .

Class action law firms argued that class action litigation funders supported by results from recovery for victims of mistakes and that there was a wave of litigation or unmeritorious claims because there is a loser pays rule for costs in civil cases.

Law firm King & Wood Mallesons recently estimated that securities class action settlements in 2012 totaled $ 480 million , after the settlement record of $ 200 million in Centro class actions settlements.

This is almost half of all such settlements in the past 20 years , the Federal Court regime collective action began .

Productivity Commission raised the prospect of changing light -touch regulation Labour litigation funders .