Keeping A Check On Class Actions
A massive jump in the number of Class Action lawsuits filed in the Victorian Supreme Court in the past four months has prompted an urgent request for the Victorian Government to produce an annual report on the outcomes.
The 157 per cent increase follows changes by the Andrews Labor Government allowing law firms to charge contingency fees in class action lawsuits.
The Justice Legislation Miscellaneous Amendments Bill 2019 passed in June and overturned 200 years of Australian legal precedent.
It ultimately allows law firms to take more of the compensation pay-out than their victims.
The Liberal Member for Western Victoria, Bev McArthur, raised the flood of cases in the Victorian Parliament last night.
“Unfortunately, class actions are no longer a vehicle of justice but instead a vehicle for profits, hijacked by predatory practices of law firms and offshore litigation funders,” Mrs McArthur said.
“Would it surprise anyone that these beneficiaries are also major donors to the Labor Party?”
The surge in class actions comes despite Victorian businesses suffering months of lockdown, raising questions about the motivating intent of the litigation, which cannot reflect actual increased wrongdoing by corporations.
“Is this the result of big law firms capitalising on enormously profitable fee arrangements driven by this Government’s changes that allow them to charge massive commissions?”
“While Australian businesses are trying to survive a recession, exacerbated by unparalleled public policy failures in this state, the Government has opened the floodgates to lawsuits that further debilitate them,” she said.
While acknowledging that class actions have a noble aim, Mrs McArthur highlighted the deplorable behaviour towards class action participants.
“In the Black Saturday bushfire class action, Maurice Blackburn charged administrative costs of $1 million every month to victims and withheld settlement for over two years.
“It is a disgrace that this Government is more concerned about the profits of their lawyer friends rather than the members of the class.”
Mrs McArthur has called on the Attorney General, Jill Hennessey, to urgently produce an annual report on the percentage of damages that goes to victims compared to their lawyers in Victoria.
“This is the least we should expect: a systematic evaluation of the policy her Government has introduced.
“Before people sign up to class actions in Victoria, and the angst involved, they deserve to know that they may become victims twice over – firstly in the original complaint – and then by the hand of the people supposedly looking after them.
“This Annual Report needs to show the number of cases launched, the success rate of these and the percentage of settlements awarded as fees.
“I, for one, will be very interested to see those numbers.”
26 November 2020