Zurich’s Asia Pacific region’s Mark Gates, Chief Claims Officer for Financial Lines says there is a clear trend upward in the filing of securities class actions in Australia between 2003 and 2009. Zurich expects this would continue. Gates has also highlighted a number of emerging trends of class actions in Australia:
Funding of class actions
There are restrictions in Australia in relation to contingency fees, where a lawyer seeks to impose a percentage of the clients’ recovery as their fee. For this reason, litigation funders have become a popular means to provide funding for class actions.
Litigation funders will provide the funding to meet the expense of lawyers running the class action and will also provide an indemnity for an adverse cost order should one be made against the lead plaintiff.
The funding agreement will usually allow the funder to take anywhere from 25 – 50 per cent of the monies that are recovered by the Class.
Until 2004 there were no funded securities class actions, thereafter, most securities class actions have received funding.
Closed class actions
Recent case law has permitted the formation of a closed class prior to commencement of representative proceedings. This effectively allows proceedings to be brought by a select group of class members to the exclusion of other class members.
One unfortunate outcome of this recent decision for directors and their insurers is that a court may permit multiple class actions to proceed against an insured. This would multiply the cost of litigation. Issues such as these are presently being considered by Australian courts.
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