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Court ruling keeps class action focus on Victoria

A High Court ruling will strengthen Victoria’s status as a favoured jurisdiction for bringing class actions, lawyers say.

The court considered whether solicitors, in addition to litigation funders, could receive a percentage of money gained in class action settlements or judgments.

Currently, Victoria is the only state that allows solicitors to benefit from arrangements known as common fund orders, with other states banning the practice due to contingency fee prohibitions.

The High Court judgment last week overturned a full Federal Court ruling that could have opened the door for solicitors in other states to receive the payments.  

“The result is likely to be that, absent any further legislative reform, solicitor-funded cases continue to gravitate towards the Supreme Court of Victoria,” law firm Ashurst says.

The High Court also determined that the Federal Court can make common fund orders at the time of settlement or judgment, rather than earlier in the process.

King & Wood Mallesons says legislation will be required if class action contingency fees are to be introduced in other states or territories, and the decision maintains the status quo of the litigation funding landscape.

The decision is available here