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High Court to rule on class actions challenge

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A High Court decision expected this year on class actions funding could make it more difficult for cases to be brought if the ruling overturns use of existing arrangements.

The court is due to rule on the validity of “common fund orders” which require all beneficiaries of a case to pay the litigation funder out of their proceeds. The orders allow actions to be started more easily without a lengthy “book-build” process where participants are individually signed up.

The High Court case, Westpac Banking Corporation & Anor v. Lenthall & Ors, appeals orders by lower courts allowing common funding.

Shine Lawyers Special Counsel Joshua Aylward says the book-build process for the Westpac case would have involved contacting more than 80,000 group members.

“Common fund orders dramatically reduce the cost of class actions and improve access to justice,” Mr Aylward said.

The first common fund order was made by the Full Federal Court in late 2016 and access to justice has since dramatically improved, he says.

Increased litigation funding of class actions has been blamed by insurers for a surge in premiums for related directors’ and officers’ cover.

Mr Aylward is taking part in the Australian Insurance Law Association’s national conference in Hobart, which takes place on October 31-November 1.

Details of the High Court case can be found  here.