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Supreme Court Civil Procedure Amendment Bill 2018 - Second Reading
Dr WOODRUFF (Franklin) - Mr Deputy Speaker, the Greens support the Supreme
Court Civil Procedure Amendment Bill 2018.
I understand that all the amendments contained within it were prepared at
the request of the Chief Justice and that, amongst other things, it
removes references to a long since defunct Colonial Courts of Admiralty
Act 1890, that it will allow the Supreme Court when requiring payment of
an amount of money that it may carry interest in relation to that amount.
I understand this would apply in a very limited number of circumstances
and that change was also recommended by the Chief Justice.
The expanded administrative powers of the Associate Judge contained within
the amendment bill will allow Supreme Court judges more time to consider
substantial matters, which is clearly a relevant and useful use of their
expertise. It also inserts provisions for class actions or representative
proceedings which were not available when there were class actions of
seven or more persons.
I want to make some comments about the provisions for class actions and
ask a question of the Attorney-General, who may have more information
about this than I have been able to find out. It relates to the access to
funding for litigation, which has become a critical component of class
action cases in Australia because it provides the financing that is needed
for what can be very expensive and complex litigation.
At the moment, as I understand it - and perhaps the minister can correct
me if this is not true in Tasmania or it is already regulated - it is
still unregulated to the extent that it can expose consumers to the risk
of a funder becoming insolvent or simply failing to pay legal fees, or if
a class action is lost, failing to pay the defendant's costs.
Associate Professor of Law of the University of New South Wales Michael
Legg wrote about this matter in 2017. He notes that two important
regulatory pillars, licensing and capital adequacy [?? 5:12:18], are
missing in regulations in state laws, despite the Productivity Commission
recommending in 2014 that both regulations in relation to licensing and
capital adequacy are introduced. The lack of a licensing regime, he says,
means that anyone or any entity can fund litigation in Australia except
for lawyers, as contingency fees are illegal. Without capital adequacy
requirements there is no protection for claimants or defendants to ensure
the funder has sufficient resources to be able to pay legal fees and meet
any adverse costs order. He says this creates the potential for
inadequately resourced funders to litigate for profit but avoid the costs
if they are unsuccessful. Currently funders can protect themselves by
being based offshore and/or by using subsidiaries with limited financial
resources to undertake funding obligations.
There is only partial protection against a funder with inadequate capital
at the moment. This involves a court order for security for costs and
this requires the funder to take steps to make funds or assets available
at the beginning of litigation to pay the defendant's costs in the event
the litigation fails. He says, however, that it is common practice that
the amount of security a court requires to be posted is substantially
lower than the costs the defendant actually incurs, so the claimant
bringing the case may still be liable for those costs.
I understand that the Federal Court has taken significant steps to
reassert that court access is primarily for the people who have been
harmed. That court says that it has the power to supervise litigation
funding charges in class actions. In your view, minister, would it be
useful for the Tasmanian Law Reform Institute to undertake an assessment
of this issue in Tasmania? In Victoria the Attorney-General referred a
matter such as this to the Victorian Law Reform Commission and that body
produced a risks and cost burdens in class actions paper that provided
guidance to the Victorian Government on this matter.
It is really a question of whether we need to create regulations in
Tasmania to cover this. Perhaps they already exist in insufficient form,
but if we need to we should create regulations so that courts and
regulators need to pay attention to unsuccessful class actions where the
funder is required to honour obligations to claimants to pay legal fees
and the defendant's costs, but where that does not occur some tracking,
monitoring or auditing of what has happened before is possibly useful in
Other than that issue, I do not have any other comments to make about this
bill and we are happy to support the content within it.