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Supreme Court Civil Procedure Amendment Bill 2018

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Thursday, 29 November 2018

Tags: Supreme Court, Legislation

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 this matter.

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.