Woodsford’s Public Submission to the Australian Treasury and Attorney General relating to the Joint Consultation Paper regarding minimum returns in class actions.
On Friday 25th June 2021, Woodsford delivered a considered public submission to the Australian Treasury and Attorney General in respect of the Joint Consultation Paper entitled ‘Guaranteeing a minimum return of class action proceeds to class members’.
“As a general point, we respectfully submit that the premise of the Consultation Paper and the questions posed therein, are flawed.
The Consultation Paper seeks to identify “the best way to guarantee a statutory minimum return of gross proceeds of a class action to class members”. This assumes that imposing a statutory minimum is the best way to ensure class members receive certain amounts of gross proceeds in class actions. For the reasons that follow, imposing a statutory minimum will not necessarily have the effect of ensuring class members receive larger amounts from gross proceeds in class actions than they otherwise would, but it will have the effect of ensuring class members with smaller, meritorious claims receive no compensation, in circumstances where they would have received compensation, absent the statutory minimum. That is because imposing a statutory minimum will have the consequence that only larger class actions will be considered economically viable by those that fund them, including Woodsford. If class actions that claim a lower, but still substantial, amount (say, A$75 million or less) are not funded by third party funders, as they are considered to be economically unviable because of the statutory minimum, those class actions will not be pursued at all. This will leave class members who have smaller claims without any recourse notwithstanding that they may have been the victims of serious wrongdoing. By the same token, the wrongdoers that would otherwise be the defendants to those class actions will not be held to account. This will seriously fetter access to justice in Australia and harm, rather than help, Australian class members who seek to benefit from class actions. Imposing a statutory minimum to group members would, in our submission, achieve exactly the opposite of what we understand to be the intended aim: instead of increasing returns to group members, it would likely mean they often get nothing instead.”
You can read Woodsford’s full submission here.