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Law Council of Australia


Guaranteeing a minimum return of class action proceeds to class members

The submission to the Treasury and the Attorney-General’s Department in response to the Consultation Paper entitled ‘Guaranteeing a minimum return of class action proceeds to class members’ (Consultation Paper) was prepared by the Law Council of Australia. 

The Law Council notes that the Consultation Paper has been drafted following a recommendation of the Parliamentary Joint Committee on Corporations and Financial Services (PJC) in its report ‘Litigation funding and the regulation of the class action industry’ (Report). The PJC recommended that the Australian Government consult further in relation to a late-raised proposal that there be a statutory minimum return of the gross proceeds of a class action to class members (the proposed reform) to clarify issues. 1

Given the circumstances in which the proposed reform was developed, the Law Council considers that the Australian Government should conduct a thorough investigation into the fundamental issues underlying the proposed reform before considering its implementation. Consideration is required as to the risks and practical difficulties of implementing the proposed reform, particularly in comparison to alternative options.

The Law Council strongly supports the objectives of enhancing protections for class action members and improving access to justice. However, the Law Council opposes the introduction of a guaranteed statutory minimum return to members of a class, in summary, because it is an inferior means of securing the first objective and would positively undermine the second.

The Law Council remains of the view that the approval of all aspects of class action settlements and the distribution of settlement funds under section 33V of the Federal Court of Australia Act 1976 (Cth) should be for the Court to determine in the best interests of all group members. The Court’s discretion should not be limited by a statutory cap. The Law Council therefore recommends that recommendation 11 of the PJC that additional oversight powers be provided to the Federal Court of Australia (Federal Court) be implemented by the Australian Government as a matter of priority and in preference to the proposed reform.

You can read the full submission below. 

1 Parliamentary Joint Committee on Corporations and Financial Services, Litigation funding and the regulation of the class action industry (December 2020) xxviii, 204-6, (recommendation 20).


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