Litigation funding

On 28 October 2011, the High Court granted special leave to appeal in the matter ofInternational Litigation Partners Pte Limited v Chameleon Mining NL (Receivers and Managers Appointed) & Ors. In doing so, the High Court will be directly examining the role of litigation funders in the Australian justice system for the third time in recent years.

The issue in this case is whether a litigation funding agreement constitutes a ‘financial product’ within the meaning of Chapter 7 of the Corporations Act 2001 (Cth), such that the funder is required to hold an Australian financial services licence (AFSL) unless exempted.

At the same time as the Chameleon Mining case has been progressing through the courts, regulatory reform in relation to litigation funding has been underway. On 27 July 2011, the Federal Government released an exposure draft of regulations which provide for litigation funding arrangements and those providing them to be exempted from various provisions of the Corporations Act, including Chapter 7, subject to having adequate arrangements for managing conflicts of interest.

Significant cases, legislation or articles referred to

Download PDF of Article