On 16 December 2016, the Attorney-General, the Hon. Martin Pakula MP, asked the Victorian Law Reform Commission to report on ways to ensure that litigants who use the services of litigation funders or participate in group proceedings (class actions) are not exposed to unfair risks or disproportionate cost burdens.
In accordance with the full title of the terms of reference, Access to Justice—Litigation Funding and Group Proceedings, the overarching theme of this report is access to justice. Litigation funding and class actions help plaintiffs overcome two impediments to accessing justice: the cost of bringing proceedings; and the risk that, if the litigation is unsuccessful, the plaintiff will be required to pay the other side’s costs (adverse costs).
The potential for litigants to be exposed to unfair risks and disproportionate cost burdens arises from the conditions under which litigation funding is provided, the manner in which class actions operate, and how these two factors affect each other.