The Albanese Government has today released draft regulations which unwind the previous government’s unfair treatment of class action plaintiffs.
The decision to reverse the earlier regulations follows a June 2022 decision by the Full Federal Court which held that the notion that funded class actions are managed investment schemes is “plainly wrong”.
The proposed new regulations are instead drafted to facilitate access to justice rather than the previous Treasurer’s cynical efforts to hamper Australians’ access to funding for class actions which he ushered through under the cover of COVID‑19.
The draft regulations would reinstate the longstanding exemptions from the Australian Financial Services Licence (AFSL), managed investment scheme (MIS) and other corporate regulatory regimes for litigation funders that existed prior to the August 2020 changes.
The Albanese Government is also considering recommendations by the Australian Law Reform Commission to clarify and strengthen the powers of the Federal Court to ensure fair and reasonable returns to class action members.
The exposure draft regulations and explanatory statement are available on the Treasury website. Submissions open today and conclude on 30 September 2022.