INTEGRITY, FAIRNESS AND EFFICIENCY — AN INQUIRY INTO CLASS ACTION PROCEEDINGS AND THIRD-PARTY LITIGATION FUNDERS
11 December 2017
21 December 2018
21 December 2018
TABLED IN PARLIAMENT:
24 January 2019
The Final Report for the ALRC’s review of class actions and third party litigation funders, Integrity, Fairness andEfficiency—An Inquiry into Class Action Proceedings and Third-Party Litigation Funders (Report No 134), was delivered to the Attorney-General on 21 December 2018, and tabled in Parliament in January 2019. The Report made 24 recommendations for reform.
In December 2017, the Attorney-General asked the ALRC to conduct an inquiry into class actions and third party litigation funders. The Terms of Reference required the ALRC to consider ‘whether and to what extent class action proceedings and third party litigation funders should be subject to Commonwealth regulation’. In particular, the ALRC was directed to consider whether there is adequate regulation of: conflicts of interest between third-party funders, lawyers and class members; prudential requirements and character requirements of funders; and the proportion of settlement available to be retained by lawyers and litigation funders in class action proceedings.
In the early part of the Inquiry, 40 consultations were held with key stakeholders in the sector, including: a number of government agencies, academics, judges, members of the legal profession, third-party litigation funders, insurers, company directors, and shareholder representatives. Following the release of a Discussion Paper on 31 May 2018, the ALRC received 107 submissions and conducted a second round of over 60 consultations. Of the latter, 25 of the consultations and 103 of the submissions occurred in the 2018/19 reporting period. Further consultations and workshops were held thereafter to ensure that interested parties had the opportunity to expand on and clarify matters that had been raised in their submission, and to comment on any new matters that had not been previously canvassed in the Discussion Paper.
In August and September 2018, the ALRC held seminars in Brisbane, Melbourne and Sydney, where the ALRC presented the various responses to the proposals of the Discussion Paper on Class Action Proceedings and Third-party Litigation Funders.
The ALRC report was guided by three overarching principles:
Principle 1: It is essential to the rule of law that citizens should be able to vindicate just claims through a process characterised by fairness and efficiency to all parties, that gives primacy to the interests of the litigants, without undue expense or delay.
Principle 2: There should be appropriate protections in place for litigants who wish to avail themselves of the class action system and the variety of funding models that facilitate the vindication of just claims.
Principle 3: The integrity of the civil justice system is essential to the operation of the rule of law.
The ALRC found that the federal class action regime has undoubtedly enabled more claims to be brought, especially by people with small claims that collectively amount to a significant total value. The costs of such actions, however, remain very high. The cost and delay of proceedings are also necessarily increased where multiple class actions are commenced with respect to the same or related matters. Litigation funding is therefore an important element in facilitating access to the legal system, though data presented in the report showed that it has predominantly facilitated access to the courts in a narrow range of claims, namely securities and investor class actions.
In addition to recognising the critical role played by third-party litigation funders in facilitating access to justice, the report identified certain risks associated with such funding arrangements, particularly the conflicts that are inherent in any funding agreement. The ALRC identified broad concerns about the depth of understanding within the legal profession as to the complexity of the conflicts of interest that may arise in the context of third-party funded class actions, and need for assurance of the integrity of the system through which class claims are pursued.
On 21 December 2018, the ALRC delivered the final report to the Attorney-General: Integrity,Fairness and Efficiency—An Inquiry into Class Action Proceedings and Third-Party Litigation Funders (Report No 134). The report contained 24 recommendations that aim to promote fairness and efficiency in class action proceedings, protect litigants from disproportionate costs, and ensure the integrity of the civil justice system. Recommendations include to:
establish mechanisms in statute and legal frameworks for the Federal Court to deal effectively with competing class actions;
provide mechanisms by which the Federal Court can appoint an independent costs referee to establish the reasonableness of legal costs in class action matters, and by which the Court can tender for settlement administration services;
increase transparency and open justice for class action settlements;
decrease the risk of litigation funders failing to meet their obligations or exercising improper influence through a statutory presumption in favour of securities for cost, and greater Court oversight of funding agreements, which must indemnify the lead plaintiff against an adverse costs order;
enhance access to justice and decrease costs to litigants through the introduction of a limited percentage-based fee model for solicitors; and
introduce a voluntary accreditation scheme for solicitors acting in class action proceedings.
The ALRC further recommended a Government review of statutory enforcement regimes for regulators so as to facilitate effective and consistent statutory redress schemes in order to fill gaps and create an alternative to some class action proceedings. Additionally, the ALRC recommended a Government review of the legal and economic impact of the operation, enforcement, and effect of federal statutory continuous disclosure obligations and those relating to misleading and deceptive conduct. This recommendation recognises the need for further investigation of the interaction between the substantive law that supports shareholder class actions and the class action regime.
FAMILY LAW FOR THE FUTURE — AN INQUIRY INTO THE FAMILY LAW SYSTEM
27 September 2017
31 March 2019
31 March 2019
TABLED IN PARLIAMENT:
10 April 2019
PUBLIC SUBMISSIONS RECEIVED:
CONFIDENTIAL CONTRIBUTIONS RECEIVED:
The Final Report for the ALRC’s review of the family law system, Family Law for the Future—An Inquiry into the FamilyLaw System (Report No 135), was delivered to the Attorney-General in March 2019, and tabled in Parliament in April 2019. The Report made 60 recommendations for reform.
In September 2017, the Attorney-General asked the ALRC to conduct a comprehensive review of the modern family law system. This was the first review of Commonwealth family law since it was enacted more than forty years ago. The Terms of Reference directed the ALRC to consider the need and desirability of possible reforms to a broad range of issues within the family law system, including the appropriate, early, and cost effective resolution of all family law disputes, and the protection of the best interests of children and their safety.
The ALRC conducted 179 consultations across Australia, including in each capital city and across regional and rural locations, such as Albury/Wodonga, Alice Springs, Cairns, the Gold Coast, Mt Gambier, Newcastle, Townsville, and Wollongong. In addition, with the assistance of state Children’s Commissions and the Young People’s Family Law Advisory Group in South Australia, the ALRC heard from several groups of children and young people about their views on the issues in the Inquiry.
The ALRC published an Issues Paper (IP 48) in March 2018, followed by a Discussion Paper (DP 86) in October 2018. Submissions were invited in response to the questions and proposals put forward in each of these papers.
In addition to the request for submissions, the ALRC invited people with recent experience of the family law system to confidentially tell the ALRC about their experience via a specially created Tell Us Your Story portal on the Inquiry website.
The ALRC received over 1500 written contributions to the Inquiry, including over 440 public submissions in response to the Issues Paper and Discussion Paper, 331 confidential submissions, and 732 substantive contributions to the Tell Us Your Story portal.
The ALRC found that the family law system does not adequately assist Australian families to resolve disputes following the breakdown of relationships. Children are not consistently protected from harm; nor are people experiencing family violence. Disputes are protracted by delays resulting from resources constraints in the courts, and also by the conduct of parties who are unable or unwilling to resolve disputes quickly and amicably. The substantive family law, which has been repeatedly amended, is no longer clear or comprehensible.
Critically, the ALRC found that, under the current system, children fall through the gaps between the family law courts, child protection systems, and the state and territory responses to family violence. In the federal family courts, family violence, child abuse or other complex factors now make up the majority of cases. However, there is no federal body with investigative powers akin to a child protection department and the family courts have no capacity to compel a child protection department to intervene in a family law case or to investigate the court’s concerns.
The first recommendation made in the Final Report is that the resolution of family law disputes be returned to the states and territories and that the federal family courts eventually be abolished. The fundamental structural difficulties of the family law system can be remedied only by enabling family law, family violence and child abuse matters to be dealt with in the same place at the same time. One court considering the best interests of the child in totality.
More broadly, the recommendations in the Report aim to ensure that the law provides a framework that assists families who are experiencing relationship breakdown to make arrangements for their children, property, and financial affairs.
Key themes of the 60 recommendations include:
Closing the jurisdictional gap - Stop children falling through the gaps between the federal family law courts, the state and territory child protection systems and the state and territory responses to family violence. Family law disputes returned to the states and territories and the federal family courts eventually abolished.
Children’s orders - Simplify the factors to be considered when determining living arrangements that promote a child’s best interests. Remove mandatory consideration of particular living arrangements.
Stricter case management - Clearer consequences for couples and their advisors if they don’t seek to resolve disputes as quickly, inexpensively, and efficiently as possible, and with the least acrimony.
Compliance with children’s orders - Improve understanding of orders through greater engagement with family consultants and place limits on interim appeals.
Simpler property division - Include a starting position that separated couples made equal contributions during the relationship.
Encourage amicable dispute resolution - Increase the proportion of family law matters that are dealt with through alternatives such as FDR (Family Dispute Resolution) and LADR (Legally Assisted Dispute Resolution).
Legislative simplification - Redraft the Family Law Act to make it easier to understand the law.
Following the release of the Final Report in April 2019 the ALRC published three supplementary notes online:
Recommendations in Relation to Shared Parental Responsibility (April 2019): an explanatory note that addresses some common public misconceptions surrounding the ALRC’s recommendations on shared parental responsibility.
Closing the Jurisdictional Gap: A ‘Radical’ Recommendation (April 2019): an explanatory note that contextualises the first recommendation in the Final Report — that family law disputes be returned to the states and territories and the federal family courts eventually abolished.
Summary of Tell Us Your Story Responses (June 2019): a note that provides aggregated data regarding the number and nature of individual stories submitted via the Tell Us Your Story portal that included complaints against actors in the family law system and about the system in general. This note is intended to supplement Chapter 3 of the Final Report, which provides a high level summary of the data collected from the Tell Us Your Story project.
REVIEW OF AUSTRALIA’S CORPORATE CRIMINAL RESPONSIBILITY REGIME
10 April 2019
30 April 2020
COMMENTS ON TERMS OF REFERENCE RECEIVED:
On 10 April 2019, the Attorney-General asked the ALRC to inquire into Australia’s corporate criminal responsibility regime and, specifically, the corporate criminal responsibility provisions contained in Part 2.5 of the Commonwealth Criminal Code. The Terms of Reference ask the ALRC to consider ‘whether, and if so what, reforms are necessary or desirable to improve Australia’s corporate criminal liability regime’. In particular, the ALRC has been asked to review:
the policy rationale for Part 2.5 of the Code;
the efficacy of Part 2.5 of the Code as a mechanism for attributing corporate criminal liability;
the availability of other mechanisms for attributing corporate criminal responsibility and their relative effectiveness, including mechanisms which could be used to hold individuals (eg senior corporate office holders) liable for corporate misconduct;
the appropriateness and effectiveness of criminal procedure laws and rules as they apply to corporations; and
options for reforming Part 2.5 of the Code or other relevant legislation to strengthen and simplify the Commonwealth corporate criminal responsibility regime.
The review will provide the first comprehensive review of Australia’s corporate criminal responsibility regime following the enactment of the Commonwealth Criminal Code. It comes at a time of renewed focus on protecting Australian consumers from egregious conduct by corporations and increasing regulation in the area of corporate wrongdoing. It also follows the release of the Final Report of the ASIC Enforcement Taskforce in December 2017, and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in February 2019.
Following the release of the Terms of Reference the ALRC invited interested stakeholders to provide comments on the scope of the Inquiry and any issues relevant to the Terms of Reference. The ALRC received 14 responses to its invitation for comments. The ALRC will use these comments to inform the scope of its review.
From May to June 2019, the ALRC held 23 initial consultations with academics, government agencies, law firms, and industry bodies across Australia.
DISCUSSION PAPER AND FINAL REPORT
Proposals for reform will be outlined in a Discussion Paper that the ALRC plans to release on 15 November 2019. Following the release of the Discussion Paper, the ALRC will invite public submissions until 31 January 2020 and hold further consultations. The Final Report is due to the Attorney-General by 30 April 2020.
REVIEW OF THE FRAMEWORK OF RELIGIOUS EXEMPTIONS IN ANTI-DISCRIMINATION LEGISLATION
10 April 2019
12 December 2020
COMMENTS ON TERMS OF REFERENCE RECEIVED:
On 10 April 2019, the Attorney-General asked the ALRC to inquire into the framework of religious exemptions in Commonwealth, State and Territory anti-discrimination legislation. This Inquiry has been referred to the ALRC as part of the Government’s response to the Review of Religious Freedom conducted by the Expert Panel led by the Hon Phillip Ruddock (the ‘Ruddock Review’).
The Terms of Reference ask the ALRC to consider what reforms to Commonwealth, state and territory law, the Fair Work Act 2009 (Cth) and any other Australian laws should be made in order to:
limit or remove altogether (if practicable) religious exemptions to prohibitions on discrimination, while also guaranteeing the right of religious institutions to conduct their affairs in a way consistent with their religious ethos, and
remove any legal impediments to the expression of a view of marriage as it was defined in the Marriage Act 1961 (Cth) before it was amended by the Marriage Amendment(Definition and Religious Freedoms) Act 2017 (Cth), whether such impediments are imposed by a provision analogous to section 18C of the Racial Discrimination Act1975 (Cth) or otherwise.
Following the release of the Terms of Reference the ALRC invited interested stakeholders to provide comments on the scope of the Inquiry and any issues relevant to the Terms of Reference. The ALRC received 13 responses to its invitation for comments. The ALRC will use these comments to inform the scope of its review.
To help inform individuals and organisations interested in providing comments on the Terms of Reference the ALRC published a brief background paper on the Inquiry webpage on 1 May 2019. The background paper contextualises the ALRC’s Inquiry by summarising the Ruddock Review and the Government’s Response to that review. The ALRC Inquiry will not re-agitate issues already considered in the Ruddock Review, but rather will assess legislative options that align with the specific recommendations that have been referred to the ALRC.
From May to June 2019 the ALRC conducted a preliminary round of consultations with a range of stakeholders, including representatives from academia, religious institutions, schools and human rights organisations. The ALRC will consult more widely following the release of the Discussion Paper for this Inquiry.
DISCUSSION PAPER AND FINAL REPORT
The ALRC is planning to release a Discussion Paper in early 2020. The Discussion Paper will set out proposed reforms and ask questions to assist the ALRC to prepare formal recommendations.
The Final Report, including recommendations for law reform, is due to the Attorney-General by 12 December 2020.
WHERE NEXT FOR LAW REFORM? - PRIORITIES FOR LAW REFORM PROJECT
In 2019 the ALRC initiated a national conversation about the national priorities for law reform over the next three to five years (Priorities for Law Reform). The conversation gives Australians a say in what areas of law should be the focus of a law reform inquiry by the ALRC and forms part of the ALRC’s longstanding commitment to broad public participation in law reform.
Priorities for Law Reform will culminate in a proposed three to five year programme of law reform projects that the ALRC will submit to the Commonwealth Attorney-General for consideration in 2019. While it is the responsibility of the Attorney-General to determine which matters are to be examined by the ALRC, the ALRC may make suggestions. By hosting this national conversation the ALRC is asking the public what suggestions it should make to the Attorney-General.
The ALRC prepared brief background papers on potential areas for reform to ‘kick start’ the conversation. One of these papers introduced the Constitution as a potential reform priority. The Australian Constitution has consistently been the subject of prolific public debate. Constitutional issues underpin a broad range of public concerns, from the opaque process of judicial appointments, to the complicated dual citizenship prohibition under s 44 that has plagued federal parliament in recent years. Since its establishment in 1975, the ALRC has produced 91 reports on various areas of Australian Commonwealth law. Of these, we identified 56 reports (61%) in which the Constitution presented one or more obstacles to the effective operation of the law in Australia. Broadly, these obstacles fall into two categories: those where the legal arrangements in need of reform were dictated or underpinned by constitutional requirements; and those where the Constitution itself limited the availability or scope of possible reforms. Despite the prevalence of constitutional issues in previous ALRC inquiries, constitutional reform has only once been recommended by the ALRC. When constitutional issues have arisen, they have typically been beyond the scope of the inquiry. Even when the ALRC has attempted to grapple with the constitutional issues that arise, it is often impeded by uncertainty as to the scope of constitutional provisions, which undermines efforts to recommend appropriate and effective reforms.
Public participation in the project has been facilitated by an online survey and a series of public seminars on the future of law reform.
Through an online survey, which closed on 30 June 2019, individuals and organisations were invited to provide comments on seven suggested topics for reform and make their own suggestions about areas of law they believe are in need of reform.
The seven suggested topics for reform in the survey were:
The Australian Constitution;
Banking, superannuation and financial services;
Commonwealth anti-corruption measures
There were 395 responses to the survey.
In May and June 2019, the ALRC held four seminars on the future of law reform in conjunction with the Law Schools at University of New South Wales (UNSW), Australian National University (ANU) and the University of Melbourne:
The Constitution and Public Law (UNSW, 29 May 2019)
Technology and the Law (ANU, 12 June 2019)
The Constitution and Immigration Law (University of Melbourne, 18 June 2019)
Environment, Energy and Resources Law (Brisbane Federal Court, 20 June 2019)
Each seminar had a broad focus on a different area of law, with discussion led by a panel with expertise in the relevant area.
At the conclusion of each seminar, participants were invited to vote for their top three priority topics for a law reform inquiry via an online platform. The ALRC has published summaries of each seminar online, including results from the online voting platform and key themes from the panel discussions.
Development of Programme of Law Reform Projects
The public contributions via the online survey and public seminars will assist the ALRC in developing preliminary law reform project proposals.
The ALRC will seek feedback on its project proposals through further public seminars and consultations before presenting a final programme of law reform projects to the Attorney-General later in 2019.