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Litigation funding for class actions promotes access to justice, but contingency fees are problematic

AUSTRALIAN's class action regime, including the role of litigation funding, has been an effective and reliable means of delivering access to justice, but contingency fees create undesirable ethical risks, the Law Council of Australia has told a parliamentary inquiry today. 

The Law Council of Australia President, Pauline Wright, told the Inquiry into Litigation Funding and the Regulation of the Class Action Industry, that while Australian class actions were working well, there were opportunities to improve the system.

"Litigation funding can promote access to justice, spread the risk of complex litigation and improve the efficiency of litigation by introducing commercial considerations that will aim to reduce costs," Ms Wright said.

"We therefore support carefully calibrated regulation of litigation funding, in particular by authorising increased oversight by the courts.

"One particular option is to authorise the courts to make common fund orders, which can encourage competition in the class actions market.

“Experience showed that the competitive pressure introduced by the common fund order regime, had a positive downward impact on commissions charged and increased the transparency of litigation funding arrangements," Ms Wright said.

"The Law Council also opposes any additional regulation of Australian legal practitioners. Legal practitioners are already among the most regulated professionals in the country. In addition, class action litigation lawyers are subject to additional intensive court oversight of their conduct."

On the question of contingency fees Ms Wright said the Law Council had formed the view that the positives did not outweigh the negatives.

"On balance, it is the position of the Law Council that contingency fee arrangements should not be supported," Ms Wright said. 

"The Law Council is not persuaded that potential marginal gains in access to justice are outweighed by the risks to the ethical duties of lawyers and the potential effect that any compromise of these duties could have on the interests of class members.”

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COVID-19 inquiry to examine ports and shipping


A PARLIAMENTARY inquiry into the impact of COVID-19 on Australia’s defence, trade and international relations will turn its attention to the pandemic’s impact on Australia’s freight and shipping industries at its next public hearing.

Senator David Fawcett, chair of the Parliament’s Foreign Affairs, Defence and Trade Committee, said that an effective and trusted maritime freight system is critical to Australia’s economy.

Senator Fawcett said, “Australia’s import and export supply chains, including our ports, have underpinned our economy to date and have kept many goods that we depend on moving during the pandemic. Our ongoing prosperity depends on an efficient and resilient shipping and logistics industry.”

Witnesses from the Freight and Trade Alliance, the Australian Peak Shippers Association, and Ports Australia will give evidence on the freight, shipping and logistics sector’s response to the pandemic.

Full terms of reference for the inquiry are on the Committee website.

Public hearing details

Date: Thursday 30 July
Time: 3pm – 4.30pm AEST 
Location: By teleconference

The hearings will be audio streamed live at aph.gov.au/live.

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Hearings continue for homelessness inquiry

THIS WEEK the House Standing Committee on Social Policy and Legal Affairs will hold two further public hearings for its inquiry into homelessness in Australia.

At hearings on Wednesday and Thursday, the Committee will hear from representatives of all three levels of government, including the Lord Mayors of Sydney and Melbourne, the Northern Territory Government, and Federal Government agencies including the National Housing Finance and Investment Corporation.

Other witnesses will include the Community Housing Industry Association and academics from the ANU Centre for Social Research and Methods who have been monitoring the level of housing stress being experienced by Australians during the COVID-19 period.

The Committee will also have the opportunity to hear from individuals with lived experience of homelessness, who will provide a valuable perspective for the inquiry.

Chair of the Committee, Andrew Wallace MP, said the Committee was keen to hear from witnesses about the unique challenges in addressing homelessness in different regions of Australia, and about how the community can better support people who may be particularly vulnerable, including older Australians and veterans.

"We know that the issue of homelessness presents in different ways across the country, from our largest capital cities to our most remote communities. These hearings are an opportunity for the Committee to hear about the different approaches to providing housing and homelessness services in these different communities," Mr Wallace said.

"The Committee will also hear about support services for groups of Australians that we know are particularly at risk of homelessness, including older Australians and veterans, and about the ongoing impact of the COVID-19 situation."

In order to ensure public safety during the COVID-19 situation, witnesses will participate in the hearing remotely, via teleconference. Interested members of the public are invited to listen to the live broadcast, available at aph.gov.au/live.

Further information, including hearing programs and submissions to the inquiry, is available on the Committee’s website.

Public hearing details

Date: Wednesday, 29 July 2020
Time: 8.45am to 4pm
Location: Via teleconference


Date: Thursday, 30 July 2020
Time: 8.45am to 4pm
Location: Via teleconference

 

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Life insurance COVID initiatives extended

WHEN the COVID restrictions began in March, the Financial Services Council’s (FSC) participating life insurers put two major initiatives in place – the commitment to Frontline Healthcare Workers and the Total and Permanent Disability (TPD) claims initiative.

The frontline healthcare workers initiative ensures that frontline healthcare workers are not prevented from obtaining life insurance cover purely because of their exposure, or potential exposure, to coronavirus through the crucial work they are doing on the frontline.

The TPD claims initiative ensures that if people lose their job, are stood down or have reduced working hours due to COVID, this will not affect their TPD cover.

Today, the Financial Services Council (FSC) announced the extension of both these initiatives until January 1, 2021. In the case of the COVID TPD claims initiative, claims need to be lodged on or before March 31, 2021.

FSC CEO Sally Loane said, “These initiatives aim to ease any concerns Australians may have about their life insurance cover during uncertain times.

“What this means is that participating life insurers will have provided additional support to the community right through to the end of 2020.

“If anyone is unsure about what cover they have, contact your superannuation trustee, life insurer or financial adviser.”

https://fsc.org.au/policy/life-insurance/commitments

 

About the Financial Services Council

The Financial Services Council (FSC) has over 100 members representing Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks and licensed trustee companies. The industry is responsible for investing almost $3 trillion on behalf of more than 15.6 million Australians. The pool of funds under management is larger than Australia’s GDP and the capitalisation of the Australian Securities Exchange and is the fourth largest pool of managed funds in the world.

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Young Gold Coast woman jailed for tax fraud

A 32-YEAR-OLD DEREGISTERED tax professional from Queensland has been sentenced at the Brisbane District Court to three years jail today for fraudulently obtaining $192,140 from the ATO by lodging false Business Activity Statements (BAS) and amendments without her clients’ knowledge. She was also ordered to pay $158,845 in reparations.

Alana Hodge, a formerly registered (BAS) agent, was employed by seven businesses. Ms Hodge was trusted by these businesses to manage their business tax obligations.

She abused their trust by changing the bank account details and contact information in the ATO business portal. She went on to lodge 47 false BAS for seven of her clients without their knowledge between 2015 and 2017.

Assistant Commissioner Adam Kendrick said that tax and BAS agents play a vital role in contributing to and protecting the integrity of the Australian tax and super systems.

“The ATO knows that the majority of registered agents do the right thing, but unfortunately there are some agents who take advantage of their clients for financial benefit,” Mr Kendrick said.

Ms Hodge attempted to obtain a further $65,056 in GST refunds, however, she was unaware the ATO had already received a tip off from one of her client’s accountants and were already undertaking an investigation into the suspicious activity. The funds were not released.

“As demonstrated in today’s case, even registered tax professionals can be dishonest and take advantage of their clients," Mr Kendrick said. "That is why it’s important for the ATO and Tax Practitioners’ Board (TPB) to work together to maintain the integrity of the tax profession and identify those who try to undermine their trusted position.”

The ATO has a program dedicated to identifying and addressing agents whose behaviour has an immediate and ongoing threat to the integrity of the tax and super systems, their clients, and the wider Australian community.

“We want to assure the community we take these matters seriously and work closely with the TPB to combat dishonest behaviour.”

The TPB terminated Ms Hodge’s registration in October 2018 and banned her for the maximum five-year term.

This matter was prosecuted by the Commonwealth Director of Public Prosecutions.

https://www.tpb.gov.au/make-complaint.

ATO reporting: via the app or by calling 1800 060 062.

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