Application for class action funding agreement declaration

Piper Alderman assisted LCM with an application seeking a declaration that it is class action funding agreements are enforceable and are not void for public policy reasons. The Supreme Court of Queensland held that the funding agreements are not unenforceable because of maintenance, champerty, or public policy,

In reaching its decision, the Court considered the lengthy history of maintenance and champerty and whether the torts remain in Queensland, as the tort has not been abolished by statute in Queensland. The Court also considered whether the terms of the funding agreements gave LCM an undue level of control over the proceeding.

The Court declined to bury the torts. However, it confirmed that public policy requirements do not automatically make litigation funding agreements in class actions unenforceable. Importantly, the Court confirmed that the terms of LCM’s funding agreements did not provide LCM with an amount of unlawful control over the proceeding. This decision is significant for litigation funding in Queensland.