Australian Business Association Calls For Reform Amid Skyrocketing Insurance Premiums
30th Jul 2020
The Australian Industry Group (Ai Group), a national association of businesses, called for class action reforms while insurance premiums skyrocket, according to Insurance News AU.
Ai Group said there are some instances in which directors’ and officers’ (D&O) insurance premiums have increased by 600 percent. To combat this, Ai Group urged a parliamentary inquiry into class action litigation and third party litigation funding to take up a list of provisions including a national licensing regime for funders, ending the opt-out arrangements in class actions, and banning the use of contingency fees.
“Implementing carefully considered changes to class action laws to achieve a fairer outcome for plaintiffs and businesses, will not impede access to justice. The current laws are only operating in the interests of litigation funders and the law firms they are partnering with,” Ai Group CEO Innes Willox told Insurance News AU.
In terms of litigation funding, Willox pointed to a report from the Australian Law Reform Commission that found that the median return to plaintiffs was only 51 percent of the amount awarded in cases backed by litigation funders. In cases without litigation funders, median plaintiff return was 85 percent of the compensation.
Willox said the current system allowed a “flood of cash from unregulated overseas litigation funding firms” to warp the Australian legal system without necessarily benefiting plaintiffs.