Case in Australia addresses disclosure of litigation funding arrangements

17th May 2016

Jones Day reports that in a recent case in Australia, Coffs Harbour City Council v Australia and New Zealand Banking Group Limited, disclosure of redacted portions of the litigation funding arrangement was sought.

Australia Federal Court requires the disclosure of litigation funding agreements in class actions, however it allows redaction of certain elements of the agreement under principles of confidentiality that could give the opposing party a tactical advantage. These elements include the amount the funder could receive from the settlement, settlement mechanisms outlined in the funding agreement, and provisions for termination of the agreement. Justice Rares ruled that these elements in this case would remain redacted; however, the court concluded that a claim of legal professional privilege was not sustainable. Rather, as the Jones Day article explains, “[I]ts ruling relating to the redactions dealt only with the situation of the litigation at that specific point in time. For example, in the future the court may be required to determine the appropriateness of the award in the funding agreement (which would make the funding agreement public), or the provisions dealing with settlement or termination may lose their confidential aspect”.

In contrast to the federal court practice in Australia, England and Wales has no rule requiring disclosure of third party litigation funding agreements. The Australian guidelines as reiterated by the court in this case strike a balance, mandating disclosure of the agreement while allowing some information to remain private. It is a balance worth careful examination. Review recent research published by the Institute for Legal Reform, Before the Flood: An Outline of Oversight Options for Third Party Litigation Funding in England and Wales to learn more.