4 years ago
ASIC CALLS OUT LIBERALS OVER THEIR DISHONEST CAMPAIGN
MARK DREYFUS QC MP
Australia’s corporate regulator has called out the Morrison Government for its incompetent and politically driven crackdown on class actions and litigation funds.
On 22 May 2020, the Treasurer announced that litigation funders would be required to hold an Australian Financial Services Licence and that plaintiffs in class actions would be regulated by ASIC as investors in a Managed Investment Scheme.
Now, in response to Questions on Notice from the Labor Deputy Chair of the Parliamentary Joint Committee on Corporations and Financial Services, Steve Georganas MP, ASIC has advised that:
On 22 May 2020, the Treasurer announced that litigation funders would be required to hold an Australian Financial Services Licence and that plaintiffs in class actions would be regulated by ASIC as investors in a Managed Investment Scheme.
Now, in response to Questions on Notice from the Labor Deputy Chair of the Parliamentary Joint Committee on Corporations and Financial Services, Steve Georganas MP, ASIC has advised that:
- ASIC was not told about the Treasurer's announcement until the night before the announcement – when Josh Frydenberg called James Shipton, the Chair of ASIC, to tell him.
- ASIC has not received any written information explaining what exactly the Treasurer is proposing.
- ASIC was not asked to provide any written advice prior to the Treasurer’s announcement.
Given this shambolic and ill-considered process, it's no wonder that public servants in the Prime Minister's own Department slammed the Treasurer for failing to conduct a proper assessment of the red tape impact of his ill-suited policies.
The Treasurer’s announcement of new regulation for litigation funders came after the Morrison Government established a Liberal-controlled parliamentary inquiry to determine whether litigation funders should be regulated.
In other words, the Treasurer’s announcement pre-empted the pre-determined outcome of the Government’s own sham inquiry.
Labor will always support sensible law reform. But this Government has just held a comprehensive inquiry into class actions and litigation funding - the Australian Law Reform Commission’s Integrity, Fairness and Efficiency – An Inquiry into Class Action Proceedings and Third-Party Litigation Funders.
The over 300-page final report made 24 recommendations for reform of class action law and procedure in Australia but 18 months later the Government has still to even respond to the ALRC’s report.
Instead of responding to the Commission, the Morrison Government decided that now – in the middle of an unprecedented public health and economic crisis – was a good time to make ill-considered regulatory changes and conduct sham inquiries into class actions and litigation funding. What planet are these people living on? Where are their priorities?
The Australian Treasury and the Parliament should be focused on the real economic challenges facing Australians – not the weird ideological obsessions of a small number of Liberal Party ministers and backbenchers.
Class actions make up fewer than 0.68 per cent of all cases filed in the Federal Court. The number of class actions actually fell last year and the rate of class actions in Australia is low by international standards.
The first hearing of the inquiry into class actions and litigation funders confirmed what Labor has been saying since day one: the Liberal assault on class actions is a shameless move towards denying justice and fair compensation to ordinary Australians. The Liberal Party is not interested in the truth about class actions and has no interest in engaging in this debate honestly and in good faith.
The Treasurer and the rest of the Morrison Government should drop their unjustified and disproportionate attack against class actions and focus on the economic and unemployment crisis facing the country.