Steve Georganas (Adelaide, Australian Labor Party) Share this | Hansard source

I'm pleased that this side of the House is opposing the Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021 vehemently. It is doing so because class actions are an important part of our judicial system. They gives the little person a voice. They give people the ability to undertake a court battle that perhaps their finances, in 99.9 per cent of the cases, wouldn't allow.

We saw the minority report, which I tabled in here the other day. We had an inquiry into the bill, and it was rushed through. We were given one day to hear witnesses. We couldn't call all the witnesses up that we wanted to. We had no time to have a good deliberation and understanding and to give other people a voice. This was rushed through. This was a plan by the government to rush through a report to bring this legislation on.

It makes you wonder why they are desperate to pass this legislation. Why are they desperate to pass this legislation concerning an important part of our judicial system? Some of the evidence that we heard in the committee was quite damning of this bill. In fact, Justin Gleeson said in a submission that this bill could be unconstitutional. That raises questions that should be answered. We asked for answers, we wanted it investigated further, but of course the government numbers on the committee made that impossible.

Without a class action regime, such small people, everyday Aussies, battlers, wouldn't have their voices heard. They wouldn't have the means to seek redress or compensation in the courts on their own. This has given the ability to have some form of justice to many people. We've seen it recently with the robodebt debacle. Through a class action, $112 million will be distributed to 450,000 eligible individuals of that group, people who would otherwise never have had a voice. They wouldn't have been able to fight the government to have justice. These people needed justice. There was money taken from them which shouldn't have been taken from them. On their own they had no chance of beating the government. But, through a class action, funded appropriately, this was possible, and $112 million is now there for the 450,000 people that had some wrongdoing to their debts et cetera through robodebt. But these claims are very costly, and most plaintiffs just wouldn't be in a position to fund the actions themselves or cover the costs in case of an adverse finding. Litigation funding schemes are therefore an important part of ensuring class actions are fair and equitable.

The question is how to prevent third-party litigation funders from claiming disproportionate shares of a successful action relative to the costs and risks. Understanding and resolving this question is the aim of the Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021. But this is why the committee's inquiry into this was so important. It just didn't give it any justice by having one day only of hearings and then 24 to 48 hours to table the report. It just did not do it justice. If the government was serious about this, they'd refer it to a Senate committee or another committee to do it justice, by looking at all the issues and what's important over a period of time. It's not surprising that the criticism came from both sides, from corporations as well as the lawyers who do class actions.

This bill and the inquiry process leave a lot to be desired. The bill is intended to protect the interests of plaintiffs in class actions, but in actual fact it does the exact opposite. It takes away the voice of justice from plaintiffs, because, by making it more difficult for people to bring class actions in the first place, the bill will protect the interests of powerful defendants. If you look at some of the cases—and we've heard of many of them in the debates; the member for Solomon mentioned a few, the member for Bean did earlier and I'm sure others will mention some—there was a class action on behalf of 10,000 survivors of Victoria's 2009 bushfires in which 119 people died and over 1,000 homes were destroyed. The lawsuit was taken against power distributor SP AusNet and asset managers Utility Services Group after the Victorian Bushfires Royal Commission found that it was a faulty electricity cable that caused the bushfires. In 2014, a $500 million payout was secured, making it the biggest class action settlement in Australia's legal history. You can imagine, some poor farmer, somebody that had a house or a pensioner trying to prove that on their own. It would have been impossible. It was quite obvious when we had the many witnesses who were part of the class action before us and we asked them the direct question, 'If it wasn't for the class action and the system that exists, what would have been the outcome?' Pretty well 100 per cent of them, all of them, said zero, zilch, nothing. There wouldn't have been a payout, they wouldn't have had their voice heard and they wouldn't have had any findings against the rich and powerful companies they were fighting. That was just one example of the electricity distributor in Victoria.

There have been many others. For example, in 2010, leading litigation funder IMP Australia helped initiate more than 10 class action lawsuits against leading banks, including the Commonwealth Bank, ANZ, Westpac and NAB, alleging that some $400 million had been siphoned from customers. You can just imagine an individual Aussie with a small bank account discovering that for years they had had a tiny little bit siphoned out of their account continuously from the day they opened their bank account trying to fight ANZ, Westpac, NAB or the Commonwealth Bank. They would have had Buckley's. They would have got nowhere. Yet, through this class action system we have, it made it possible for people to have their voices heard, to have justice and to be recompensed for it. It is important. It is so important to keep the system that we have to allow people to have a voice.

Another example is the over 600 shareholders who took a class action against Sigma Pharmaceuticals, initiated in 2010, where $380 million of losses were siphoned through Sigma Pharmaceuticals when the lawsuit came down. They paid out over $300 million to people to ensure that the wrong was rectified.

While class action lawsuits are sometimes criticised for being lengthy and being costly, there is no doubt they have contributed to giving the little people in our society a voice in the way they are treated by powerful corporations and institutions, and there is little doubt these kinds of lawsuits will always be around. But we need the power of collectiveness, to be in a collective, to be a force against some of the most powerful companies in the world and some of the biggest multinational oligarchies that exist. Can you imagine an Aussie battler trying to fight any of them? It would be impossible. We need a good class action system that has outcomes—we have seen outcomes in hundreds of class action lawsuits where the people seeking justice would have had no other way of doing it. Making it more difficult to bring class actions will only be detrimental to Australians.

How can we ignore the overwhelming evidence heard by the committee that this bill will leave class action plaintiffs and defendants significantly worse off? We were told in the committee, repeatedly, that the bill does nothing to resolve the current uncertainty in relation to the availability of common fund orders, recommended by all members of this committee in December 2020. Instead, we were overwhelmingly told the bill promotes uncertainty and confusion around common fund orders. In addition, the bill requires class members to agree in writing to be members of a litigation funding scheme. The committee heard this would lead to an increase in the number of closed class actions and possibly also multiple class actions for a given event.

Then there is the question mark over whether the bill is actually constitutional or not; I raised this earlier. Clearly, this is a real, serious problem. It is difficult to overstate the level of concern expressed by the submitters to this inquiry about the advice received from Justin Gleeson that the bill may not be constitutional. That in itself should be investigated before this bill goes any further. That is a serious question.

Labor members sincerely regretted that they weren't able to do this bill the justice it deserved and have a proper inquiry. We were given less than one day to consider the majority report and respond to it, but this is nothing new; the entire process around the handling of this bill has been shambolic from the start. Members of the public were given less than one week to review a draft of this complex legislation after it was distributed. We were hoping that people would see it and make submissions. Most of the feedback Treasury received from submitters was ignored, and here we are with the bill being introduced.

Deputy Speaker Owens, I'm sure you'll agree these are important and complex legal matters we're talking about. You cannot have an inquiry and come up with a report within 48 hours—half a day for an inquiry and half a day for the committee to meet and deliberate on such a complex bill. It was a rushed time frame, it didn't create any good debate, and it didn't create ideas coming up with good recommendations et cetera. Obviously the government had a mindset and a plan for this bill and just wanted to bulldoze it through the committee and bring it here to be voted on.

The impact of this legislation will be severe if it gets through. We had litigation funders and plaintiff law firms provide the committee with a list of actual examples of class actions that would not have proceeded, or at least would have been unlikely to have proceeded, had the measures in this bill been in place. They are all attached to the report; if anyone is interested in reading the report and the dissenting report, there are attachments there. I assure you: these are important actions that would have been impeded by this legislation. We were told that most of these wouldn't have seen the light of day had there not been the system of class actions there for us. However, the government insists on proceeding with this bill. It should not do so until the bill has been the subject of a proper inquiry process, whether by the committee that I served on or other parliamentary committees. Such an enquiry is a must before this proceeds anywhere. We need to give witnesses sufficient time to respond to the questions. And, in addition, the Attorney-General's Department needs to comprehensively address, in writing, those concerns that I raised earlier—from Justin Gleeson and other legal experts—about whether the bill is constitutional. These are serious, serious concerns.

The matters handled in this bill could have serious ramifications on citizens' access to justice. It begs the question: who is this bill aiming to protect? I gave a few examples of class actions that were successful, of ordinary Australians who grouped together to take on one of the big corporations—the big banks or the multinational pharmaceutical companies. Those ordinary Australians would have had no success at all without this current system. Individually, they would have been picked off one by one. The high costs of our judicial system wouldn't have allowed them to seek justice. But it's clear that, as this bill stands, it's the people who stand to lose the most if this government has its way and gets this bill through. (Time expired)

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