Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Corporations Amendment (Litigation Funding) Regulations 2020, made under the Corporations Act 2001, be disallowed.

In moving this motion on the Corporations Amendment (Litigation Funding) Regulations 2020 made under the Corporations Act 2001, I will argue that the regulations should be disallowed by the parliamentarians in this parliament. I hark back to the contributions of my colleagues recently with regard to the scrutiny of bills committee and the work that has been undertaken there, because this is a perfect example of government by regulation and of what is wrong with that.

The regulations that I seek the support of the Senate to disallow today were arbitrarily determined and advanced without warning by the Treasurer, Mr Josh Frydenberg. The regulations as they stand apply to all Australians. They are not fit for purpose, and they prejudged the report of a committee of inquiry that the government itself set up. These regulations that I'm asking the Senate to disallow today are rushed and careless and will only make it more difficult for ordinary Australians to access justice against deep-pocketed corporates.

I want to thank members of the crossbench for their many conversations with me in recent weeks in seeking their support to disallow the action of the Treasurer, Mr Frydenberg. I particularly want to thank Senator Stirling Griff, Senator Rex Patrick and Senator Jacqui Lambie for taking a position that indicates that they really are aware how much this is costing in terms of people's access to justice and that it is a piece of regulation made on the fly by the Treasurer. The Treasurer established an inquiry into litigation funding on 13 May and, only nine days later, on 22 May, stood up and brought in these regulations. There's a famous saying: 'The doors of justice are just like the doors of the Ritz Carlton—anybody can walk in, but money determines who can stay.'

Litigation funders enable ordinary Australians to get their day in court. They're critical in helping launch class actions on wage theft, on the poisoning of farmlands and on properties and businesses affected by poor flood controls, and they've been instrumental in enabling justice for citizens who were affected by the PFAS contaminations and had to fight their own government. In addition, litigation funders support consumers who are ripped off by big corporates. Litigation funders give access to justice to those ordinarily unable to afford it and deter the government and other deep-pocketed entities from reckless and harmful behaviour. Labor believes that litigation funders should be regulated, but only by an appropriate and fit-for-purpose regime that keeps their vital purpose intact and allows for healthy competition between funders.

I remind members of the crossbench that the government established the inquiry to deliver its report on this matter on 13 May. Just a few days later, on 22 May, the government changed its mind and brought in this regulation that I'm asking you to disallow this afternoon. The government's approach has been to impose regulations that will reduce competition in the industry and frustrate and deter ordinary Australians who look to our justice system to right wrongs and secure compensation. This is for people in difficult circumstances who find themselves up against the giants of the corporate world and their own government.

Instead of waiting for the joint committee inquiry, which the government itself set up, to run its natural course, instead of acting on the recommendations of the Australian Law Reform Commission report into class actions and litigation, which, again, this government commissioned, Josh Frydenberg has rushed these regulations through in a chaotic and thoughtless way. Using the cover of the pandemic, the Treasurer decided to pass legislation through to change the regulation of litigation funders to that of a managed investment scheme as well as to require them to obtain an Australian financial services licence. Funded class actions were never meant to be considered as a managed investment scheme and overseen by ASIC in that form. The funders themselves say that the onerous regulatory burden will force funders out of the market, lessen competition and increase the cost of access to justice.

Senator Patrick interjecting—

Indeed, Senator Patrick, I'll take that interjection. ASIC did not want this regulation to be established in that way. We're on the record, on many occasions, as saying a managed investment scheme was an entirely inappropriate way to manage this activity of litigation funders. The regulations as they now stand, because of this disallowance, appear to lack the support of Pauline Hanson's One Nation. I do worry in these uncertain times for many businesses and many Australians right across this country that having a limitation on their access to justice and the continuation of a managed investment scheme structure, and AFSLs, which were constructed without consultation, is not a good outcome for the Australian people—like the Michel's Patisserie franchisees who are seeking recompense in a class action against exorbitant fees forced on them by their franchisors as investors in a managed investment scheme.

Senator Hanson hasn't declared her position at this point of time in the Senate, and I'll still continue to seek her support for my disallowance, to give the Australian people some certainty in the coming period, making sure that no money, time or energy continues to be spent on delivering a managed investment scheme, which we know is an entirely inappropriate vehicle for litigation funding. We want no further uncertainty or limitation of access to justice, or continuance in the haphazard way that the government has gone about this so far. If this disallowance isn't passed this evening it will hurt organisations like the Australian Farmers Fighting Fund, which supports class actions that affect their members, such as in the class actions against the live export ban. It will also hurt workers seeking their only avenue for justice in wage theft cases, because the government cravenly refuses to pass appropriate wage theft laws.

Mr Robert Gibson, a former stockbroker, a director of three stockbroking firms and the lead plaintiff in the landmark Murray Goulburn class action, gave evidence to the PJC inquiry. I want to give voice to his evidence, because he debunked the government's narrative that naive Australians are being ripped off by rapacious funders and being denied their access to justice. Large amounts of money are involved in litigation funded cases, that is true, but they could be excellently considered structures to make sure that Australians get the best value out of those decisions and get the majority of the allocation of any awards that might be determined by the court. I know that Senator Hanson is interested in that matter, and I'm very keen to make sure that that outcome is delivered too. That's why I'll continue to say that today we should disallow this regulation by Mr Frydenberg. We should give Australians certainty and we should make sure that this government, which has acted arbitrarily and dangerously in this regard comes back and puts something that has been considered carefully on the table early in the new year.

Mr Gibson said:

… I've been in this business of investing for quite a long time. I've been around the block a few times. I'm not going to get corralled into anything I don't want to be corralled into. No pressure was put on me whatsoever.

…   …   …

If you try to get rid of litigation funders, you're going to be cutting off the only avenue of redress that 99 per cent of people have, because most of us can't afford to launch actions against corporates.

Mr Gibson went on to say, in answer to my question as to whether the class members had a negative experience of litigation funding:

… not one of them objected, yes. We're talking over 1,300. They had every opportunity to object if they thought it was insufficient, and not one of them thought it was insufficient.

Mr Gibson is a businessman who knew exactly what he was getting into with a litigation funder. He trusted the wisdom of the judge and he was able to receive recompense for his ill.

The inquiry should listen to these individuals who've actually interacted with class action funders. We have listened, and we're at a point now where I believe that it's clear that the government's ill-conceived scheme, introduced as regulation, is not fit for purpose and should not be allowed to continue. The government even managed to bungle the rollout of this scheme which they've imposed on us by first giving ASIC, the Australian Securities Investment Commission, only a single day's notice before announcing the changes. They forgot to release the required statement regarding the impacts of the regulatory change on business and individuals. These errors alone from this government show how poorly conceived this idea was and how rushed, how sloppy and how damaging regulatory leadership by the Treasurer is proving to be.

These regulations were not the sober reflection of a government following a commission, report or inquiry. They're merely the scribblings in the margins of a party manifesto or a cliff note scrawled on the back of a lobbyist's card discreetly tucked into a minister's pocket. They're heavy on ideology but utterly scant on detail. Is this really what should be at the top of this government's priorities during a global pandemic? These regulations also go against the advice that Treasury gave to then Treasurer Scott Morrison in a review that it conducted in 2015, where it said there was:

… no reason to believe that Parliament ever intended that litigation funding schemes should be regulated as a financial product under the Corporations Act.

When the court case called Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd unintentionally captured litigation funders in the AFSL regime and the MIS provisions of the Corporations Act, ASIC then swiftly moved to grant them relief from these requirements because ASIC believed the plaintiffs would 'suffer considerable delay, expense, uncertainty and disruption as a consequence of the decision'. That is why senators, particularly those on the crossbench who I'm calling on to support my disallowance motion, should support what I'm asking them to do today: these regulations will cause delay, they will cause expense, they are causing uncertainty and they are disrupting the litigation funding action in this country.

Far from listening to his own department or the responsible agency, Treasurer Frydenberg has even refused to make available to the inquiry the decision-making process behind these rushed, alarming, regulatory reforms. He has refused to release key documentation between ASIC and the Treasurer's office to the government's inquiry into these very changes, claiming public interest immunity—that we shouldn't know the conversations that were going on in the background that led the Treasurer of Australia to one day announce an inquiry and a mere nine days later ignore his own direction and come in with regulations over the top. Why is there such secrecy? If the Treasurer has nothing to hide, if his motives are pure and he's acting in the best interest of the Australian public, why on earth would he try to hide that from the joint committee? Secrecy, speed and sloppiness are the three hallmarks of these regulatory changes. You cannot trust this government's future promises of support or reform.

As a member of the committee that delivered the bipartisan report into whistleblowers, I note that the government promised to act on that the urgent need for protections. They made that promise three years ago. We are still waiting. I was also a member of the Senate Education and Employment References Committee, that released the landmark report on industrial manslaughter two years ago. We reported, and people were here in the gallery—mothers and fathers in tears for the loss of their children, their husbands, their partners. For two years the government has done nothing. They had the power. They had two whole years to do something. They did nothing to help. You cannot trust the word of this government. You cannot trust their promises. You can only draw the appropriate conclusions from their actions.

The only supporters for this change in regulation are foreign pressure groups such as the US Chamber of Commerce Institute for Legal Reform, large corporates, lobbyists and insurance companies. The government would have you believe that litigation funders are a bunch of ambulance chasers helping find funds for spurious class actions. But they are giving people access to justice. The regulations as they stand do not protect everyday Australians. I know from my professional conversations with Senator Hanson that she, like me, wants Australians to get access to justice and also to be able to get their fair share of whatever the court decides.

I know that that's your intention, Senator Hanson. I urge you to stand on the side of the Australian people: disallow this motion and give them some comfort. Do not trust this government, who have been found so wanting in delivering the promises they have made in this place, time after time, day after day, year after year. I urge you to act in the interests of the Australian people.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The biggest barrier to justice in this country is financial—that is, the capacity of ordinary people to have their day in court and seek justice. Class actions are crucial to that end. We should be making it easier for people to organise and collectivise to seek justice and take legal action. We should not be making it more difficult, which is what the government is trying to do. The Greens will be supporting this disallowance motion because it is essential that everyday people can access the courts to have the opportunity to fix wrongs they have suffered. In the main, those wrongs have historically been suffered in this country through the actions of governments or the actions of big corporations. The government's Corporations Amendment (Litigation Funding) Regulations do not make it easier for ordinary Australians to access the courts when they've suffered a wrong, a loss or an injury. In fact, they make it harder, and they make it harder deliberately and by design.

The government's regulations require litigation funders to hold an Australian financial services licence. That would include not-for-profit funders like, for example, the Australian Farmers Fighting Fund. The regulations also specify that class actions are managed investment schemes. The government's regulations treat everyday, ordinary Australians who are seeking compensation from corporate or government wrongdoing as if they were some kind of investor seeking to make a profit. Even the corporate regulator ASIC says that the government's regulations are not suitable. The government is trying to make it harder for everyday people to right wrongs by seeking justice through having their day in court. We're talking about people, for example, who are being poisoned by toxic PFAS chemicals. And let's not forget the thousands of people who were totally shafted by this government's robodebt debacle. Research has shown that people who rely on class actions are people who would normally face considerable barriers to asserting their rights in court and accessing the justice that we actually established our court system to deliver. Many are elderly or injured, have disabilities or are dealing with incredible grief or distress because of things that they are suing about. And yet the government wants to make it harder for them to achieve justice.

A good government would begin by making a formal response to the Australian Law Reform Commission's report into litigation funding, which the Attorney-General has had for almost two years now. A good government would consider the 24 recommendations in that report and use them as a base to develop solid and sensible regulations that enable everyday Australians to access our justice system a little bit more easily. Going to court, particularly to get relief from corporate or government wrongdoing, should not be an obstacle course. Everyone needs transparency and certainty and, of course, appropriate regulation, but we should be generating regulation to protect and assist those who are constantly locked out of the legal system simply because they cannot afford to access justice. But this government's regulations are not that kind of regulation. They are actually designed to make it more difficult for people to have their day in court and to access justice, and that is why the Australian Greens will support this motion to disallow them.

Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

I rise to make a brief contribution to this debate and indicate that I will be supporting the disallowance that has been moved. Just to summarise what Senator O'Neill talked about: there was an inquiry established and, part way through the inquiry being established, a regulation was then tabled by the Treasurer. It caught ASIC completely by surprise. And, indeed, there aren't many people on the other side of the chamber itching to stand up and defend this particular regulation.

It is a regulation that I believe will reduce access to justice for small people. That is my deep concern in relation to this regulation. I do understand that Senator Hanson is actually trying to work constructively with the government to find perhaps a more sophisticated arrangement that seeks to balance out protections. I note that, in some sense, this regulation may have come as a result of some senior lawyers actually doing the wrong thing. But I point out that in that situation, in that particular case, the court actually dealt with those people in a very, very firm way. So we can have the status quo whilst a bill is developed with Senator Hanson, and I'd be very open to supporting such a bill.

But I'd just point out that we have heard one of the difficulties with not disallowing something and then waiting for the government to do something. We've mentioned whistleblowers. Whistleblower legislation is the example foremost in my mind. ICAC is another one. There is a stream of different pieces of legislation promised by the government. I thank Senator Hanson; I note she has come into the chamber. Often she does sit and listen to what everyone's got to say and considers what is being said. I'd just say that it would be much better to disallow this and have the Treasurer wanting Senator Hanson's support rather than letting this through and then having Senator Hanson needing the Treasurer to make a decision. She will be in a much stronger position negotiating the legislation that she's seeking if this instrument is disallowed.

Sarah Hanson-Young (SA, Australian Greens) Share this | Link to this | Hansard source

I rise tonight to speak in favour of this disallowance motion and I do so on behalf of many of those who have taken the very difficult step to take on a corporation, a big bank, a big insurer or indeed their own government when they or their community have been wronged, often at the expense of their farms, their environment or their children's health. What we see today is just one step in the government's attack on justice and the participatory democracy that is so fundamental in this country. This is just one block in the wall that this government wants to put up between ordinary Australians being able to seek justice and the government being able to shelter and look after its big corporate mates.

We know that at the moment there are a number of class actions on foot, one of which is controversial in this place and relates to the management of water in the Murray-Darling Basin. We know there are a bunch of small farmers in the Riverina area who are desperately fighting for justice because of the incompetent mismanagement of water. While this class action is on foot, we've just a seen a report come out of New South Wales ICAC that shows that the injustices committed against everyday farmers like those in the Riverina did happen and were overseen by the New South Wales government and—lo and behold!—at this point nothing can happen. Those farmers, those who are fighting for their communities, deserve their day in court.

How do they afford to get their day in court? They do it by coming together and funding those costs collectively. This disallowance motion would make it nearly impossible for those communities to stand up for themselves, their environment, their farms and their future. We know that after the Black Saturday bushfires in Victoria it took a class action to deliver real justice for those impacted. There is also another class action on foot and that is from a number of young people who are standing up for their right to a safe climate and a healthy environment, those who are taking class action to stop the Whitehaven Vickery coalmine. Those young people have a right to justice and a right to have their day in court. How do they do it if they don't come from rich families? They have to be able to rely on litigation funding.

It is absolutely crystal clear that this move by the government is designed to shut down ordinary Australians and to shut them out of the justice system and being able to participate in accessing redress. We know that this is an attack by the government that is just one part of the process, but, in doing so, the government is covering the backsides of big corporates, of the big banks, of big pharma, of the big insurance companies, of the big agriculture and irrigation corporations. Many of these corporations are foreign owned multinationals that come into people's communities, poison their water and rip up their land, and the communities are left with nothing, except when they decide to fight back.

That is what litigation funding allows. It's for everyday Australians who have been wronged so that they are able to take on the injustice they have suffered for themselves and for each other. It is a fundamental part of our system. To take this away is simply giving the green light to big, greedy corporations in this country to keep treating everyday Australians terribly, like mugs, while having absolutely no regard for the consequences of their actions. We know that often class actions that are brought forward are uncomfortable for the government of the day. These class actions could be taking on a government department, a government agency or a corporate mate of the government of the day. But a responsible or a representative government does not take away the right of their citizens to access justice and to have their arguments, their issues and their position heard in court. That is a fundamental part of the Australian democracy.

I said that these regulations are just one part of the government's attack on everyday Australians accessing justice and participating in our democracy. Next in line, of course, we have the government arguing to ban secondary boycotts, to ban the idea of the community and individual citizens coming together to make choices about where they want to spend their money. It is just not okay. This is an attack on democracy. It's an attack on access to justice and it is an attack on the freedom of Australians. It is not the type of position or ethos that should come from the conservatives in this place, for heaven's sake. But, when it comes to covering the backsides of their big corporate mates, they'll sweep aside the concerns of regular Australians and they'll chip, chip, chip away at these fundamental rights.

It's important for the Senate today to vote in support of this disallowance motion, to sweep away this attack and to send a clear message to those on the other side that we are not going to sit by and let everyday Australians be taken for granted just because the people abusing the land and their workers' rights and their freedoms happen to be cosy corporate mates—big agriculture, big pharma, the big banks and the big insurance companies. They're the ones who desperately want this motion to fail because they don't want to be held to account in court for their negligence, their misinformation and their disregard for the rights and freedoms of everyday people and for the environment. I urge the crossbench not to give big pharma, the big banks and the big irrigators a win today. Give everyday Australians and our community the assurance they need that, if something goes wrong, they can have their day in court and they don't have to be rich to access justice. They should be able to work together, fund together and make sure that they can access justice in a way that delivers the proper redress, if that is indeed what the court of the day decides.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

There is a very important decision to be made with regard to this disallowance motion. I know the passion Senator O'Neill has about this. She's concerned about the Australian people, as all of us are. But listening to these speeches today—boy, I've heard some spin put on it, and the truth hasn't even come out. So, the people who are listening or watching are thinking, 'What's going on here?'

I don't favour either side in this place—neither the Liberal-Nationals or Labor. All the decisions I make here are based on research and from listening to both sides. I've had constant conversations with Senator O'Neill with regard to this; I've listened to her. I've had discussions with the government as well, about finding the right decision for the Australian people, for those people who deserve justice. There has to be justice. To say that it's only for the big end of town, if you've got the money to go to the courts—that's not the truth. The truth here is that we're talking about litigation funders. Let's talk the truth here.

Litigation funders have been coming into this country, backed by people around the world who've put in the money. And do you know where they pick to do litigation funding? Australia: 'Go down under. They have a lot of litigation there—big payouts'. Statistics show that, historically, litigants who use litigation funders lose up to 50 per cent of any judgement awarded—50 per cent! I don't hear you talking about that. Not only that, but they're not registered here in Australia. They actually send the money to the Cayman Islands. We don't even get taxes out of them. They're only doing it for the profits, for the money in their pockets.

We just had the litigation over robodebt. It was $1.2 billion. I wonder what they got out of that? How much did the Australian people get out of it? Have you spoken about that? Do you really care what the Australian people are getting out of it? No-one has really spoken about that. But I have been doing my research and talking to government about the Australian people getting money out of this. They're the ones who are hurting. And in my negotiations, in talking to the government, I have found that there is a minimum payout of 70 per cent, or even more, to others. But you're more worried about the litigation funders making their millions of dollars out of it. If they're represented by themselves, not by the litigation funders, they receive approximately 85 per cent of the awarded payouts. Isn't that important? Isn't that what this is all about? Don't we want to see a regulated industry here in Australia with this funding—that they are registered, that they are up-front, that they are going to represent the people, that it's not going to go into pockets around the world, to people who are not paying their taxes here in Australia? Isn't that what's important about all this? And don't say that they're not getting justice; there is justice. There will be justice, but they will be registered.

I know the Labor Party has a big interest in this, because of their firms: Slater and Gordon, Maurice Blackburn, and Shine—litigators. They take on these cases, because of the money. They get funded by litigation funders from around the world to take them on, to be the lawyers, and a deal's been done. So, they make a lot of money out of this, and I'm sure some of that money goes back into the Labor Party. There is self-interest here. That's what we need to stop, because these litigators can still represent the Australian people. Let the Australian people decide. If you allow non-profit organisations, people can go and represent themselves, and if they've got to be registered then so be it, because you don't want every Tom, Dick and Harry taking their cases to the courts; it's not feasible to do that. It has to be regulated in some way.

I have spoken to the government about this. I have no problem if it's held up—okay. The report was supposed to be brought down a lot sooner, earlier this year. We've had a hell of a year. It's been totally different to any other year, with COVID-19. Everything's been put on hold. But the fact is that this is moving forward. I'm not going to support this disallowance motion, because, in my working with the government, what I'm trying to do is bring forward an outcome for Australians where they will get a bigger payout—they are the ones that are hurting; not the litigation funders, not these lawyers that are making a lot of money out of it. They don't want to see the change. They're not interested. My position here is to look after the Australian people. It's quite interesting that Mark Dreyfus, a member in the other house, put out this tweet today:

URGENT: The Senate votes today on whether to overturn the Government's move to deny access to justice to ordinary Australians, particularly farmers and households in rural & regional Australia.

Where was the Labor Party and where was Mark Dreyfus when it was One Nation that pushed for the Select Committee on Lending to Primary Production Customers that we chaired? We listened to those farmers. We listened to those people. They were losing their land, being taken over by administrators and liquidators. That's why the royal commission came about. So how dare Mark Dreyfus raise this and say that we don't particularly care about the farmers? That's all I have ever talked about in this parliament: about the farmers and the man on the land. The tweet goes on:

Will @PaulineHansonOz … stand with farmers or with the Liberals?

It's not about whether I'll stand with either one. I have always backed the farming sector in Australia. No-one can ever deny that. So I think it was a below-the-belt punch from Mark Dreyfus. There was no need for that at all.

I'm sick and tired of getting bullied in this place and being told that I'm supposed to make decisions based on what you think is right—both sides of government here, whether it's Liberal or Labor; whoever is in government. Do you think you've made the right decisions? Do you think that you've never done wrong? The Labor Party stands up there and criticises the Liberal Party now, because it is in government. What the Labor Party has done has not been up to the standards of the Australian people either. The fact is that I will make decisions based on what I think is right for the people, and I won't be bullied by either side.

My decisions will be based on what I think is right for the Australian people, and I will keep working with the government and pushing for the outcome that I want. I want a regulated industry where people have to be registered here in Australia—not litigation funders from overseas, who are funding it and getting millions and millions of dollars out of Australian people without paying Australian taxes. I also want the people who are awarded the money to get the money, not these rich lawyers—you know: 'Here comes another sucker; we're going to get as much as we can out of them.' That's who we should be supporting: the Australian people. That's why I will be continuing to work with the government so that this is dealt with, and it's the end of the year so I am hoping this is going to be dealt with ASAP. That's where I'm at. And I'll put it on the record in case you think this is the case—and it always gets thrown in my face by the Labor Party: what deals has she done?—no deals have been done. I don't do deals. I actually state the case. I research it, I look at it, and I make my decisions based on what I think is right for the people in this country. This is the way I'm going with it. Congratulations on all the work you've done, Senator O'Neill, but we will not be supporting you in this disallowance motion. I hope that next year we can celebrate, when changes are made to give fair and balanced—

Hon. Senators:

Honourable senators interjecting—

Wendy Askew (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Paterson.

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I know we're pressed for time. I want to make a brief contribution to this debate because I am chairing the relevant inquiry. I will soon be handing down the report into this question and I want to share some facts that have been omitted from this debate so far. If Senator O'Neill's motion today were to be successful, litigation funders would no longer have to seek and be granted an AFS licence. What does an AFS licence require someone to do? It requires them to act efficiently, honestly and fairly. Which of those three, Senator O'Neill and the Greens, do you think should not be required of litigation funders?

Senator O'Neill interjecting—

Wendy Askew (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order!

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Do you think they should not be required to act efficiently? Do you think they should not be required to act honestly? Or is it that you don't think they should be required to act fairly?

The record in fact shows that since these regulations were introduced litigation funders have applied for and been successfully granted AFS licences. As they said before the committee, they don't think it is a significant obstacle. The complaint they did have was largely around managed investment schemes, and ASIC has given them enormous relief from the regulations imposed under MISs.

Senator O'Neill interjecting—

With regard to every complaint they made during the inquiry about the application of the MISs, ASIC has granted them relief from complying. So this is a totally phoney and false debate. It is bizarre to hear the Greens and the Labor Party come in here and defend litigation funders who are generating 500, 600 or 700 per cent returns from cases, which they are then remitting to their headquarters in the Cayman Islands, the British Virgin Islands or the Channel Islands—they're quite fond of islands! I never thought I would see the day the Labor Party and the Greens would combine to try to defend financiers making off our legal system what Labor and the Greens would normally call record and obscene profits.

Wendy Askew (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Paterson, please take your seat. I have Senator Hanson on a point of order.

Pauline Hanson (Queensland, Pauline Hanson's One Nation Party) Share this | Link to this | Hansard source

I'm very interested in what Senator Paterson has to say. We had the courtesy to allow these other people in the chamber to have their say. I expect the same courtesy to be paid to Senator Paterson so that we, and other people, can actually listen to this debate.

Wendy Askew (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I agree. Interjections are disorderly. I call Senator Paterson.

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Hanson. I'd like to point out that we require a suburban financial planner with the most meagre of resources to have an AFS licence to practise in this country. It is a pretty basic requirement for operating as a financial services provider. The Federal Court had found that litigation funders were financial services providers and were required to have an AFS licence and be considered an MIS until Mr Bowen, as the financial services minister, issued a regulation of his own, Senator O'Neill—I know you have strong objections to regulations—to exempt them from that requirement. That was despite the fact that the courts had found that they were subject to it.

I look forward to handing down the final report of the committee so that the parliament can consider a more durable solution to this problem. In the meantime, it would be an enormous mistake to get rid of these regulations, which require very basic, very minimal standards of efficiency, honesty and fairness.

Wendy Askew (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Paterson, I have Senator O'Neill on a point of order.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I never thought I'd hear Senator Paterson arguing for more regulation.

Wendy Askew (Tasmania, Liberal Party) Share this | Link to this | Hansard source

That's not a point of order, Senator O'Neill. Senator Paterson.

James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

I had concluded my contribution but, since I've been invited by Senator O'Neill to continue, allow me to say I'm much more comfortable in arguing for consistent regulation across all of our financial services providers, so that everybody is on an even playing field, than Labor or Greens senators should be arguing for tax-haven-domiciled financiers who are making extraordinary profits off, frankly, very vulnerable people. Through the inquiry we have heard many tales of participants in class actions getting only cents in the dollar of what they deserve to get—

Senator O'Neill interjecting—

from their rightful payout, because of these people. You might be comfortable defending them, Senator O'Neill and the Greens, but I think that reflects on you. Our concern should be for class action participants, not for those who are making superprofits out of our justice system.

Richard Colbeck (Tasmania, Liberal Party, Minister for Aged Care and Senior Australians) Share this | Link to this | Hansard source

The regulation ensures that litigation funders operating in Australia are treated like other financial services providers and have to hold an Australian financial services licence and be regulated by the Corporations Act, which ensures that they have a legal obligation to act efficiently, honestly and fairly.

Scott Ryan (President) Share this | Link to this | Hansard source

The question is that the litigation funding regulations, business of the Senate notice of motion No. 1, be disallowed.