An Australian court has decided to drop an ongoing lawsuit that had been funded by the Government’s Commercial Litigation Funding (CLF) program.
A decision by Judge David Brown that the CLF should not be used for commercial litigation in Australia has been criticised by the Federal Government, who say the fund was created for the sole purpose of facilitating commercial litigation.
“The CLF program has been a massive boon to commercial litigators who have a need to take their business to the next level and the courts have been the first and most important forum to help facilitate that,” said Labor Senator Sam Dastyari.
“I think this decision by the Court of Appeal will send a clear message to those who are seeking to make use of this fund to conduct commercial litigation that the Government of Australia will not be allowing their commercial litigation funding to be used to circumvent the rules and to undermine the integrity of our courts.”
“Commercial litigation is an important part of our society and we need to ensure that it is conducted in a way that is appropriate to our society,” said Mr Dastyar.
The decision is not expected to impact the CLFs funding to law firms that have already filed suit. “
It will be of great assistance to those involved in commercial litigation and those who wish to take the law into their own hands.”
The decision is not expected to impact the CLFs funding to law firms that have already filed suit.
“As a result of this decision, there will be no further CLFs funds for commercial law firms and the CLFT will be closed to any further commercial litigation activity,” said Ms Pallas.
“Law firms will still be able to fund their litigation in other jurisdictions but the CLFLF will no longer be available to fund those litigation activities.”
The CLFT program was created to encourage law firms to take on the riskier aspects of commercial litigation, like taking on a litigants’ case and preparing a defence.
“For those seeking to pursue their commercial case in the courts, the CLFH will continue to provide funding to those law firms who have the skills and expertise to take that case to trial,” Ms Pares said.
“With the CLFI closing, the Government will no long be able offer funding to litigators who want to undertake commercial litigation to pursue a commercial case and will have to seek funding from other sources.”
Mr Brown said the Government did not agree with Judge Brown’s decision.
“There is no doubt that the Commercial Litigancy Fund was designed to facilitate commercial litigation by helping law firms take on large commercial cases in the Federal Court and other courts in the State of Victoria,” he said.
The Federal Government has said the CLFl fund is not being used to fund criminal litigation.
Commercial Litigators Federation Australia CEO Craig Ritchie said the decision “raises serious concerns” about the CLFF program.
“Commercial litigators are being used as pawns in a cynical commercial game that the Federal government is pursuing to circumvent a system of legal and commercial fairness, and to circumvent Australia’s criminal law and make its way to the highest courts,” Mr Ritchie told ABC Radio Melbourne.
“That’s why the Federal Attorney-General has brought a complaint with the Federal Circuit Court in Sydney to investigate the legality of the CLFG and to challenge the CLFC.”
The Government’s commercial litigation minister, Brendan Nelson, said it was “highly disappointing” the Government was “rejecting a request from a former lawyer for commercial litigancy in the High Court”.
Mr Nelson said the $2.7 billion in commercial litigate funds will now be “used for other legal issues” and would be distributed through the CLFA.
“We will continue our focus on the critical needs of law firms, including commercial litigation,” he told reporters.
“However, the Attorney-general will be seeking further information from the Federal courts, including what will be done with the CLFB funds, in light of the Court’s decision.”
The Federal Attorney General’s office said it will seek legal advice from the Australian Bar Association.