CLASS ACTION BILL – Good for People, good for “good” Businesses says Barton

The Uber Class Action would have been simpler and of more benefit to participants if contingency fee legislation introduced in Victoria's State Parliament this week had been in place three years ago according to Transport Matters Party leader Rod Barton.

Mr Barton voted in favour of the bill, which allows a legal firm to take a percentage of the amount received in a class action case to cover its fees and spreads the cost burden across all class members.

"The reality for individuals who pursue this type of justice has been a long, hard journey just to get to the starting line," he said.

"If you are fortunate enough to find good, helpful advice, as I was in the Uber Class Action, there are many thresholds and hurdles that even a potentially strong class action must overcome before even the best firms can get a case off the ground."

Watch the video of Rod's speech in Parliament here.
Read the hansard transcript here.

In an average year, five or fewer class actions are filed in the Victorian Supreme Court and if a class action is unsuccessful, the lead plaintiff might be held personally liable for the defendant’s costs. This risk might prevent some legal claims from proceeding.

Mr Barton said that without the help of Harbour Litigation Funding to indemnify the lead plaintiff and cover the costs of the case, the Uber case would never have made it to court.

"These funders understandably expect a return on their money in the event of a successful outcome down the track and that commission is typically around 30 percent or more of a settlement.

"Add to that the legal fees and 50 percent or more of any settlement goes straight out the door before any money can be given back to the people who need it most, the individuals that have suffered," he said.

He said it would have been "a whole lot simpler and would be a whole lot cheaper for us if this Bill was in place and allowed a simple contingency fee split between lawyer and client as opposed to the complicated arrangements we’ve had to use just to get the case off the ground."

He said the payout at the end for taxi and hire car operators who suffered because of Uber's illegal activity in the market would be much larger if they had been allowed to negotiate contingency fees directly with their legal representations.

"By passing this bill today I hope that other groups get a chance to see justice and compensation when they are wronged like we were."

Mr Barton also hit back at misinformation that has been peddled by Liberal members opposed to the bill suggesting that class actions will hurt investment and business.

"To that I would say this: The class action regime has been around for 28 years and in that time, the only businesses to suffer from it are those that have broken the law and inflicted mass harm on people by selling dodgy products, providing deceptive investment advice or those complicit in negligent behaviour leading to devastating floods and fires, among other things."

"This bill will be bad for businesses that rip off consumers, businesses who sell faulty products that maim, injure or worse. But it will actually be good for all those businesses who do the right thing, who want to treat their customers and suppliers fairly and who take their safety obligations seriously. By helping hold wrongdoers to account this bill will help good businesses."

There is current Federal Liberal Government inquiry into litigation funding and the regulation of the class action industry.

However, there have already been three extensive, independent inquiries into this space over recent years, all finding the system was working well and could further be improved for claimants with the introduction of measures such as contingency fee billing.

"This Bill is about people, it is about justice and it is about doing what we can to ensure a level playing field is available through the legal system for everyday Victorians like taxi and hire car drivers when things do go wrong."