Why contingency fees should extend beyond class actions in Victorian civil litigation

A lot has changed since I first started studying law in 1999. Class actions weren’t a thing as they are today. HIH hadn’t gone under. Lehman Bros hadn’t yet collapsed. Since then a lot has happened in litigation, insurance and recoveries.

Litigation in Victoria, Australia where I operate has evolved substantially.

Victoria’s unique position on contingency fees

Nowadays, for class actions in proceedings in the Victorian Supreme Court there is legislation which allows for orders that legal costs payable may be calculated as a percentage of an award or settlement. Otherwise known as contingency fees.

This has lead to class actions being commenced here. Yep, that’s right here in Victoria or in Melbourne really. Not Sydney - sorry Sydney Siders but it happens here.

Okay I am being facetious but the truth is class actions are just one part of litigation. One narrow piece. Mega lit.

The broader access to justice issue

The fact is, many challenges with legal costs exist for the average individual or business. Whilst the High Court of Australia has now handed down a judgment related to contingency fees and the decision leaves Victoria as the only state with this… as a commercial litigator in Victoria - am I happy?

Well, here’s the thing. I don’t act in class actions, nor do most litigators AND Before you say, but Blair you are a plaintiff lawyer - an ambulance chaser, untrue to both! I act for defendants as much if not more than plaintiffs.

No win no fee does not exist in insurance, building, property, shareholder or professional liability litigation. The stakes are higher - this is economic loss not personal injury.

Why not expand contingency fees?

My question is this: In Victoria - why stop here? Why stop at class actions?

Contingency fees should be available for civil litigation outside the class action regime.

After all the name is just a fancy way for saying lawyers get paid based on the outcomes they achieve. In my experience, that’s what clients want!

Is there a conflict of interest, NO, there is a confluence of interest. The client succeeds and the lawyer gets paid. Instead matters not pursued see the loss lie where it falls…

A properly regulated framework

My view, don’t stop at class actions. Open the door here in Victoria for contingency fees for non class action litigation that is properly regulated with appropriate:

• Disclosure regime for clients;
• Probity checks that the law firms have the financial position and resources to handle the case through to conclusion;
• Limitations on a percentage basis as to the amount of the award depending on the risk area.

While new Federal Attorney General Michelle Rowland considers contingency fees beyond Victoria, I say the Victorian Attorney General Sonya Kilkenny should consider contingency fees beyond class actions…

What do other lawyers say?

Kain v R&B Investments Pty Ltd
Ernst & Young (a firm) v R&B Investments Pty Ltd
Shand v R&B Investments Pty Ltd

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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• legal practice
• litigation