Funders Defend Agreement in PFAS Contamination Case

A recent Australian class action award has some legal professionals rankled. Should the federal government take a more active role in regulating agreements between plaintiffs, attorneys, and third-party funders? Attorney General Christian Porter thinks so.

Katherine Times reports that Porter is irate over funding agreements that ultimately leave ‘members of the action to fight over the scraps.’ That’s a harsh indictment, but is it a fair one? The class-action settlement in question, regarding PFAS contamination in several major areas, led to a settlement of over $212 million. Roughly 40% of the settlement will be taken in cost—so about $86 million.

Obviously, the plaintiffs in the case will receive less than they would have without the funding arrangement. Or would they? Chances are that the class action wouldn’t have moved forward at all if not for funding provided by Omni Bridgeway. The funder is due to receive about $54 million in profits and to cover costs from the case.

The judge in the case felt that the fees were reasonable, even though the numbers involved are higher than a layperson might expect. Omni Bridgeway has affirmed that in fact, they are taking $35 million less than their contract specifies. The lawyers from Dentons and Shine are also receiving less than expected.

The most chilling aspect of the debate over funding is the assertion made by Justice Michael Lee. He suggests that funders may not be as interested in increased access to justice as they are in making money. Well, it’s fair to say that investors have the goal of making money, but it doesn’t naturally follow that this leads to malfeasance or a desire to obtain money that rightfully belongs to plaintiffs. Justice Lee went on to assert that some proceedings appear to be run for the convenience of the funder or attorneys rather than those wronged by the defendants.