Maurice Blackburn Eschews Litigation Funding; Will File Class Action Against NAB on Contingency

No one will ever accuse Aussie law firm Maurice Blackburn of not being proactive. The class action king (Maurice has filed the most in Australia) is pursuing a class action claim against banking giant NAB, and plans to use a contingency-fee model. There’s just one wrinkle here: contingency-fee arrangements aren’t legal in Australia. The state of Victoria is mulling legislation that would legalize such arrangements, but hasn’t passed the final bill yet.

As reported in the Brisbane Times, Maurice Blackburn plans to file a claim against NAB on behalf of superannuation customers, who were allegedly overcharged fees illegally. Maurice plans to file the claim on contingency, which is not yet legal in greater Australia.

However, the state of Victoria is expected to pass legislation next month allowing the practice. Essentially, the court will determine a proper contingency payout for the plaintiff-side firm, as opposed to the firm being forced to work for a set fee. This would allow Aussie law firms some measure of risk/reward, and inflate the potential profits from the claims they’ve been filing.

The Australian Law Reform Commission has supported the permission of contingency-fee arrangements, noting that lead plaintiffs would be off the hook for costs awards, as law firms would be forced to indemnify lead plaintiffs in order to work on contingency.

However, with the new contingency-fee model in place, funding opportunities may soon dry up, leaving funders like IMF with little choice but to diversify into class action legal services.