Crypto Class Action Alert as Victoria Becomes Forum of Choice
The appeal of contingency fees and Group Costs Orders (GCOs) was apparent, with 75% of claims in the Supreme Court of Victoria going unfunded.
Alex Morris, a KWM partner and one of the report’s authors, said the landscape had changed with the 2020 Victorian Reforms, which introduced contingent fees for solicitors through the GCO scheme,
“Litigation funding for class actions is here to stay, whether through funders or lawyers,” Morris said.
“The Supreme Court of Victoria’s Class Costs Order scheme is the only place where lawyers can now get a percentage of the winnings, and funders can participate with matched funding.
“In contrast, you can try to get a pooled fund order anywhere, but that only works for funders (attorneys are still paid hourly) and there’s a residual legal risk left. “
Mr Morris said it would likely force the hand of the Albanian government, which has signaled similar moves as part of a “less hostile” approach to lenders and class action lawyers.
“You would have to think that the current federal government is trying to standardize these things.
“This means that plaintiffs’ class action attorneys can expect an investment banker’s compensation model to advance: cut the ticket on the transaction rather than hourly rates.”
At least 12 settlements worth $475m have been approved by the courts, with the $125m payout for Crown Casino shareholders topping the list after revelations about criminality in its Australian operations led to a sharp drop in the share price.
Others over $50 million included claims against convenience store giant 7-Eleven (wage underpayment), Colonial First State (super), various automakers (airbags) and education provider Vocation.
The report shows that four law firms – Shine, Slater & Gordon, Gordon Legal and Phi FinneyMcDonald – led the way on class action filings with five each. Among funders, Omni Bridgeway (six) and Woodsford Litigation Funding (five) were in the lead.
The report notes that cryptocurrency claims have emerged in the United States against a range of issuers and exchanges – and also in relation to cryptocurrency investment instruments such as financial derivatives.
“In Australia, momentum in this space is growing,” the report said.
“US class actions give an indication of the causes of action that can be pursued in Australia, at least so long as Australian regulators take a similar ‘stop-start’ approach to their US counterparts in how they categorize and regulate products. cryptographic.
“If and when regulatory scrutiny increases, including as a result of ongoing reform efforts, we expect a surge in cryptocurrency-related class action lawsuits.
“Even as things stand, we expect activity in this space to continue to grow in Australia, especially given increased investment in the digital asset industry and heightened scrutiny by investors and advocates.”