U.S. Chamber Institute for Legal Reform warns class actions in Australia often leave survivors with little

The U.S. Chamber Institute for Legal Reform has raised concerns regarding Australia's class action system, suggesting that it allows law firms and funders to profit disproportionately while plaintiffs, including those involved in stolen-wages cases, receive minimal compensation.

The case of Minnie McDonald and Mervyn Street exemplifies the challenges faced by Aboriginal workers who, due to illiteracy, relied on others for legal assistance. According to ABC’s Four Corners, despite settlements reaching hundreds of millions of dollars, many workers are expected to receive only modest payments ranging from AUS $10,000 to $14,000 each. This situation highlights systemic issues within the Australian class action framework, leaving vulnerable plaintiffs questioning the efficacy of justice served.

In a notable Northern Territory stolen-wages class action case, the Australian government agreed to a AUS $202 million settlement. However, according to the National Indigenous Australians Agency (NIAA), claimants are projected to receive between AUS $10,000 and AUS $14,000 each after accounting for legal and administrative costs. This disparity has sparked criticism that large settlements primarily benefit the process itself rather than compensating those harmed.

Reports from ABC News reveal that Shine Lawyers could collect over AUS $41 million in fees, while Litigation Lending Services may secure up to AUS $57 million from these class actions. Judges involved in these cases have criticized the "excessive" costs involved. Justice Bernard Murphy has expressed doubts about whether the system prioritizes victims or profits. This imbalance suggests that litigation funding has turned class actions into a profitable venture for law firms and financial backers rather than ensuring justice.

The U.S. Chamber Institute for Legal Reform (ILR), an advocacy affiliate of the U.S. Chamber of Commerce, aims to promote fair and efficient legal systems. According to its official website, ILR engages in research and advocacy to highlight litigation abuses and advance reforms ensuring accountability and economic growth within the justice system.