The more we utilise the skills of accredited mediators and commercially-minded lawyers, the better returns will be for those most in need.
This was the frank reminder from Rares J in the Federal Court yesterday for parties to litigation to take a realistic, commercial and principled approach to resolving disputes as early as possible.
Not the current alleged systemic approach which “is ‘calculated’ to reduce substantially the likely net receipt of the person or class seeking to recover” its loss.
The Court referred to the settled insolvent trading claim against the directors and insurers, wherein, $14m was paid to the Receivers, but only $6.3m was generally available for creditors.
The difference was caused by litigation funding costs and recovery costs, amounting to 55% of the total settlement.
His Honour was at pains to say that the Receiver’s were authorised by him to enter into the funding agreement, and that no criticisms should be levelled at them.
Rather, His Honour’s criticism’s were levelled at the delay tactics and the dissipation of the settlement sum to the benefit of the lawyers and litigation funders, but to the detriment of those who suffered.
Michael Legg – your paper on shareholder class actions (2018) ABLR gets a mention: see para 25.