The Australian Institute of Company Directors (AICD) has backed a proposal to license litigation funders under an overhaul of the class action framework.

“Australia’s class action regime should operate so disputes are resolved justly, efficiently and quickly,” AICD CEO Angus Armour said.

“Currently, a great deal of time and money is spent on opportunistic cases, where the interests of class-holders may not be the dominant driver.”

The Australian Law Reform Commission has released a discussion paper on class actions and third-party litigation funders and will report to the Government by December.

The AICD says it is cautious about a proposal to ease a longstanding ban on lawyers accepting contingency fees, which would allow them to take a share of money awarded to clients.

“The prohibition exists for good reason,” Mr Armour said. “The potential for a conflict of interest where a law firm both commercially funds and represents a client is great.”

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