From the President's Desk: International Litigation Trends Taking Center Stage Across the Globe

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June 05, 2020

By Harold Kim 

This week, I want to highlight some major international developments that could have an impact on the business communitynotably in the United Kingdom and Australia. 

In the UK, oral arguments before the UK Supreme Court began last month in the massive £14 billion collective action over Mastercard’s interchange fees. This long-running, controversial case, which is backed by third party litigation funders, puts the UK’s new collective action regime to the test. The UK Supreme Court’s ruling in this case  will have an impact on whether the UK turns into a new venue for U.S.-style class actions.  

The Competition Appeal Tribunal (CAT) originally rejected the claim. The UK Court of Appeal revived it. Mastercard’s appeal of that decision kicked off last month. Mark Hoskins, arguing for Mastercard before the Supreme Court, said CAT was created to be the “lord of this realm” and serve as an “important gateway” and “filtering function” for mass actions. Unless CAT was found to have made a “genuine error of law,” Hoskins said, its dismissal should be allowed to stand. 

The Supreme Court is not expected to issue its ruling on the case until the end of this year or early 2021. Its ruling will have huge ramifications for the UK’s legal system, and the safeguards it uses to protect from unnecessary litigation. 

On the other side of the world, Australia Attorney General Christian Porter recently spoke to their House of Representatives on third party litigation funding and the growth of class action litigation after launching a formal inquiry into the issueHe pointed to the "eye wateringly high” commissions funders are taking out of class action judgments and settlements, and how litigation funding may be driving the growth of lawsuit filings there. 

Porter said class action lawsuit filings have increased 325 percent in Australia over the last decade, and that 77 percent of lawsuits in 2017 and 2018 received backing from third party litigation funders. Citing the Australia Law Reform Commission, he said “the median return to members of litigation-funding backed class actions was 51 per cent. When the litigation funders weren’t involved, the median return was 85 per cent.” The litigation funding industry has exploded over the past decade. The Australian legal system is seeing its effects firsthand. 

While we are rightfully focused on the liability aspects of the ongoing public health crisis in the United Statesit’s important to remember that legal reform is a global issue. ILR is here to shine a spotlight on what’s happening around the world and caution other nations from importing our problematic legal system.  

06/05/2020