LITIGATION FUNDING AGREEMENT

 

THIS AGREEMENT is made on the Agreement Date.

 

BETWEEN:

 

REGENCY FUNDING PTY LIMITED (ACN 619 012 421) (the Funder)

 

AND:

 

THE CLAIMANT identified below (a Claimant).

 

 

 

INTRODUCTION

 

A.            The Claimant has one or more claims against the Respondent, and other persons have claims which are the same as or similar to the Claimant’s claims.

 

B.            It is proposed that the Proceedings be commenced (by way of a representative proceeding or class action) against the Respondent in respect of those Claims.

 

C.            The Claimant has requested the Funder, and the Funder has agreed, to provide the management and funding to conduct the Proceedings and to pursue the Claims.

 

D.            The Funder has agreed to provide the management and funding to conduct the Proceedings and to pursue the Claims, in consideration of the Claimants providing to the Funder a share of the Proceeds of the Claim.

 

E.             The terms of this agreement govern the relationship between the Claimants and  the Funder in respect of the matters referred to in Recitals B, C and D.

 

 

OPERATIVE PROVISIONS

 

1.              Definitions & Interpretation

 

1.1           In this agreement:

 

Adverse Costs Order means any costs order made in favour of the Respondent against the Claimants in the Proceedings in respect of any costs of the Respondent incurred during the term of this agreement, such costs having been incurred not in breach of this agreement or the corresponding agreements of other Claimants with the Funder.

 

Agreement Date means the earlier of:


(a)                        the date appearing above the Claimant’s signature at the end of this agreement, if the Claimant signs a paper copy of this agreement; or otherwise

 

(b)                        the date on which the Claimant accepts this agreement by clicking the button labelled “I accept” on the Website.

 

Alternative Dispute Resolution Process means any form of negotiation, discussion, conciliation, expert determination or other form of consensual dispute resolution process which seeks to settle any or all of the Claims and/or the Proceedings.

 

ASIC means Australian Securities & Investments Commission.

 

Claim means any claim in the Proceedings in which the Claimant is a party,  or is  a member of a class referred to in the Proceedings, for loss and damage, which the Claimants have or may have against the Respondent, and includes any claim in any appeal from the Proceedings.

 

Claimant means the entity or individual whose details appear at the end of this agreement orwho clicks the button labelled “I accept” on the Website, and in each case, includes such person’s successors or assigns.

 

Claimants means jointly and severally each entity or individual who executes an agreement in or substantially in the form of this agreement, who has claims which are the same as or similar to the Claimant’s claims against the Respondent.

 

Claim Costs means the costs and expenses  reasonably  incurred  by  the Claimants for the sole purpose of preparing for, prosecuting and/or resolving the Claims and/or the Proceedings, including:

 

(a)            professional fees and disbursements of solicitors conducting the Claims and the Proceedings on behalf of the Claimants;

 

(b)            professional fees and disbursements of barristers conducting the Claims and the Proceedings on behalf of the Claimants;

 

(c)            Court filing fees and all other Court fees relevant to the Proceedings;

 

(d)            experts’ fees and expenses relevant to the Proceedings;

 

(e)            witnesses’ fees and expenses relevant to the Proceedings;

 

(f)             other fees and expenses relevant to the Proceedings (including insurance costs); and

 

(g)            Adverse Costs Orders.


Common Fund Order means an order by the Court at any stage of the Proceedings that prescribes an identified recovery rate for the Funder from all Group Members.

 

Conflicts Management Policy means the Funder’s policy, as amended from time to time, for managing conflicts, as required by the Corporations Regulations and ASIC Regulatory Guide 248, the current version of which policy as at the Agreement Date is set out in Schedule 1.

 

Corporations Regulations means the Corporations Regulations 2001 (Cth).

 

Court means the court in which the Proceedings are conducted.

 

External Controller means:

 

(a)                         in relation to an individual, an official trustee in bankruptcy, an official receiver in bankruptcy, a trustee in bankruptcy and/or a controlling trustee;

 

(b)                        in relation to an entity, an administrator (including a voluntary administrator, a court appointed administrator and an administrator under a deed of company arrangement, scheme of arrangement, compromise or other arrangement) and/or a liquidator (including a provisional liquidator or a court appointed liquidator); and

 

(c)                         in relation to any property of an entity, a receiver, manager and/or controller (including a provisional controller or a court appointed controller).

 

Funder means Regency Funding Pty Limited (ACN 619 012 421).

 

Group Members means all members of the class referred to in the Proceedings, whether or not they are Claimants.

 

GST means goods and services tax payable under Australian law.

 

Judgment means any judgment of the Court against any Respondent in respect of any Claims or any part of any Claims in the Proceedings.

 

Lawyers means Quinn Emmanuel Trial Lawyers, Sydney and/or any other solicitors appointed by the Funder in their place.

 

Personal Information has the meaning given to it in the Privacy Act 1988 (Cth).

 

Proceedings means the proceedings commenced in the Court in respect of the Claims, and includes proceedings for preliminary discovery and any other proceedings or process (including any Alternative Dispute Resolution Process) as part of or consequent on pursuing any or all of the Claims, and includes any appeal from any such proceedings. There may be more than one set of Proceedings. If any Respondent or any property, assets or liabilities of a Respondent come under the control of an External Controller, the Proceedings will also include all relevant methods of pursuing any or all Claims in the bankruptcy, external administration, liquidation and/or receivership of that Respondent (including the lodgment of proofs of debt).


þÿProceeds of the Claim means any money, goods, services, benefits or other consideration received by a Claimant in respect of a Claim, whether provided as a result of a Judgment, a Settlement, or otherwise, and includes ex gratia payments and interest. If any Respondent or any property, assets or liabilities of a Respondent come under the control of an External Controller, Proceeds of the Claim includes any payments in respect of a Claim from that External Controller. Notwithstanding the foregoing, Proceeds of the Claim shall not include  any money ordered by any Court to be paid to the Claimant by the Respondent in respect of legal costs.

 

Respondent means all entities, including Takata entities, vehicle manufactures, and all other entities, domestic and foreign, responsible for the design, manufacture, assembly, distribution, sale, service, warranty and/or recall of the Claimant’s affected vehicle fitted with one or more Takata airbags, and any other persons against whom Proceedings are commenced and in respect of whom the Funder accepts, in its absolute discretion and in writing, exposure to an Adverse Costs Order.

 

Settlement means any agreement, compromise, discontinuance, waiver, payment, release, understanding or other arrangement whatsoever (and whether before or after any Proceedings have been commenced) whereby money and/or, if the Funder so accepts, other property, passes from or on behalf of a Respondent to or for the benefit of the Claimant in respect of any or all of the Claims, in circumstances where the Proceedings do not commence or, if commenced, do not continue as against the Respondent in respect of those Claims, as a result of, or in connection with, the passing of that money and/or that property.

 

 

Termination means termination in accordance with Clause 16, 17 or 18.

 

Trust Account means the interest-bearing trust account kept by the Lawyers for the sole purpose of depositing, and withdrawing, any Proceeds of the Claim.

 

Website means the website relevant to the Proceedings at the internet address regencyfunding.com.au or as otherwise designated by Funder.

 

1.2           In this agreement, headings are for convenience only and do not affect the interpretation of this agreement and, unless the context otherwise requires:

 

(a)                        words importing the singular include the plural and vice versa;

 

(b)                        words importing a gender include any gender;

 

(c)                        other parts of speech and grammatical forms of a word or phrase defined in this agreement have a corresponding meaning;


(d)                        an expression importing a natural person or any entity includes any company, partnership, joint venture, association, corporation or other body corporate and vice versa;

 

(e)                        a reference to any thing (including any right) includes a part of that thing;

 

(f)                          a reference to a party to a document includes that party’s successors and permitted assigns;

 

(g)                        a reference to a Clause or Schedule is a reference to a clause or schedule of this agreement;

 

(h)                        a reference to a statute, regulation, proclamation, ordinance or by-law includes all statutes, regulations, proclamations, ordinances or by-laws varying, consolidating or replacing it, and a reference to a statute includes all regulations, proclamations, ordinances and by-laws issued under that statute;

 

(i)                          a reference to a document or agreement includes all amendments or supplements to, or replacements or novations of, that document or agreement;

 

(j)                           a reference to “including” means “including, without limitation”;

 

(k)                        a reference to “may” in relation to a right of the Funder means “may, in its absolute discretion”; and

 

(l)                          this agreement shall not be construed against any party on the basis of that party being responsible for the preparation of this agreement or the inclusion of any Clause in this agreement.

 

2.              General Provisions

 

2.1           The written terms of this agreement constitute the entire agreement between the parties.

 

2.2           Neither the Claimant nor the Funder intend to be partners, joint venturers, fiduciaries or agents with or to each other. Nothing in this agreement shall constitute the Claimant and the Funder as being partners, joint venturers,  fiduciaries or agents with or to each other.

 

2.3           There will be no variation or amendment to the terms of this agreement except in writing signed by each of the Claimant and the Funder.

 

2.4           A transmission by way of an attachment to an email or by facsimile of this agreement signed by any Claimant will be treated as an original signed by that Claimant.

 

2.5           If any provision of this agreement, or its application to any person  or circumstances, is invalid or unenforceable, the remaining provisions are not affected and each remaining provision is valid and enforceable to the full extent


permitted by law. Any legal or invalid provision in this agreement shall be severable and all other provisions will remain in full force and effect.

 

2.6           The Claimant and the Funder will promptly sign all documents and use their best endeavours to do all things that either of them from time to time  reasonably requires of the other to effect, perfect or complete the provisions of this agreement and any transaction contemplated by it.

 

2.7           The Claimant may not assign this agreement, assign the Claimant’s rights under this agreement, or assign or novate the Claimant’s obligations under this agreement, without the Funder’s written consent.

 

2.8           If either the Funder or the Claimant fails, delays, relaxes or indulges the other in exercising a power or right that it has under this agreement, the Funder or Claimant has not waived that power or right. A power or right may only be waived in writing signed by the Funder or Claimant depending on whichever is to be bound by the waiver.

 

2.9           The Claimant consents to the Funder providing a copy of this agreement to the Respondent, to third parties who reasonably request evidence of the authority granted to the Funder under this agreement, and to any person otherwise under compulsion of law.

 

3.              Provision & Use of Information & Validation of the Claims

 

3.1           The Claimant acknowledges that, by virtue of the terms of this agreement, the Funder has an interest in the determination of the Claims, and the outcome of the Proceedings, and the Claimant consents to the Funder, in the Funder’s absolute discretion:

 

(a)                        investigating the evidentiary basis for the Claims (documentary and oral);

 

(b)                        collating the material documents;

 

(c)                        gathering evidence (documentary and oral);

 

(d)                        investigating the capacity of any Respondent to satisfy any judgment or order which may be made against that Respondent relating to the Claims and/or the Proceedings;

 

(e)                        investigating the interest of the Respondent to settle the Proceedings and/or to resolve any of the Claims, including by way of any Alternative Dispute Resolution Process;

 

(f)                          investigating any other matter that the Funder determines is relevant to the Claims, the Proceedings or its rights or obligations under this agreement; and

 


3.2           The Claimant agrees to preserve and keep any documents relating to the Respondent, the Proceedings and/or the Claims that the Claimant has in its possession, custody or control as at the Agreement Date.

3.3           The Claimant agrees to provide, or to procure the provision of, all information, documents and assistance as the Funder may reasonably request for the purposes of conducting the Proceedings and/or pursuing or resolving the Claims.

 

3.4           The Claimant agrees that any information or documents provided to the Funder may be used by the Funder in conducting the Proceedings and/or pursuing or resolving the Claims and may be disclosed by the Funder for the purposes of the Proceedings or otherwise under compulsion of law.

 

3.5           Any information or documents provided by the Claimant to the Funder remain the property of the Claimant, and will be returned by the Funder to the Claimant at the conclusion of the Proceedings, or following any earlier request from the Claimant  if no longer required for the Proceedings.

 

3.6           þÿþÿThe Claimant acknowledges that the Funder may rely on the information and documents provided to the Funder by or on behalf of any Claimant, including that Claimant’s Personal Information, and each Claimant irrevocably waives any right to bring any claim against the Funder should any information or documents provided to the Funder by or on behalf of any Claimant ultimately be inaccurate.

 

3.7           The Funder may communicate with the Claimant from time to time about the progress of the Proceedings and the Claims.

 

3.8           Without derogating from anything else in this Clause 3, the Funder may use anything provided to it by or on behalf of any Claimant (including information, documents, assistance or otherwise), or generated (wholly or in part) from anything provided to it by or on behalf of any Claimant (including information, documents, assistance or otherwise) such as reports and analyses:

 

(a)                        þÿto assist the Funder to determine whether or not to pursue any claims or proceedings to which this agreement applies (including the Claims and/or the Proceedings);

 

(b)                        to assist the Funder in the preparation, commencement and/or conduct of any proceedings which are commenced (including the Proceedings);

 

(c)                        þÿto monitor and perform the Funder’s actual and potential obligations under this this agreement;

 

(d)                        to review whether it provides or continues to provide funding in respect of the Proceedings, and the Claims (wholly or in part);

 

(e)                        to obtain legal or financial advice, or financial services or insurance, in connection with or in support of its performance of this agreement, including the conduct of the Proceedings and the pursuit or resolution of the Claims; and


(f)                          in any Alternative Dispute Resolution Process.

3.9          The Funder may provide to the Lawyers anything provided to the Funder by or on behalf   of   any   Claimant   (including   information,   documents,   assistance     or


otherwise), or generated (wholly or in part) from anything provided to it by or on behalf of any Claimant (including information, documents, assistance or otherwise) such as reports and analyses.

 

3.10       Except as otherwise provided for by Clause 3.5, the Funder may retain and use anything provided to it by or on behalf of any Claimant (including information, documents, assistance or otherwise), or generated (wholly or in part) from anything provided to it by or on behalf of any Claimant (including information, documents, assistance or otherwise) such as reports and analyses, notwithstanding Termination.

3.11       No proceedings shall be commenced in the name of the Claimant without the prior written consent of the Claimant. 

 

4.              Management of the Proceedings

 

4.1           The Claimant agrees that:

 

(a)                        The Claimant will determine, in consultation with the Lawyers, and the Funder, what Claims should be pursued at any stage in the Proceedings, and the manner in which those Claims shall be pursued (including whether or not, and, if so, when, to pursue a Common Fund Order; and

 

(b)                        Subject to the Conflicts Management Policy, the Funder may communicate with and give day-to-day instructions to the Lawyers on, and may make binding decisions in relation to, all matters concerning the Claims and the Proceedings (including in any Alternative Dispute Resolution Process and/or in any Settlement of the Claims and Proceedings, however, the Claimant may override any instructions given by the Funder by giving the Claimant’s own instructions to the lawyers.

 

Despite this clause, the Claimant shall not be under any duty or obligation to continue with any Proceedings against any Respondent and may abandon, withdraw, discontinue or opt out of the Proceedings.  Notwithstanding such right, the Claimant acknowledges the potential costs consequences under Clause 8.2 as a result of taking such actions contrary to the advice of the Lawyers, and the Funder’s right to terminate this Agreement pursuant to Clause 17.1. 

 

4.2           In conducting the Proceedings, the Funder, the Lawyers and any barristers instructed by the Lawyers may act in the best interests of all Group Members or Claimants where common issues are concerned, or in the best interests of one Claimant only where individual issues affecting a Claimant alone are concerned.

 

4.3           The Funder will provide the following services to or for the benefit of the  Claimants in respect of the Proceedings during the term of this agreement:

 

(a)                        advising the Claimants on strategy and managing the Proceedings;

 

(b)                        considering the advice of the Lawyers and giving day-to-day instructions to the Lawyers on all matters concerning the Claims and the Proceedings;

 

(c)                        facilitating periodic reporting to the Claimants about the progress of the Proceedings  and  the  Claims,  including  if  appropriate  in  meetings      of


Claimants and/or Group Members; and

 

(d)                        facilitating any Alternative Dispute Resolution Process.

 

4.4           The Funder may seek to obtain insurance from a third party insurance provider in respect of any security for costs orders, or other costs orders, that may be made from time to time in favour of the Respondent in the Proceedings.

 

5.              Obligations of the Claimant

 

5.1           For the duration of this agreement, the Claimant must act with honesty and with utmost good faith. The Claimant acknowledges that, if the Claimant provides information that is false or misleading, or fails to disclose any material matter, to the Funder, the Lawyers or the Court, this may adversely affect the Claims and/or the Proceedings. The Claimant shall indemnify the Funder (including as to Claim Costs) arising out of or in connection with any breach by the Claimant of its obligation to act with honesty and with utmost good faith.

 

5.2           For the duration of this agreement, the Claimant must:

 

(a)                       fully co-operate with the Funder, the Lawyers and the barristers retained by the Lawyers with respect to the conduct of the Proceedings, any Alternative Dispute Resolution Process and/or any Settlement process;

 

(b)                       subject to this agreement, follow all legal advice given by the Lawyers and/or by the barristers retained by the Lawyers in relation to the Proceedings and the Claims;

 

(c)                       promptly provide full, frank and honest instructions to the Lawyers and the barristers retained by the Lawyers, and provide the Lawyers with all documents in the Claimant's possession, custody or control, that are  relevant to the Claims or the Proceedings, if so requested by the Lawyers;

 

(d)                        provide a signed witness statement to the Lawyers for use in the Proceedings, attend Court to give evidence in person, and actively participate in any Alternative Dispute Resolution Process, if so requested by the Lawyers;

 

(e)                        diligently prosecute the Proceedings and any appeals, and do all things necessary to enable the Lawyers to ensure that the Proceedings and any appeals are conducted in such a way as to facilitate the just resolution of the disputes, according to law, as quickly, inexpensively and efficiently as possible;

 

(f)                         opt out of, or discontinue, any other proceeding conducted against the Respondent, if the Claims pursued in that proceeding overlap with the Claims in the Proceedings funded by the Funder;

 

(g)                       comply with all orders of the Court and all statutory provisions, regulations, rules and directions which apply to the Claimant in relation to the Claims and the Proceedings;

 

(h)                       provide the Funder and the Lawyers with full contact details, including a street address, an email address, and a phone number, and immediately inform the Funder and the Lawyers of any change in contact details;


(i)                         immediately inform the Funder and the Lawyers of any information, circumstance or change in circumstance likely to affect the Claims, any issue in any Proceedings or the recoverability of any Proceeds of the Claim;

 

(j)                         promptly take all appropriate actions, at the Funder’s expense, and with the Funder’s written consent, required to tax or assess any costs claimed by the Respondent pursuant to any Adverse Costs Order;

 

(k)                       fully co-operate with the Funder to take all appropriate action to diligently enforce any Judgment obtained in the Proceedings against, or  any Settlement with, the Respondent; and

 

(l)                         act with the care and diligence of a prudent business person in carrying out the Claimant’s obligations under this agreement.

 

5.3           For the duration of this agreement, the Claimant must not, without the written consent of the Funder:

 

(a)                        commence any proceedings with respect to the Claims (whether or not the Proceedings have been commenced as at the Agreement Date);

 

(b)                        make any admission in relation to the Proceedings or the Claims, or take any step as a result of which the Proceeds of the Claim may be reduced;

 

 

(c)                        Settle the Proceedings or resolve the Claims (wholly or in part) against any Respondent, or reject any Settlement offer made by any Respondent;

 

(d)                        accept or reject any offer made by any Respondent to engage in any form of Alternative Dispute Resolution Process,

 

(e)                        have any communication with any Respondent, or any officer, servant or agent of any Respondent, relating to the Proceedings and/or the Claims, or any actual or potential Settlement of the Claims, other than through the Lawyers; or

 

(f)                          terminate the retainer of the Lawyers, or retain any other solicitors in place of or in addition to the Lawyers.

 

5.4           For the duration of this agreement, the Claimant agrees to irrevocably instruct the Lawyers:

 

(a)                        þÿto comply with all orders of the Court and all statutory provisions, regulations, rules and directions which apply to the Claimant in relation to the Claims and the Proceedings,

 

(b)                        to conduct the Proceedings efficiently and effectively within the budget agreed with the Funder, in such a way as to facilitate the just resolution of the disputes, according to law, as quickly, inexpensively and efficiently as possible;


(c)                        to keep the Funder fully informed of all material developments in relation  to the Proceedings and the Claims, including immediately informing the Funder if, in the Lawyers’ opinion, the Claimants’ prospects of achieving success in the Proceedings or the Respondent’s capacity to satisfy any Judgment or Settlement is or is likely to be impaired;

 

(d)                        to provide the Funder immediately with a copy of all written advice given by the Lawyers or the barristers retained by the Lawyers in relation to the Proceedings and the Claims;

 

(e)                        if requested to do so by the Funder, to provide the Funder with a copy of all documents obtained from, or provided to, the Respondent in the Proceedings;

 

(f)                          to inform the Funder immediately of all Settlement offers, or offers to engage in an Alternative Dispute Resolution Process, received from any Respondent, and to allow the Funder the opportunity to attend any Alternative Dispute Resolution Process with any Respondent;

 

(g)                        to inform the Funder immediately of any application for security for costs, or other costs orders, made by any Respondent;

 

(h)                        to inform the Funder immediately of any Adverse Costs Order, or of any circumstance which might reasonably give rise to an Adverse Costs Order;

 

(i)                          on behalf of each Claimant, to sign any document and take any steps necessary to give full effect to and enforce any Judgment or any Settlement reached in accordance with the terms of this agreement and approved by the Court (if applicable);

 

(j)                          to obtain, at the Funder’s expense, and with the Funder’s written consent, a taxation or assessment of any of the Respondent’s costs comprising any Adverse Costs Order, and to provide a copy of all documents relating to the taxation or assessment to the Funder; and

 

(k)                        to provide full assistance and co-operation to the Funder in relation to opposing, taxing, assessing or resolving any application for security for costs or any Adverse Costs Order of the Respondent.

 

5.5           For the duration of this agreement, the Claimant:

 

(a)                        þÿauthorises the Lawyers, without waiving privilege, to provide to the  Funder any and all information and documents provided by the Claimant  to the Lawyers; and

 

(b)                        if ordered to do so by the Court in any Proceedings relating to the Claims, authorises the Lawyers to provide to the Respondent any and all information and documents provided by the Claimant to the Lawyers.

 

5.6           For the duration of this agreement, the Claimant:


(a)                        þÿþÿwill immediately notify the Funder if the Claimant is requested or required to disclose any information relating to the negotiation, existence, terms or performance of this agreement, or relating to the Proceedings and/or the Claims, and, if so requested by the Funder, will, at the Funder’s expense, take such steps as may reasonably be available to prevent the disclosure of such parts of the information as the Funder may nominate; and

 

(b)                        þÿþÿwill not disclose to any person, other than the Lawyers or its financial advisers for the purpose of obtaining confidential legal or financial advice, or the Funder, any information:

 

(i)             to which privilege or obligations of confidence attach; or

 

(ii)           which would or may provide the Respondent with a strategic or tactical advantage in the Proceedings;

 

unless the disclosure is in accordance with advice from the Lawyers and is necessary for the purposes of the prosecution of the Proceedings, or is otherwise under compulsion of law.

 

þÿThis Clause 5.6 is a continuing obligation and survives Termination.

 

6.              Funder’s Obligations

 

6.1           þÿFor the duration of this agreement, the Funder must:

 

(a)                        implement the Conflicts Management Policy;

 

(b)                        comply with the Corporations Regulations and ASIC Regulatory Guide 248; and

 

(c)                        provide timely and clear disclosure to the Claimant of any material breach of the Corporations Regulations by the Funder in relation to this agreement.

 

7.              Management of Other Proceedings

 

7.1          The Claimant appoints the Funder to do all or any of the following.

 

(a)                        þÿprepare, complete, sign and lodge any claim and any formal proof of debt or claim on the Claimant’s behalf, in respect of the Claims and any matters incidental to the Claims, with any External Controller appointed by or to any Respondent, or in respect of any property, assets or liabilities of any Respondent;

 

(b)                        attend, speak and vote on behalf of the Claimant at any and all meetings of creditors of any Respondent in relation to any matter then before the meeting; and


(c)                        exercise any of the rights and powers of the Claimant in respect of the matters referred to Clauses 7.1(a) and 7.1(b), including appointing a proxy to vote at any meeting.

 

This appointment is a standing appointment that ceases on Termination.

 

7.2           The Funder may exercise its rights under Clause 7.1 through a nominee appointed in writing by the Funder.

 

7.3           The Claimant undertakes to ratify and confirm in writing the validity of any act or exercise of power by the Funder, or its nominee under Clause 7.2, done in good faith purportedly pursuant to Clauses 7.1 and 7.2, if requested by the Funder.

 

7.4           Nothing in Clause 7.1 or 7.2 authorizes or permits the Funder, or its nominee under Clause 7.2, to do any act or to exercise any power in a manner or with an effect which is contrary to or inconsistent with the terms of this agreement.

 

8.              Payment of Claim Costs

 

8.1           Subject to Clauses 5.1 and 8.2, the Funder will pay the Claim Costs on the terms of this agreement from the Agreement Date.

 

8.2           The obligation of the Funder to pay the Claim Costs in accordance with Clause 8.1 applies only for so long as the Claimant is not in breach of any of the Claimant’s obligations under this agreement.

 

8.3           If, in spite of any objection or appeal the Funder or the Claimant may make, the Court orders the Claimant to provide any security for the costs of the Respondent, the Funder will provide the security for costs in the Proceedings, in such form that the Funder determines and the Respondent or the Court accept, relating to costs incurred by a Respondent during the term of this agreement.

 

8.4           The Funder will pay any Adverse Costs Order in accordance with its obligations under this agreement and in accordance with the wording of the Adverse Costs Order.

 

8.5           If any Respondent makes any payment by way of costs during the course of any Proceedings, that payment will be paid into the Trust Account to be held on trust for the Funder and may be utilised by the Funder in paying or reimbursing any Claim Costs. The Lawyers will pay that money from the Trust Account as directed by the Funder.

 

8.6           If there is any Proceeds of the Claim that is money in the Trust Account at the time an Adverse Costs Order is payable, that money will first be applied to pay the Adverse Costs Order, and the Funder will pay any balance outstanding after such payment. The Lawyers will pay that money from the Trust Account as directed by the Funder.

 

9.              Receipt & Application of Proceeds of the Claims

 

9.1           The Claimant agrees to irrevocably instruct the Lawyers:


(a)                        to receive all Proceeds of the Claim;

 

(b)                        to pay any Proceeds of the Claim (if it is money) into the Trust Account immediately on receipt;

 

(c)                        to hold any Proceeds of the Claim (if it is property) in such manner as the Lawyers consider appropriate, acting reasonably and in good faith;

 

(d)                        to maintain separate records for each instalment of Proceeds of the Claim;

 

(e)                        to apply and pay out of the Trust Account all Proceeds of the Claim comprising money to the Funder and the Claimants in accordance with this agreement, once cleared funds become available; and

 

(f)                          to distribute all Proceeds of the Claim comprising property to the Funder and the Claimants in accordance with this agreement.

 

9.2           The Claimant and the Funder consent to the Proceeds of the Claim of all Claimants comprising money being co-mingled in the Trust Account and applied collectively in accordance with this agreement.

 

9.3           þÿThe Lawyers will hold that part of the Proceeds of the Claim owing to the Funder under this agreement on trust for the Funder and the balance on trust for the Claimants, with the former to be paid to the Funder (if it is money) or distributed to the Funder (if it is property) and the latter to be paid as each Claimant directs (if it is money) or distributed as each Claimant directs (if it is property),  where  necessary in conformity with Clause 9.8.

 

9.4           The Claimant and the Funder agree that all Proceeds of the Claim of all Claimants shall be applied in accordance with Clauses 9.5 and 9.6. This Clause 9.4 is a continuing obligation and survives Termination.

 

9.5           The Claimant and the Funder agree to irrevocably instruct the Lawyers to make the following payments of any Proceeds of the Claim comprising money held in the Trust Account in the strict order of priority set out below, with all payments within a priority level to be made pro rata at the same time:

 

(a)                        first, to the Respondent, a sum equal to the amount of any Adverse Costs Order, as envisaged in Clause 8.6; and if there is any balance

 

(b)                        second, to the Funder, a sum equal to the amount of all Claim Costs which have been paid to that date by the Funder (for the avoidance of doubt, excluding all amounts paid under Clause 9.5(a)) (together with any applicable GST); and if there is any balance

 

(c)                        third, to the Funder, a sum equal to the amount of all Claim Costs which have yet to be paid by the Funder pursuant to Clause 8.1, for the purposes   of paying those outstanding Claim Costs (together with any applicable GST); and if there is any balance

 

(d)                        fourth, to the Funder:


(i)         in respect of any Proceeds of the Claim received on or prior to 1 August 2018, a sum equal to twenty five (25)% of the Proceeds of the Claim; and

 

(ii)        in respect of any Proceeds of the Claim received after 1 August 2018, a sum equal to thirty (30)% of the Proceeds of the Claim,

 

modified as appropriate having regard to any Common Fund Order (together with any applicable GST); and if there is any balance

 

(e)                        fifth, to each Claimant or as each Claimant directs, that Claimant’s share of that balance, as calculated by the Lawyers, with each Claimant to receive the sum calculated as follows:

 

(CL ÷ TLC) x PoC

 

Where: CL       =         the Claimant’s loss

TLC

=

the total loss of all Claimants

PoC

=

the balance of Proceeds of the Claim to be distributed in fifth priority under this Clause 9.4(e)

 

The Claimant agrees that, in the absence of manifest error, the Lawyers’ calculation of each Claimant’s share of the balance payable under this Clause 9.5(e) will be final and binding on each Claimant.

 

9.6           The Claimant and the Funder agree to irrevocably instruct the Lawyers, where the Lawyers hold Proceeds of the Claim comprising property, to distribute that property in specie in same the manner as provided in Clause 9.5, having regard to the market value of that Property as determined by an independent valuer appointed by the Lawyers for that purpose.

 

9.7           If the Claimant receives all or any part of the Proceeds of the Claim, the Claimant will immediately pay it to the Lawyers to be paid into the Trust Account (if it is money) or will immediately give possession of it to the Lawyers (if it is property), in each case to be dealt with on the terms of this agreement. This Clause 9.7 is a continuing obligation and survives Termination.

 

9.8           The Funder and the Claimant agree that their preference is for the Proceedings and the Claims to be Settled for an amount of money and agree that the Funder is, insofar as is possible, to receive any sum to which it is entitled out of any Proceeds of the Claim under Clause 9.5 (in money) wherever possible, rather than under Clause 9.6 (in property).

 

9.9           If, for whatever reason (including error), any Proceeds of the Claim are paid (if it is money) or distributed (if it is property) to a Claimant which exceeds that Claimant’s entitlement under this agreement, the Funder and/or the Lawyers may demand that the Claimant repay the overpaid difference. The Claimant must immediately, on demand, refund (or procure the refund of) the overpaid difference to  the  Lawyers.  Any  overpaid  difference  owing  from  a  Claimant  under    this


agreement may be set-off against future amounts (if any) payable to that Claimant under this agreement. This Clause 9.9 is a continuing obligation and survives Termination.

 

10.           Appeals

 

10.1        The Funder may, but is under no obligation to, fund an appeal in respect of any aspect of the Proceedings, whether or not Judgment was in favour (in whole or in part) of the Claimant (and, hence, the Respondent may appeal) or was in favour (in whole or in part) of the Respondent (and, hence, the Claimants may appeal).

 

10.2        If there is an appeal, the appeal will be conducted in the same manner as the first instance Proceedings are required, and entitled, to be conducted under this agreement.

 

11.           Lawyers’ Retainer

 

11.1        The Claimant acknowledges that the Funder has entered, or may enter, into an agreement with the Lawyer on terms which shall be, if applicable, made available upon request to the Claimant.

 

11.2        The Claimant agrees that it shall have no right to accept, reject, or be consulted  with respect to, any term, or the performance, of the Funder’s agreement with the Lawyers.

 

11.3        þÿThe Funder agrees that, if there is any inconsistency between the terms of the Funder’s agreement with the Lawyers and this agreement, the terms of this agreement will prevail.

 

 

 

11.4        Except in relation to any Alternative Dispute Resolution Process, any Settlement process, and the Lawyers’ performance of the obligations envisaged in Clause 9, if the Lawyers notify the Funder and the Claimant that the Lawyers believe that circumstances have arisen such that they may be in a position of conflict with respect to any obligations they owe to the Funder and any obligations they owe to the Claimant, the Claimant and the Funder agree that the Lawyers may:

 

(a)                        seek instructions from the Claimant, whose instructions will override those that may be given by the Funder;

 

(b)                        give advice to the Claimant, and take instructions from the Claimant, even though that advice is, and those instructions are, or may be, contrary to the Funder’s interests, and

 

(c)                        refrain from giving advice to the Funder, and from acting on instructions from the Funder, where that advice is, or those instructions are, or may be, contrary to the Claimant’s interests.


However, nothing in this Clause 11.5 entitles the Claimant to breach this agreement.

 

12.           Settlement of the Claims

 

12.1        The Claimant agrees that it will be bound by an order of the Court made in the Proceedings approving the Settlement of those Proceedings (unless the Claimant has opted out of the representative proceeding or class action which constitutes the Proceedings)

 

12.2        Where there is a proposed Settlement of any Claims not yet the subject of proceedings, the Claimant agrees that it will be bound by that Settlement, and the Funder may do all things necessary to settle the Claims as part of that proposed Settlement, if:

 

(a)                        the Funder has approved the Settlement;

 

(b)                        more than 50% by value of Claimants whose Claims are the subject of that proposed Settlement have approved of it; and

 

(c)                        the most senior counsel of the barristers retained by the Lawyers in relation to the Claims (or, if no barristers have yet been retained, counsel specially appointed for that purpose) have provided a written opinion to the Lawyers that he or she considers that the proposed Settlement is fair and reasonable to the Claimants in all of the circumstances.

 

The Claimant agrees that, in the absence of manifest error, the  Lawyers’  calculation of the value of the Claimants’ Claims for the purposes of this Clause

12.2 will be final and binding on each Claimant.

 

12.3        Counsel may proceed as he or she sees fit to inform himself or herself before forming and delivering his or her opinion for the purposes of Clause 12.2.

 

13.           Confidentiality & Privilege

 

13.1        Subject to Clause 13.2, the Claimant and the Funder agree to keep confidential all information relating to the Proceedings and the Claims, as well as the existence and terms of this agreement, and  all  information  exchanged  between  the  Funder, the Claimant, and/or the Lawyers  pursuant  to  this agreement.

 

13.2        The Claimant and the Funder may disclose information contrary to Clause 13.1:

 

(a)                        as authorised by this agreement;

 

(b)                        pursuant to any other agreement made between the Claimant and the  Funder;

 

(c)                        as required by law; or

 

(d)                        to any adviser provided that the adviser has agreed to keep the information confidential or otherwise has a professional obligation of confidence.


13.3        The Claimant does not waive privilege in  any  information  or  documents disclosed to the Funder in furtherance of the common interest between the Funder and the Claimant to which such disclosures relate, namely the Claims, and the Proceedings if commenced.

 

14.           Encumbrances

 

14.1        The Claimant warrants to the Funder that, as at the Agreement Date, there is no charge, lien, encumbrance or other security interest or right in, over or otherwise attaching to the Claimant’s Claim or any Proceeds of the Claim to which the Claimant may be entitled, nor is there any creditor holding security over any property of the Claimant, other than as has been disclosed to the Funder in writing.

 

14.2        þÿThe Claimant agrees that, on and after the Agreement Date, it will not dispose of,  or cause, permit or assert any charge, lien, encumbrance or other security interest  or right in, over or otherwise attaching to, the Claimant’s Claim or any Proceeds of the Claim to which the Claimant may be entitled, except with the written consent  of the Funder.

 

14.3        The Claimant must not, without the written consent of the Funder, consent to or enter into any arrangement which permits any person to register a security interest under the Personal Properties Securities Act 2009 (Cth) or otherwise, in, over or otherwise attaching to the Claimant’s Claim or any Proceeds of the Claim, except with the written consent of the Funder.

 

14.4        The Claimant hereby grants a security interest in favour of the Funder over the Claimant’s Claim and the Proceeds of the Claim to which the Claimant may be entitled. The Claimant agrees, at the Funder’s expense, to enter into and execute any document reasonably required by the Funder to perfect that security interest. The Claimant acknowledges that the Funder will be entitled and obliged to register such security interest under the Personal Properties Securities Act 2009 (Cth).

 

15.           Full Disclosure of Information to the Funder

 

15.1        The Claimant warrants to the Funder that, to the best of the Claimant's knowledge and belief, having made due enquiry, there is no information and there are no documents in the possession, custody or control of the Claimant that are relevant to the Claims or the Proceedings, or the potential for any Judgment sum or Settlement sum to be recovered from the Respondent, which has not been disclosed or  provided to the Funder.

 

15.2        If, after the Agreement Date, the Claimant becomes aware of any information or documents that are relevant to the Claims or the Proceedings, or the potential for any Judgment sum or Settlement sum to be recovered from the Respondent, which has not been disclosed or provided to the Funder, the Claimant must immediately inform the Funder of that information or provide those documents to the Funder.

 

16.           Duration of this Agreement & Consequences of Termination

 

16.1        This agreement commences on the Agreement Date and continues until the earliest to occur of the following:


(a)                        all Proceedings (including any appeals funded by the Funder) have concluded, and all Proceeds of the Claim (if any) have been received and applied in accordance with Clause 9; and

 

(b)                        Termination occurs in accordance with Clause 17 or 18.

 

16.2        All obligations of the Funder under this agreement cease on the date that the Termination becomes effective, save for obligations accrued to that date, including:

 

(a)                        payment of any outstanding Claim Costs incurred up to the date that the Termination becomes effective; and

 

(b)                        payment of any Adverse Costs Order against the Claimant in any Proceedings in respect of costs that are attributed to the period beginning on the Agreement Date and ending on the date that the Termination becomes effective.

 

16.3        All rights of the Funder under Clause 9 of this agreement survive Termination insofar as:

 

(a)                        any Proceeds of the Claim were received up to the date that the Termination becomes effective;

 

(b)                        any Proceeds of the Claim are received after the date that the Termination becomes effective, in relation to a Judgment in respect of Proceedings concluded, or a Settlement entered into, up to the date that the Termination becomes effective; or

 

(c)                        any Proceeds of the Claim are received after the Claimant opts out of the Proceedings, but the recovery is for a Claim included in the Proceedings.

 

17.           Termination by the Funder

 

17.1        The Funder may terminate this agreement:

 

(a)                        at any time, by giving 21 dayswritten notice to the Claimant that this agreement and the Funder’s obligations under it are terminated;

 

(b)                        at any time, if the scheduled start date for the trial of the Proceedings is less than 30 days away, by giving 5 dayswritten notice to the Claimant that this agreement and the Funder’s obligations under it are terminated;

 

(c)                        at any time, if any senior counsel retained by the Lawyers gives a written opinion that the Claimant does not have good prospects of success in the Proceedings, by giving 5 dayswritten notice to the Claimant that this agreement and the Funder’s obligations under it are terminated; or

 

(d)                        at any time, if the Claimant defaults in the performance of any of its obligations under this agreement, and has not remedied that default within 5 days of written notice from the Funder requiring the Claimant to remedy the default, by giving 5 dayswritten notice to the Claimant that this agreement and the Funder’s obligations under it are terminated.


18.           Termination by the Claimant

 

18.1        The Claimant may terminate this agreement:

 

(a)                        at any time, if the Claimant exercises a right to opt out of the Proceedings pursuant to an opt out notice; or

 

(b)                        at any time, if the Funder defaults in the performance of any of its obligations under this agreement, and has not remedied that default within 30 days of written notice from the Claimant requiring the Funder to remedy the default, by giving 30 dayswritten notice to the Funder that this agreement and the Claimant’s obligations under it are terminated.

 

19.           Governing Law & Dispute Resolution

 

19.1        This agreement is to be construed in accordance with, and is governed by, the laws of New South Wales.

 

19.2        The Funder and the Claimant submit to the exclusive jurisdiction of the Supreme Court of New South Wales or the Federal Court of Australia (as relevant) and courts of appeal therefrom.

 

19.3        Any dispute, controversy or claim arising out of or in relation to this agreement including any question about its existence, validity, meaning, performance or termination or the rights, duties and liabilities of any party to it may be referred for mediation by a mediator appointed by LEADR. However, such mediation shall not prevent a party from instituting legal proceedings.

 

20.           Notices

 

20.1        All notices given under this agreement must be in writing, and must be served personally, by post or by email to the contact details of the party set out at the end of this agreement, as amended from time to time under Clause 20.2.

 

20.2        The Funder and the Claimant agree to notify the other immediately should any of their contact details change or cease to work.

 

20.3        Notices shall be deemed to be received on the day that they are delivered personally or by email, or on the day after they are posted. If either the Funder or the Claimant receives notification that an email was unsuccessful, they must make all reasonable efforts to contact the other party by telephone or by mail.

 

21.           Privacy & Personal Information

 

21.1        In the course of the conduct of the Claim, the Funder may collect Personal Information concerning the Claimant.

 

21.2        The Funder shall use such Personal Information only for the purposes of the Claim. This use may extend to advertising in order to make contact with other Claimants.

 

21.3        Otherwise, the Funder shall protect the Personal Information of the Claimant as required by the Privacy Act 1988 (Cth).


22.           Acknowledgement & Consent

 

22.1        By signing this agreement, the Claimant.

 

(a)                        acknowledges that the Claimant has been given the opportunity to obtain, and has obtained, all independent legal, financial and other professional advice in respect of this agreement that the Claimant considers necessary;

 

(b)                        acknowledges that the Claimant has read and understood this agreement;

 

(c)                        acknowledges that a legally binding contract in terms of this agreement will be formed between the parties as of the Agreement Date;

 

(d)                        consents to the Funder collecting, storing, using and disclosing Personal Information provided by the Claimant in accordance with and subject to this agreement;

 

(e)      if the Claimant is a trustee of a trust, warrants that the Claimant has full power and authority to enter into and perform this agreement; and

 

(f)        þÿconsents to allow the Funder to contact you with information about and updates regarding this Claim and possible future claims.

 

 

EXECUTION

 

Executed by:

 

REGENCY FUNDING PTY LTD

 

Signature:                                          

 


Name:


___


Title:


                  


 

CLAIMANT*

 

Date:                                Signature: _

Name:                                Title:                                                    

 

 

 

*Or by clicking the button labelled “I accept” on the Website


SCHEDULE 1

 

Conflicts Management Policy [See attached]


CONFLICTS MANAGEMENT POLICY

 

Introduction

 

1.1           In this Policy:

 

ASIC means Australian Securities & Investments Commission.

 

Claimant means a claimant who is party to a Litigation Funding Agreement.

 

Claims means claims of a Claimant against a person (a defendant or respondent) forming part of a proposed class action (representative proceeding) against that person.

 

Disclosure Statement means the disclosure statement made available by the Funder to Claimants.

 

Funder means Regency Funding Pty Limited (ACN 619 012 421).

 

Lawyers means the lawyers selected by the Funder to pursue the Claims on behalf of all Claimants.

 

Litigation Funding Agreement means an agreement with the Funder to provide the management and funding to conduct proceedings by way of a class action to pursue the Claims.

 

Regulations means Regulation 5C.11.01, Regulation 7.6.01(1)(x) and (y) and/or Regulation 7.6.01AB of the Corporations Regulations 2001 (Cth), in their application to a “litigation funding scheme” or a “litigation funding arrangement” as defined in those provisions, and as amended from time to time.

 

1.2           This Policy provides disclosure of circumstances in which conflicts of interests may arise and the methods for dealing with them if they do arise.

 

Identifying & Dealing with Conflicts of Interest

 

Identification of conflicts of interest

 

2.1           ASIC considers that a conflict of interest may arise where there is a divergence between the interests of the Funder, the Claimant and/or the Lawyers in relation to the Claimant’s funded litigation. The conflicts may be actual or potential, present or future.

 

2.2           ASIC considers that a divergence of interests may arise because:

 

(a)            the Funder wishes to keep the legal and administrative costs of the funded litigation low to maximise its return;

(b)            the Lawyers have an interest in maximising their fees; and

(c)            the Claimant has an interest in minimising the returns of both the Funder and the Lawyers.

 

2.3           In many instances the interests of the Funder and the Claimant will be aligned. This is because the Funder does not receive any payment unless the Claimant recovers a


judgment for damages or a settlement and, apart from recovering expended costs, the Funder’s return is normally a percentage of any judgment sum or settlement sum. It is not in the Funder’s interests for the Claimant’s claim to be resolved for an amount that does not reflect a reasonable settlement or to be pursued in a way that does not maximise the chances of successfully resolving it.

 

2.4           Nevertheless, in some cases a conflict may arise. Below is a description of the main circumstances in which conflicts may occur, and the way in which the Funder will deal with them. If the Funder identifies a conflict which arises during the course of the funded litigation which has not been disclosed to a Claimant, the Funder will bring it to the Claimant’s attention.

 

Potential conflicts arising out of the conduct of the litigation

 

2.5           The Lawyers may face conflicting loyalties to the Funder and to the Claimant. This may be because (for example):

 

(a)            the Lawyers are appointed by the Funder;

(b)            the Lawyers have a retainer agreement with the Claimant and the Claimant is their client;

(c)            the Funder is paying the Lawyers’ fees and expenses;

(d)            the Funder is providing day-to-day instructions to the Lawyers;

(e)            the Lawyers may have a pre-existing relationship with the Funder or with the Claimant or another person in the litigation; or

(f)             the Lawyers may see the Funder as a future source of work.

 

2.6           Further, the interests of the Funder and the Claimant may differ with respect to strategy in the litigation and over which claims to pursue and as to how to pursue them. The Claimant may want to instruct the Lawyers differently to the Funder. This may arise because (for example):

 

(a)            there are different views as to how the funding is to be spent; or

(b)            there are different views as to whether to pursue a claim and its prospects of success.

 

2.7           These potential conflicts are addressed in the Litigation Funding Agreement and/or the Disclosure Statement which:

 

(a)            informs the Claimant of any pre-existing relationships between the Funder and the Lawyers;

(b)            informs the Claimant of the remuneration to be paid to the Lawyers;

(c)            specifies that the Lawyers are to enter into a retainer agreement with the Claimant and to act for the Claimant in the litigation and that the Lawyers thereby owe fiduciary and ethical duties to the Claimant as their client;

(d)            states that, in any situation in which the Lawyers believe that they may be in a position of conflict (except in relation to a dispute resolution process, a potential settlement, or the payment of the proceeds of any Claim as agreed under the Litigation Funding Agreement), they may:

(i)             seek instructions from the Claimant, whose instructions will override those that may be given by the Funder;

(ii)           give advice to the Claimant, and take instructions from the Claimant, even though that advice is, and those instructions are, or may be contrary to the Funder’s interests; and


(iii)         refrain from giving advice to the Funder, or from acting on instructions from the Funder, where that advice is, or those instructions are, or may be, contrary the Claimant’s interests;

(e)            requires the Lawyers to disclose (confidentially) to the Funder information and documents relating to the litigation, including those relevant to the prospects of success of the Claimant’s Claim; and

(f)             sets out procedures to resolve disputes between the Funder and the Claimant.

 

Potential conflicts concerning settlements

 

2.8           The Funder may want the Claimant’s Claim to settle and the Claimant may not, or vice versa. This may happen because (for example):

 

(a)            the Funder and the Claimant have different views about the prospects of success of the Claimant’s Claim;

(b)            the Funder is financially exposed if the Claimant’s Claim is lost (because the Funder has paid the legal costs and has agreed to pay any adverse costs order), but the Claimant is not so exposed;

(c)            the Funder wants to make a return on the money it has invested in the litigation;

(d)            the Claimant may have other motives for settling its Claim that are non- monetary, such as preserving a relationship with the defendant or respondent;

(e)            the Claimant may consider that his or her return (after paying the litigation costs and the Funder’s share of the proceeds of the Claims) is inadequate; or

(f)             the fee provisions in the Litigation Funding Agreement provide for a higher return to the Funder if the litigation resolves at a later point in time.

 

2.9           These potential conflicts are addressed in the Litigation Funding Agreement and/or the Disclosure Statement which provides:

 

(a)            the Claimant agrees that it will be bound by an order of the court made in the proceedings approving the settlement of those proceedings (unless the Claimant has opted out of the class action which constitutes the proceedings);

(b)            where there is a proposed settlement of any Claims not yet the subject of proceedings, the Claimant agrees that it will be bound by that settlement, and the Funder may do all things necessary to settle the Claims as part of that proposed settlement, if:

(i)             the Funder has approved the settlement;

(ii)           more than 50% by value of Claimants whose Claims are the subject of that  proposed settlement have approved of it; and

(iii)         the most senior counsel retained by the Lawyers in relation to the Claims (or, if no counsel has yet been retained, counsel specially appointed for that purpose) have provided a written opinion to the Lawyers that he or she considers that the proposed settlement is fair and reasonable to the Claimants in all of the circumstances.

 

2.10        The Lawyers are authorised by the Litigation Funding Agreement to sign any document and take any steps on each Claimant’s behalf that is necessary to give effect to and enforce any judgment or any settlement which is reached in accordance with the Litigation Funding Agreement (and approved by the court, if


applicable).

 

Potential conflicts around the termination of the Litigation Funding Agreement

 

2.11        The Funder may not want to continue funding the Claimant’s Claim even though the Claimant may want the Funder to do so, or vice versa. This may arise because (for example):

 

(a)            the Funder does not consider the Claimant’s Claim to be commercially viable for it to continue to fund; or

(b)            the Funder does not consider that the prospects of success or chances of recovery of any judgment sum are sufficient to warrant continued funding.

 

2.12        This potential conflict is addressed in the following way:

 

(a)            the Litigation Funding Agreement specifies the rights which the Funder and the Claimant have to terminate the Litigation Funding Agreement and the consequences of any of those rights being exercised;

(b)            the Litigation Funding Agreement identifies non-exclusive dispute resolution procedures in the event a dispute arises between the Funder and the Claimant; and

(c)            the Litigation Funding Agreement may include the cost of any appeals as part of the funding or may state that that Funder is not obliged to fund any appeal unless the Funder decides to do so in its absolute discretion.

 

Potential conflicts in relation to multi-party funding cases

 

2.13        There are potential conflicts which are peculiar to multi-party cases (ie. proceedings with multiple Claimants).

 

2.14        In a class action, hundreds and sometimes thousands of Claimants are members of a defined class and are all represented by one person or entity, referred to as the Representative. Class actions funded by the Funder may include persons who have not entered into a Litigation Funding Agreement with the Funder (e.g. where a common fund order is made), as well as persons who have done so.

 

2.15        Common questions of law or fact are answered for the benefit of all members of the class and then, in a second set of proceedings, the separate Claim of each member of the class may be determined (if there is no earlier settlement) in light of these findings.

 

2.16        The legal costs in class actions are paid by the Funder in accordance with the Litigation Funding Agreement.

 

2.17        Claimants who enter into a Litigation Funding Agreement with the Funder assign a share of any judgment sum or settlement sum that might be received in relation to their Claims to the Funder.

 

2.18        Because of the large number of class members it is not possible to permit each Claimant to appoint a separate firm of lawyers. The Lawyers appointed to act for the Representative will enter a retainer with each member of the class who has entered into a Litigation Funding Agreement.


2.19        A Claimant may be given the opportunity to opt out of a class action, with the consequence that that Claimant will no longer be included in the relevant proceedings. If a Claimant opts out, the Litigation Funding Agreement provides that that Claimant will still be obliged to pay to the Funder its entitlements from any recovery that that Claimant may make in respect of its Claim that was included in those proceedings. Of course, if a Claimant does not make any recovery, then the Claimant will have no obligation to pay anything to the Funder.

 

2.20        Usually, in class actions, control of the proceedings at the common issues stage is in the hands of the Representative, the Lawyers and the Funder. Usually, control of the second part of the proceedings is in the hands of each individual Claimant, the Lawyers and the Funder.

 

2.21        Because of the expense involved in class actions, funding will not occur unless sufficient numbers of Claimants agree to become members of the class and sign Litigation Funding Agreements with the Funder.

 

2.22        Conflicts specific to multi-party cases might arise where (for example):

 

(a)            the Claims of some Claimants are stronger than those of others which:

(i)             might make a global settlement of all Claims more attractive to some Claimants than others; and

(ii)           because costs are allocated between Claimants on a pro rata basis, will result in Claimants with stronger Claims bearing a share of the costs of the weaker Claims;

(b)            not all Claimants have the same Claims, or some Claimants do not have any Claim; and

(c)            it may not be in the interests of existing funded Claimants for further Claimants to be added to the proceedings (whether they are funded by the Funder or not).

 

2.23        To a degree, these issues are inherent in the conduct of multi-party cases and are part and parcel of receiving the benefits of conducting all Claims through one proceeding (particularly from the point of view of saving costs). These potential conflicts are addressed in the following ways:

 

(a)            the Litigation Funding Agreement provides for processes for dealing with proposed settlements; and

(b)            the Lawyers are to calculate the value of each Claim for the purposes of cost and settlement allocation.

 

2.24        All Claimants should understand that the Funder will act in its own interests in determining whether to enter into Litigation Funding Agreements with additional Claimants. It may be desirable for the Funder to do so in order to ensure that the funded litigation is viable to fund or to improve the prospects of the litigation settling.

 

Conclusion & Summary

 

3.1           ASIC requires that, in the event of a conflict between the Funder’s interests and a Claimant’s interests, the Funder must ensure that a Claimant’s interests are adequately protected.


3.2           The way in which the Funder addresses potential conflicts is set out above. In summary, the Funder seeks to ensure that each Claimant’s interests are adequately protected by:

 

(a)            recommending to each Claimant to seek independent advice on the Litigation Funding Agreement before signing it;

(b)            implementing this Policy;

(c)            appointing a senior officer of the Funder who is responsible for implementing, monitoring and managing this Policy. That senior officer is Kirk J. Wolden, whose contact details are: telephone – U.S. 916-567-1111; and email – info@regencyfunding.com.au;

(d)            seeking to identify actual or potential conflicts, disclosing them and seeking to resolve them in a timely manner in accordance with this Policy;

(e)            noting, in the Litigation Funding Agreement, that the professional and fiduciary duties owed to each Claimant by the Lawyers (being funded by the Funder to pursue the Claimant’s Claim) take precedence over any duties or obligations that those Lawyers may owe to the Funder;

(f)             informing each Claimant in the Litigation Funding Agreement of all amounts payable to the Funder and the Lawyers in relation to the Claimant’s funded Claims and where those payments will come from;

(g)            informing each Claimant of any important pre-existing relationships between the Funder and the Lawyers or any other person in the litigation;

(h)            providing each Claimant with a right to terminate the Litigation Funding Agreement if the Funder does not comply with that Agreement; and

(i)             ensuring that the Litigation Funding Agreement complies with the law on unjust and unfair contracts and unconscionability.