Litigation shills
Labor don’t represent organised labour anymore. They represent organised capital. By Jason Falinski.
The following is an edited transcript of remarks delivered by Jason Falinski MP in the Second Reading of The Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021.
The fact of the matter is that what [Labor] are doing is standing up for a group of people who have been making 500, 600, 700 per cent returns on equity and capital invested. It's not because they invested in a buy-now pay-later company, or Afterpay, or Atlassian, or they picked Microsoft or Amazon at the nadir and helped create value that helped millions of people around the world. No, they're making their money off the suffering and misery of their fellow Australians. They're hiding it in offshore tax havens.
It always amazes me that there are some journalists who can't help but say: 'You know, BHP, they don't play their fair share of tax. Rio Tinto, they don't pay their fair share of tax. Atlassian, they don't pay their fair share of tax.' But they don't mind covering up the fact that Maurice Blackburn has a litigation funder that operates out of Singapore, is incorporated in Ireland, operates a trust in the Netherlands and has an accountant and lawyer based in London. As the tax commissioner said, 'Well, that's like the triple bogey, isn't it?' That ticks all the boxes for tax evasion. They just left out Cyprus along the way. The bank account in Cyprus, that's what they left out.' But those same journalists so concerned about publicly listed companies that paid billions of dollars in tax in Australia have nothing to say about Maurice Blackburn. They'll have nothing to say about the indefensible defence and support that the Labor Party is providing to these shonks. They'll have nothing to say.
Maybe it's got something to do with the fact that on the day that Jill Hennessy, the Victorian Attorney-General — or the then-Victorian Labor Attorney-General — announced contingency fees, delivering a multimillion-dollar bonanza to these vultures of justice, she met with directors of Maurice Blackburn, according to her diary that she released, the very same day. Imagine: 'A coincidence, I tell you! Deirdre, imagine finding you here!' Clearly the meeting went very well because that very same day the directors clearly went back from the meeting with Jill Hennessy and decided to donate $100,000 to the Labor Party — mind you, not to the state Labor Party but to the federal Labor Party. That's a distinction that I'm sure most Australians understand is very important.
On that very day that the Victorian Government delivers a multimillion-dollar bonanza to these bottom feeders who make money off the suffering and misery of their fellow Australians, they turn around after a meeting with the Attorney-General and give the Labor Party $100,000. I just ask you, Deputy Speaker — there's no doubt you've heard about this story because it's been on the front page of the Sydney Morning Herald. If BHP, Rio Tinto, Atlassian, et cetera, had done something similar with this government, you wouldn't stop reading about it. There's not been a single story. Not once.
Why is the Australian media so afraid to tell the truth? They don't even have to make it up. It's all there in the public record. What are they so afraid of? We know what the Labor Party is afraid of. We know why they won't stand up for ordinary Australians. We know why they won't stand up for the hardworking men and women of this nation. It's because they are shills. They are fully captured shills of litigation funders, industry super and litigation lawyers. They don't represent organised labour anymore; they just represent organised capital. So they can come in here and they can accuse us of somehow trying to stop people from getting access to justice.
But I noticed one thing they haven't done. They haven't critiqued at any point the amount of money that litigation lawyers charge their clients. If they were so concerned about people having access to justice, you'd think that they'd be critiquing the $3 million or $4 million the partners at Slater and Gordon or Maurice Blackburn take home every year — and that, by the way, is after their donations to the Labor Party. You'd think they'd be more concerned about the 500 or 600 per cent that these litigation funders get in return on invested capital when they send them off to tax havens in Singapore, Cyprus, Gibraltar, Ireland and the Netherlands. They should send all of us a postcard every time they go there. You'd think they'd be concerned about that, but not a single time have I heard a member of the Labor Party and all the people that they rely on ever once say, 'Hey, guys; do you think it's a good idea that we're charging people who are going through suffering and misery $300, $600, $800 or $900 an hour?' That's what they charge them an hour so they can take home $3 million or $4 million in their pay packets.
The member for Kingsford Smith talks eloquently about the Trio disaster, and he is right and proper to talk about that, but I notice he ignores the Banksia case. The Banksia case is an incredibly interesting case. It's interesting because, in the middle of this, one of the favoured justices of the Federal Court signed off on a payout to the law firm which he understood to be 350 per cent of their return on invested capital. He thought that was a reasonable return. If the Commonwealth Bank lent money or issued a credit card where the interest rate was 350 percent, those opposite would be coming in here and calling on those executives to be sent to jail. But apparently it is okay to get returns on invested capital of over 500, 600 and 700 per cent and funnel them through a tax haven, as long as you donate to the Labor Party.
In the Banksia case, fortunately — well, unfortunately for him, but fortunately for us — one of the lawyers died. Before he died he didn't have the good sense to lock his BlackBerry. It was at that point that one of the plaintiffs in the class action who had complained and been worried about some of the charges that had been coming through was able to gain access to his emails — not the emails he had handed up to the court but emails that were secretly being passed between the funder and the lawyer on Gmail. They talked about what rubes they were representing, how no-one would notice how much money they were taking from them and how they could just put more and more charges through to ensure that they kept more of the payout. These are the types of people that the Labor Party are seeking to support.
The justice that oversaw that case has now literally banned four of some of Victoria's most prominent lawyers. If there is a justice system that needs a royal commission, it must be the Victorian justice system. It turns out that the QC who was involved in that case was the same QC that ASIC had been using to get corporate and legal advice from externally when they made decisions on these matters. That's the other big thing. The member for Curtin said, 'We on the committee were all shocked to find that the regulation was so light touch.' I think the member for Curtin, in one of the only examples I can think of, is guilty of understatement. It wasn't shock. It wasn't light touch. There were no regulations.
Up until September of last year — and those opposite tried to have this regulation, once again, disallowed — there were literally no regulations covering off the litigation funding sector in this country —none. The reason there were none is that the member opposite, when he was the Treasurer in the dying days of the Rudd government, moved an amendment to the Corporations Act to ensure that they were in fact exempt from it. Can you imagine if the Australian financial planners association donated $100,000 to the Liberal Party and then we came into this place and the Treasurer moved a piece of law and regulation through this chamber on that day that exempted them from the Corporations Act? Can you imagine what Australians would think of us? But, fortunately for those opposite, they don't have very much to worry about, because no-one in the media seems that concerned about it.
It could be that Michael West gave the game away when Senator Paterson asked him: 'We have all this evidence in front of us, Mr West, showing that all of these litigation funders are based overseas in what appear to be tax havens, but you don't seem very interested. In all of the work you do for Greenpeace, the Greens, the Labor Party and others, you don't seem to want to investigate these tax-haven-dwelling litigation funders. Is there a reason for that?'
To that, Michael West said: 'Oh, yes. I don't like criticising litigation funders and litigation lawyers, because they provide me with a lot of good material that I can use in my column.' So there you have it. The ecosystem of injustice that is present at the moment in this country that is stacked against people who genuinely need justice from our justice system is so great, so manifest, it makes Mount Everest look like a molehill. I say to this parliament, I say to this chamber, the question before us is a very simple one: do you believe that the justice system should be about justice, or do you believe that it is about providing profit to offshore tax-haven-dwelling litigation funders who are already charging those people suffering loss, suffering pain, hundreds and hundreds of per cent of interest that they are demanding for their return on invested capital?
The other thing, of course, that litigation funders are doing that this bill seeks to change is that it is undermining the very precepts of how our justice system is meant to work, because a lawyer has an obligation to the court and to their client, but, because of litigation funders, their client is no longer the plaintiff, is no longer that class seeking justice. It is, in fact, the funder. We have seen the Banksia case. The decision on the Banksia case used the word 'egregious' 18 times. Deputy Speaker, I don't know if you know that much about common parlance amongst lawyers and judges, but the word 'egregious' is used rarely and judiciously. For it to be used 18 times in one judgement I suspect is a new record. To have four senior lawyers on the Victorian bar given lifetime bans is pretty serious. That is what our current regulations have ended up providing, and those opposite wish to defend these people, wish to allow this to continue.
This is an edited transcript of remarks delivered by Jason Falinski MP in the Second Reading of The Corporations Amendment (Improving Outcomes for Litigation Funding Participants) Bill 2021.