Landmark Decision For Clyde & Co's Clients: Queensland Fisheries Participants

Overview

Today, the Supreme Court of Queensland handed down an important interlocutory decision in Murphy Operator & Ors v Gladstone Ports Corporation & Anor (No.4) [2019] QSC 228. The much-anticipated decision is critical to the operation of the class actions regime in Queensland. It concerns funding agreements between a litigation funder and plaintiffs, and in particular whether such agreements are unenforceable by reason of maintenance and champerty, or by reason of being contrary to public policy. The Court held that the funding agreements were not unenforceable.

The decision was made in the context of representative proceedings brought by fishing and processing businesses in Gladstone (Plaintiffs) against the Gladstone Ports Corporation (GPC) for the collapse of the fishing industry following GPC's controversial Gladstone Port expansion project in 2011. The class action is being funded by litigation funder Litigation Capital Management (LCM).

Maintenance & Champerty

The doctrines of maintenance and champerty which were reflected in Imperial statutes as long ago as the 13th century, significantly restricted the circumstances in which third parties could support and share in the proceeds of litigation. They operated variously as crimes, as torts enabling a party to litigation to sue a non-party for costs, and a basis on which a court would decline to enforce contractual rights. Whilst traditionally serving as a mechanism to regulate abuse of the Court's process, the evolving powers and jurisdiction of the Courts has resulted in a very different juridical environment, such that many have questioned their continuing relevance.

Indeed, as crimes and torts maintenance and champerty were abolished by statute in the UK,1 NSW,2 South Australia3 and Victoria.4 However, when Queensland introduced its representative proceedings regime in 2016 by way of Part 13A of the Civil Proceedings Act 2011 (Qld) ('CPA'), it did not implement a similar legislative repeal of the torts by way of statute.

As a result, for the first time the continued operation of maintenance and champerty in the context of the representative proceedings legislation has been brought in to question before the Queensland Supreme Court.

The Application

The Plaintiffs applied for declarations that the funding agreements in this case were not unenforceable by reason of maintenance or champerty, or by reason of being otherwise contrary to public policy. LCM was joined as a respondent...