Concerns of ‘foreign influence’ in Australian class actions

The Liberal Party-connected Menzies Research Institute said it found four cases of firms linked to class action lawsuits having previously publicly acknowledged they had received funding from sovereign wealth funds, raising concerns about foreign influence.

Foreign actors have been involved in legal class actions here in Australia. Picture: AAP

At least four class action litigation funders working in Australia have been partly backed by sovereign wealth funds – often of unknown origin – leading the Coalition to accuse the Albanese government of a “shocking abrogation” and raise concerns about foreign influence.

The Liberal Party-connected Menzies Research Institute said it found four cases of firms linked to class action lawsuits having previously publicly acknowledged they had received funding from sovereign wealth funds.

The think tank also commissioned polling from Resolve Strategic that found just 16 per cent of Australians thought foreign investment in class actions was an “appropriate” model. The polling found 68 per cent of Australians thought there should be regulatory oversight of the behaviour and 76 per cent agreed it should be “a requirement to disclose who is funding a class action”.

Opposition legal affairs spokeswoman Michaelia Cash accused Labor of “actively refusing to impose even the most basic transparency measures, so that we don’t even know the scale of the problem”.

“Why wouldn’t we want to know if foreign governments are using our court system against us?” Senator Cash asked.

“Australians know that class action litigation can be weaponised to block major projects and damage our economy, but many would be shocked to find out that this type of lawfare is being funded to serve foreign interests.

“Labor’s refusal to act is a shocking abrogation of the duty to put Australians first.

“Anthony Albanese should explain why Labor’s class action donor mates should be protected from the scrutiny of the Australian people.”

Attorney-General Mark Dre­y­fus was contacted for comment.

Menzies Research Centre executive director David Hughes said Australia’s “lack of regulation of litigation funders leaves our court system – and our biggest businesses – wide open to ­foreign influence”.

The think tank and the Liberal Party have often warned about class action lawsuits and what they perceive as loose regulation.

Mr Hughes pointed to several firms related to class actions and sovereign wealth fund connections they had previously acknowledged. For example, Therium – which has funded class actions against PWC and Commonwealth Bank – said in 2019 that it had received £325m from “three global institutional investors, including a sovereign wealth fund, to finance litigation and arbitration globally”.

Pogust Goodhead, which is spearheading a $70bn class action against BHP – which has an office in Sydney and previously signalled it was looking to enter the local class action market – in the past received a $US500m loan from Gramercy Funds Management, which in turn says on its website that 9 per cent of its clients were sovereign wealth funds.