Further highlighting the idiocy of this legislation is that it is opposed by leading class action defendant lawyers from Herbert Smith Freehills. So the people who represent the big end of town are saying this is bad law. Superficially it sounds nice: the government is professing concern to get more money out of the judgements to go to victims, instead of those nasty old lawyers charging too much and the greedy litigation funders about which we heard in the previous unhinged rants.
So what are litigation funders? We heard that they are bottom feeders and people who make money from human misery. They're private businesses that fund the cost of big lawsuits. That's what they do: they assess the risks and they offer to fund litigation. If the case is successful, they get a percentage return. If they lose, they pay all the legal costs, possibly the other side's costs, and victims pay nothing. That's what they do.
The government pretends to be concerned that litigation funders take too much. In some instances, yes, but you've got two competing objectives. The policy question is: how do we maximise the return to victims and maximise access to justice while driving down legal costs and litigation costs and funding costs? You've got to try and do those together.
The answer, clearly, is competition. That's what the ALRC has said. That's what every sensible expert has said. That's what the evidence and experience show. If you get competition, you drive down funding costs, and that's what we've seen in the last few years. New entrants come to Australia—they're all evil and overseas according to the previous speaker. They're businesses prepared to lend and take risks. They come to Australia, and we've seen the average cost of funding already decrease in the last few years from about 30 per cent down to close to 20 per cent. Competition is working.
What's the government's response? A rebuttable presumption is they say it will cap returns to litigation funders and lawyers at 30 per cent. The sting in that is that that includes the legal fees. It means that victims pursuing justice would have their legal fees effectively capped by the government. Victims couldn't hire the best QCs. They'd be down the road looking for cheaper lawyers like Dennis Denuto—although, poor Dennis Denuto did actually do a reasonable job in the movie.
But big corporations would have no limit on the amount they could spend on their lawyers. They could have the top QCs. They could bleed the victims dry by playing games in the court, and that's exactly what would happen. That's what all the lawyers told us would happen. It's what any basic sense of economic principles tells you would happen, and it won't be a fair fight. The evidence we heard in the committee was absolutely clear: this 70-30 notional formula will drive up litigation costs. It will discourage plaintiffs from settling, providing perverse incentives for litigations to just roll on and on.
It will make the law 'worse for everyone,' said John Emmerig QC, of the Law Council of Australia. It will raise the risks for funders. There would be fewer dollars around for many meritorious claims where people have been harmed, and the costs for all claims are likely to be higher. That's the evidence which the committee received all day, with a couple of exceptions.
With the new rules about sign ups—this is astounding—everyone admitted that there would be an increase in the number of lawsuits lodged because there would be multiple closed class actions, so the big companies that the government is trying to help would actually have them subjected to more lawsuits. That's why even the top end of town lawyers who help the big corporations have said this is a stupid idea. They cannot even help their mates properly—face palm emoji, if we could insert that into Hansard.
So let's be clear: to deal with the costs, this government, the free marketeers over there, are choosing regulation, not competition—Soviet style price caps, as one of the submitters said. So much for market forces! The hypocrisy is astounding coming from this mob of free enterprise.
The rush process was also a clue. Even the Financial Review—you know, that left-wing socialist rag—published an article yesterday analysing the whole thing, saying that this is rushed and should not proceed. The members of the public were given one week—less than one week actually; it was four working days when you take out the public holiday across most of the country—to comment on the exposure draft. The government ignored the feedback and introduced the bill pretty much the same. The government controlled committee had three weeks. The public had seven days to put in their submissions. There was one public hearing, two business days to get back to us, and the only people who didn't get back to us were the government's own departments, who didn't meet the time lines. If only the government felt the same sense of urgency about—I don't know—responding to the banking royal commission or
[An honourable member interjecting]
Yes, the federal ICAC. Whatever happened to the corruption commission? Anyone? We still have no corruption commission. It's been over three years, 1,000 days. There's no urgency about that. Yet this bill to deny access to justice to millions of Australians is suddenly the most urgent thing on the agenda and we've got to shove it through before the election.
The inquiry showed the bill is a deeply flawed bill in every respect. The overwhelming evidence, even from the people who support some of the propositions, is that it's badly drafted. The report, frankly, is pathetic. To be fair, it's probably the best you can do in a few days; I feel for the secretariat! Labor members had less than 24 hours to respond to the report and deal with it on this most complex of issues.
The government struggled to find anyone to submit in support of the bill. The Australian Industry Group loyally turned up—I suppose they had to!—and said some stuff, but they couldn't really engage in the detail. The Business Council hadn't put in a submission when they appeared, and they couldn't engage in the detail. The poor AICD didn't put in a submission; they seemed almost embarrassed to be there. To their credit they put in a supplementary submission after the hearing reversing their position on some aspects, which was good.
The funniest moment, the moment of levity, was the Rule of Law Institute. They had no submission but they turned up; the government invited them. They had no ability to engage in the bill; it was kind of the vibe of the thing. The presenter had no expertise. He was unwilling or unable to engage in any substantive discussion. I asked whether I could join the Rule of Law Institute, because I like the rule of law, and they said, 'No, it's not a membership organisation.' They wouldn't tell us who funded it. But they love to write op-eds in right-wing newspapers. They were later accused of misstatements by other submitters who listened to their evidence. But the government, in their wisdom, are relying on their evidence in this report to back in this bill.
We also had Stuart Clark QC, who paraded himself around on paper as the former president of the Law Council and an adjunct professor at Macquarie University. He didn't turn up, which was a pity because we had some good questions for him like, 'Did you plagiarise your evidence?', because, mysteriously, the evidence he had put in was identical to the submission from the United States Chamber of Commerce on the exposure draft—just a Deidre Chambers style coincidence, no doubt! It was sad that he didn't appear, although last time he appeared I don't think he had a great experience; I think he had to register as an agent of foreign influence in the end, just to be prudent.
I want to make some very serious remarks on the constitutionality of the bill. There are serious doubts as to whether we can even pass this bill. Let that sink in.
The former Solicitor-General of the Commonwealth gave compelling evidence that this bill is not constitutional. Justin Gleeson SC said there were serious concerns about whether the corporations power in the Constitution or the referral powers to the Commonwealth support the provisions we're now being asked to vote on, whether the provisions would amount to an inconsistency with state class action provisions so as to override them pursuant to section 109 of the Constitution, and whether there were potential issues arising in respect of overriding the power of state courts or directing state legislatures.
Despite this, the explanatory memorandum from the geniuses over there, the government, doesn't mention constitutionality at all—not a word. We spent an hour or more grilling the Attorney-General's Department—nothing. They could not rebut one single proposition from the former Solicitor-General. Nothing—absolutely nothing.
I can't go into what we discussed at the committee, but let's just say that I'm confident there are members of the government who share these concerns and that this is not the end of the constitutionality question. As everyone from the legal profession said clearly, if this bill goes through it will tie up the profession in years of litigation in the High Court to pull this legislation to bits, because everyone knows large swathes of it are not constitutional.
This all sounds very esoteric, but in the real world it means that, if these laws are passed, numerous cases where victims in Australia have suffered harm and have a meritorious case will not proceed in the future.
This is best illustrated by examples of recent cases that could not or would not have proceeded had these laws been in place. I will give you five.
There is the Domino's Pizza case; a class action by delivery drivers and in-store workers about underpayment of their wages could not have proceeded under these laws.
There is the stolen wages case for Indigenous Australians; the reason it couldn't have proceeded under this regime is that it's one of the most complex of cases. It's expensive to fight. You can't just go out to remote Aboriginal Australia and sign up defendants all over the country. You need the open class action system to get justice for vulnerable people.
The big banks, like Westpac, allegedly overcharged their life insurance customers; that class action couldn't proceed under these rules.
There is the case against the Commonwealth Department of Defence for contamination of Army land in Queensland. There is the robodebt case. There is a long list.
There is a lot to say on this, but I recommend the government's own report recommending a change to the bill. I don't think it can pass the House in its current form. They should withdraw the bill or at the very least send it to a Senate inquiry.