AFEI Online Employers Adviser Article

 

Employees can be funded to litigate -- Employers likely

to face more claims

Published: 6 May 2015 

A new means of funding litigation is now available for employees.  AFEI Legal is aware of the emerging trend in matters it handles which has the potential to encourage disgruntled and/or former employees to institute legal proceedings.

While previously within the exclusive domain of class actions initiated against major corporations by larger plaintiff law firms, a growing number of litigation funders are setting up in Australia to provide financial support for applicants with lawyers claiming that the case has strong prospects.

AFEI Legal has certainly been able to witness first-hand how litigation funder activities are encouraging disgruntled employees (or former employees) to make claims against their employer in matters where, without funding, such litigation would not normally be expected.

A recent matter litigated at considerable cost to an employer client of AFEI Legal in both the Fair Work Commission and Federal Court was found, at the settlement stage, to be subject to litigation funding to the tune of $50,000.00. This litigation funding minimises the financial risk for applicants filing weak (and/or malicious) claims against employers, and may result in resistance to settlement offers which would otherwise be reasonable in the circumstances.

The lesson is for employers to be aware of the possibility of litigation funders to financially back former or disgruntled employees wanting to initiate action against them.

 

Any questions?
If you have any questions on the above article please contact AFEI Legal on 02 8088 4999.

 


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