The Australian Version of Contingency Fees

Australian does not permit lawyers to use contingency fees in class action and derivative litigation.  The Australian High Court has legitimized a new wrinkle however.   Companies, called "litigation funding companies," can purchase a share of a lawsuit, paying litigation expenses and lawyer's fees, in exchange for a percentage of the recovery (usually one-third to two-thirds).  Hedge funds, including some in the United States, back the funding companies.  We allow the limited assignment of some debt claims in the United States but do not allow full-scale claims sales by injured private plaintiffs.  The Australian experiment will be worth watching.