New regulations, which have been announced by Treasurer Josh Frydenberg, “bizarrely” define class actions as ‘managed investment schemes,’ could stymie the compensation payouts of millions of Australians who have been robbed by big banks, harmed by faulty products, or deceived by corporate boards, according to Class Actions Australia.
Frydenberg’s regulations, which wrapped those participating in class actions in “confusing and untested red tape”, were also seen as confusing by the Australian Securities and Investments Commission (ASIC).
Class Actions Australia spokesperson Ben Hardwick stressed that class actions were not ‘investment schemes’ and to suddenly define them as such makes zero sense unless your motive was to stymie class actions.
“A class action is a method through which ordinary Australians can seek justice when they’ve been hurt by a corporation. To suggest class action members are banding together in an investment scheme is insulting and incorrect. They are victims, not investors,” Hardwick said.
“Regulating a group of class action members as participants in an investment scheme will create all sorts of requirements that are suitable for investors, but ridiculous to require of victims.”
According to Class Actions Australia, which is also running the Keep Corporations Honest campaign in defense of ordinary class action members, Frydenberg announced his intention to introduce the new regulations just days after meeting with the US Chamber of Commerce, which had been lobbying to limit Australian class actions that affect its multinational members, like Johnson & Johnson.
“I don’t know what Mr Frydenberg’s discussed in his private meeting with the US Chamber of Commerce, but if you were an American multinational worried about Australian class actions this is exactly the kind of reform you would want to see,” Hardwick added.
“The outcome of this regulation will be to make it harder for everyday Australians who have been harmed to get funding for a class action, meaning fewer class actions and less justice. It will mean corporations face fewer consequences for bad behavior, making them more likely to try and get away with wrongdoing.”
