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Levitt Robinson Solicitors applauds the recent proposal by the Productivity Commission to introduce US-style “success-based” or “contingency” fees into litigation in Australia.

Contingency fees allow lawyers to take a percentage of any damages won on behalf of their clients in legal disputes.

The recommendation was included in the Commission’s report on access to justice, which was tabled in Federal Parliament on Wednesday.

Levitt Robinson has long campaigned for changes to the current litigation funding regime, in order to give everyday Australians greater access to our justice system.

The Productivity Commission reported that contingency fees could provide an incentive for lawyers to run cases efficiently and cost effectively.

The Commission added that contingency fees should be coupled with consumer protection measures, such as disclosure requirements and percentage limits, in order to prevent lawyers taking huge windfalls on high value claims,

According to the Australian Financial Review, defendant firms and their big end of town corporate clients oppose contingency fees on the basis they could lead to opportunistic legal claims and conflicts of interests.

Levitt Robinson’s Class Action Division head Stephanie Carmichael said that, “The Productivity Commission’s recommendation for the introduction of contingency fees is a welcome boost for claimants wishing to run and fund their own cases without recourse to litigation funding.”

Under the current system, litigation funders can take the lion’s share of settlement monies which are supposedly to compensate victims of wrongdoing.The introduction of contingency fees would be a victory for claimants wishing to band together to pursue their claims.”

Ms Carmichael added that, “The Commission’s recommendations would also incentivize plaintiff lawyers to prosecute worthy cases efficiently, by encouraging class action litigants to resolve their claims at an early stage using alternate dispute resolution.”

The Commission dismissed concerns that litigation funders were driving an increase in securities class actions and unmeritorious claims. Rather, the Commission determined that they promoted access to justice by providing finance for genuine claims by plaintiffs who could not otherwise afford them.