ABSTRACT
Like the US, Australia has implemented an entrepreneurial class action regime where the identication and aggregation of claims and their subsequent prosecution is guided by the prot motives of class action law rms and, in a signicant number of cases, by third-party investors.1 This entrepreneurial regime supplements other existing systems for collective redress such as dispute resolution schemes,2 and regulatory enforcement incorporating class wide compensation undertakings.3 It is distinguishable from the latter more publicly oriented schemes not only because it is underpinned by prot maximisation but also because, like any entrepreneurial venture, the law rm and funder proactively identify, develop and control the exploitation of litigation investment opportunities and their concomitant risks. In the class action context, the law rm and funder are no longer simply gatekeepers to legal institutions, facilitators of value-enhancing transactions or providers of legal solutions to client-generated concerns. They are the instigators and drivers of a valuable investment opportunity. Australia’s entrepreneurial form of collective redress is justi-ed on the basis that it strengthens public law enforcement initiatives, and provides better compensation and stronger deterrence of wrongdoing than reliance upon communitarian mechanisms alone.4 More importantly, the incentives provided by the entrepreneurial class action to law rms and funders help to full the fundamental prerequisite of sufcient capital to address the scale and cost of class actions.
