The U.S. Chamber of Commerce has been accused of interfering in Australia's political processes and taking advantage of the COVID-19 crisis by seeking to "water down" the rights of citizens to undertake class actions.

The Institute for Legal Reform (ILR), an affiliate of the U.S. Chamber of Commerce, has argued for tighter regulation of litigation funders in representations to Australian politicians and in a submission to the Australian Parliament's current inquiry into class actions, sparking outrage from some Australian law firms and litigation funders

"The unprecedented interference of the powerful and notorious U.S. Chamber of Commerce in the Australian political process should be rejected by all parliamentarians," Australian plaintiffs law firm Slater and Gordon said in a statement.

Australia has become a key target for the United States-led campaign after class action wins against several corporations, including a victory against U.S.-based pharmaceutical giant Johnson & Johnson for faulty pelvic mesh implants, the firm said.

"The American political system is in tatters precisely because of big money corporate interference from the likes of the U.S. Chamber of Commerce working against the interests of ordinary people. Australian MPs should reject this American interference out of hand," head of class actions at Slater and Gordon Ben Hardwick said in a statement.

But ILR's representative in Australia, Stuart Clark, said it was "rank hypocrisy to suggest one organization should be criticized for expressing opinions on a subject which is of significant global importance" when several litigation funders in the Australia market are also foreign-owned and have made submissions to the class action inquiry.

In its submission to Parliament's Litigation funding and the regulation of the class action industry inquiry, the ILR said its members have a direct interest in how litigation is conducted in Australia, as many carry on business in Australia or trade with Australians.

It says Australia's class action regime is more plaintiff-friendly than the United States' and is "the most profitable litigation funding market in the world."

The ILR wants more transparency from litigation funders on their source of funds, their profitability and their ability to satisfy all their liabilities, and for funders to be licensed. It also argues against the introduction of contingency fee arrangements in Australia.

"Litigation funders should be subject to a best interests requirement like a mortgage broker and like a lawyer, and that says that if there's a conflict of interest between the fund and the client, the client's interests should be preferred," said Clark. "That is hardly taking away the rights of individual litigants to sue."

The Australian Parliament's inquiry into litigation funding and class actions is examining the impact of class actions on the economy and vulnerable businesses already suffering the impact of the COVID-19 pandemic.

The inquiry comes after calls by business leaders and business groups fro the regulation of litigation funding and class actions amid claims businesses are being unfairly targeted. It is also considering whether litigation funders are earning excessive fees and should be more tightly regulated.

Australian litigation funder Omni Bridgeway said the U.S. Chamber of Commerce "has engaged in a long-running campaign of self-interest on behalf of large multi-national corporations who want to end class actions."

"The U.S. Chamber of Commerce has cynically sought to take advantage of the current pandemic crisis to push their agenda," CEO Andrew Saker said.

Omni Bridgeway does support the licensing regime for litigation funders as proposed by the Australian government and said it should include minimum onshore capital adequacy requirements, disclosure obligations and conflicts-management requirements.

But Saker said the U.S. Chamber of Commerce is attempting to remove an essential access-to-justice avenue for ordinary Australians. "The interests of those Australians need to take priority over the lobby group for U.S. big business," he said.

Clark, who is a former class action defense partner at Australian corporate firm Clayton Utz, a former president of the Law Council of Australia and a current adjunct professor of law at Sydney's Macquarie University, said his role in representing the ILR was well-known and he had made several public submissions on class action law reform over the past few years.

He rejected Slater and Gordon's assertion that the ILR is spending "millions of dollars" lobbying the Australian government and rejected the firm's call for him to reveal how much the ILR is paying him.

"I am a lawyer who has been retained by a client, and as Slater and Gordon well know, that is a matter between me and my client. And when they see fit to disclose how much their clients pay them I might consider it," he said.

"It's outrageous that Slater and Gordon should resort to this sort of attack on another lawyer simply to protect the financial interests and avoid the public scrutiny that would come through a proper regulatory and licensing regime."

Maurice Blackburn, another plaintiffs law firm, also expressed concern about the role of the ILR in Australia.

"We have long believed the U.S. Chamber of Commerce was running a campaign from behind the scenes using local proxies to undermine the legal rights of everyday Australians. What is disappointing is how easily it has been able to enlist Liberal politicians and use local media to further its agenda and undermine Australians' rights," the firm said.

"It should be of great concern to all Australians that so many of the critics of class actions have failed for years to declare that they are puppets of the USCC."

However, not all plaintiffs firms were opposed to ILR carrying out lobbying activities in Australia, even if they did not endorse their aim.

"I don't think it hurts for us to hear the views and opinions of a range of stakeholders. What is important is that the views and opinions expressed are balanced, reasoned and reflective of the facts," said Jan Saddler, head of litigation and loss recovery at Shine Lawyers.

But Saddler said the USCC is opposed to any form of class action practice.

"This is consistent with the mandate of their members to protect their corporate interests at the expense of the interests and rights of individuals. None of this is surprising and frankly is what I expected we would receive from the USCC and the ILR," she said.

She added that the ILR is calling for a greater degree of transparency from litigation funders that far exceeds anything any of the USCC's own members would likely support. "It seems that they are effectively suggesting that the litigation funding sector be subjected to corporate transparency requirements that no other sector would be subjected to for reasons that are unsubstantiated and are not supported by the reality of the class actions legal practice in Australia," she said.

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