Australian funding arrangements no longer considered managed investment schemes

The Full Court of Australia has ruled that litigation funding arrangements should not be considered managed investment schemes.

In a judgment dated 16 June 2022, the Full Court of Australia has sided with LCM in its appeal of the decision of the primary judge in Stanwell Corporation Limited v LCM Funding Pty Ltd. As a result, litigation funding arrangements in Australia will no longer be considered managed investment schemes, and litigation funders will be relieved from the burden of a “legislative and regulatory regime characterised by uncertainty, inconvenience and the potential for mischief by class action respondents.”