Hino Class Action Ruling Raises Stakes for Litigation Funding Model

The Supreme Court of Victoria has reduced Maurice Blackburn’s fee entitlement from the $87 million Hino Motors diesel emissions settlement, in a decision closely watched by funders and investors in Australia’s maturing class action market.

Justice Delany ruled on Sept. 4 that the Melbourne firm could collect 17.4% of the settlement, or about A$15.1 million, down from the 24.7% (A$21.45 million) set under its group costs order (GCO). The settlement was reached unusually early—before discovery and with only a third of the projected budget spent—leading to what the Court described as a disproportionate return relative to risk.

Crucially for the litigation finance industry, the Court’s reasoning relied heavily on ROI and IRR analysis, metrics more familiar to funders’ investment committees than to judges. Justice Delany compared Maurice Blackburn’s projected returns with Omni Bridgeway’s reported portfolio benchmarks, underscoring that funder-style financial analysis is becoming part of judicial scrutiny.

Introduced in 2020, Victoria’s GCO regime allows law firms to effectively act as their own funders, bearing adverse costs risk in exchange for a court-approved percentage of recoveries. The Hino ruling shows that courts are willing to revisit those percentages post-settlement if the economics tip too far toward windfall territory.

For litigation funders, the decision is significant on two fronts: it confirms that judges will interrogate funding returns using the same investment metrics funders rely on internally, and it signals that early settlements may trigger judicial pressure to trim commissions. Investors considering exposure to Australia’s class action market will need to model not only case risk but also the risk of judicial haircut on returns.