There are a number of reasons why group members may wish to consider signing a Funding Agreement even where the claim will be filed on an ‘open’ basis.
First, the initial trial in a class action will usually only determine the Representative’s claim and the common issues. Issues specific to your individual claims, such as whether you suffered loss and the value of the loss, will not be determined in the initial trial. It may be that further steps will then need to be taken in order to pursue your individual damages. This could include a court hearing at which your individual damages are determined. By signing a Funding Agreement, you will secure Omni Bridgeway’s funding at the agreed commission rates that cover not only the initial trial in the class action, but also any additional steps that may be needed to advance your individual claims. You will also be protected from any adverse costs orders that may be made against you in taking these additional steps.
Second, by signing a Funding Agreement you will be kept apprised of developments in the class action and be able to ask questions of Omni Bridgeway Limited and the Lawyers as a client.
Third, there will likely be a formal Court-ordered process whereby group members will need to register in the class action. If you have signed a Funding Agreement, Omni Bridgeway Limited will take steps to ensure you are automatically registered and that no further independent steps are required on the part of its clients.
Fourth, as it is proposed that the claim will be filed on an ‘open’ basis the Representative may ask the Court for a ‘common fund’ order. A common fund order is an order made by the Court requiring all group members to contribute to the costs of funding the proceeding on a fair basis, including those who have not signed a Funding Agreement. If the Court is minded to make a common fund order in this case, Omni Bridgeway intends to submit that the funding rate that the Court should apply to the unfunded group members be the same as the rate in the Funding Agreement. The Court will set a rate (which may be different to the rate in the Funding Agreement) that will apply consistently to all group members. Under the Funding Agreement, where the Court makes a common fund order and sets a rate which is different to the rate in the Funding Agreement, the lower of the rate provided in the Funding Agreement and the rate set by the Court will apply to members of the group who have signed a Funding Agreement. In these circumstances, you will not be financially worse off for having signed a Funding Agreement with Omni Bridgeway.
In addition, if the Court is not minded to make a common fund order, the Court may make a “funding equalisation order” in relation to the distribution of any settlement sum. The effect of a funding equalisation order is to equalise the recovery that funded and unfunded group members receive in the hand, taking into account the fact that funded group members will be required to pay a commission to Omni Bridgeway. A funding equalisation order would mean that the return of unfunded group members would be reduced by the amount they would have paid had they signed a funding agreement to ensure that unfunded group members receive the same proportionate net outcome.
Finally, by signing a Funding Agreement with Omni Bridgeway you are also demonstrating support for the Omni Bridgeway-funded proceeding.
We believe that our proven track record in funding matters of this type, the demonstrable financial strength of the Omni Bridgeway group and the experience of Baker McKenzie means that this class action will be an effective vehicle for Medibank policyholders to pursue their claims. Competing proceedings may mean legal and other costs to policyholders are higher than they need to be and may complicate any settlement discussions.