Australia has swung between two regulatory poles on litigation funding for over a decade. In 2009, the Federal Court's decision in Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd held that litigation funders fell under Australia's existing regulatory regime for managed investment schemes, a significant compliance burden. Successive governments then passed legislation moving the industry in and out of that regime as political control changed.
The Federal Court effectively overruled its own Brookfield position in 2022, but that shift has itself become politically contested: opposition proposals as of 2026 seek to restore the pre-2022 position subjecting funders to financial services regulation, alongside new proposed caps on recoverable funder fees and mandatory disclosure of the investors behind litigation funding schemes, partly motivated by concerns about foreign actors using funding structures to pursue strategic litigation.
Australia's back-and-forth is a useful cautionary case for any jurisdiction considering how to regulate litigation finance: the industry has now operated under at least three materially different Australian regulatory regimes since 2009, each shift carrying real transition costs for funders, claimants, and the courts overseeing funded matters.