Commonwealth Consolidated Regulations

[Index] [Table] [Search] [Search this Regulation] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

CORPORATIONS REGULATIONS 2001 - REG 5C.11.01

Certain schemes not managed investment schemes

             (1)  For paragraph (n) of the definition of managed investment scheme in section 9 of the Act, each of the following schemes is declared not to be a managed investment scheme:

                     (a)  an approved benefit fund within the meaning given by subsection 16B (1) of the Life Insurance Act 1995 ;

                     (b)  a scheme (a litigation funding scheme ) that has all of the following features:

                              (i)  the dominant purpose of the scheme is for each of its general members to seek remedies to which the general member may be legally entitled;

                             (ii)  the possible entitlement of each of its general members to remedies arises out of:

                                        (A)  the same, similar or related transactions or circumstances that give rise to a common issue of law or fact; or

                                        (B)  different transactions or circumstances but the claims of the general members can be appropriately dealt with together;

                            (iii)  the possible entitlement of each of its general members to remedies relates to transactions or circumstances that occurred before or after the first funding agreement (dealing with any issue of interests in the scheme) is finalised;

                            (iv)  the steps taken to seek remedies for each of its general members include a lawyer providing services in relation to:

                                        (A)  making a demand for payment in relation to a claim; or

                                        (B)  lodging a proof of debt; or

                                        (C)  commencing or undertaking legal proceedings; or

                                        (D)  investigating a potential or actual claim; or

                                         (E)  negotiating a settlement of a claim; or

                                         (F)  administering a deed of settlement or scheme of settlement relating to a claim;

                             (v)  a person (the funder ) provides funds, indemnities or both under a funding agreement (including an agreement under which no fee is payable to the funder or lawyer if the scheme is not successful in seeking remedies) to enable the general members of the scheme to seek remedies;

                            (vi)  the funder is not a lawyer or legal practice that provides a service for which some or all of the fees, disbursements or both are payable only on success;

                     (c)  a scheme (a litigation funding scheme ) that has all of the following features:

                              (i)  the scheme relates to a Chapter 5 body corporate;

                             (ii)  the creditors or members of the body corporate provide funds (including through a trust), indemnities or both to the body corporate or external administrator;

                            (iii)  the funds, indemnities or both enable the external administrator or the body corporate to:

                                        (A)  conduct investigations; or

                                        (B)  seek or enforce a remedy against a third party; or

                                        (C)  defend proceedings brought against the body corporate in relation to the external administration of the body corporate (other than in relation to allegations, made by creditors or members of the body corporate, of negligence or non-performance of duties by the external administrator);

                     (d)  an arrangement (a litigation funding arrangement ) that has all of the following features:

                              (i)  the dominant purpose of the arrangement is:

                                        (A)  for a general member to seek remedies to which the general member may be legally entitled; or

                                        (B)  proving claims made by one individual under Division 6 of Part 5.6 of the Act (which may include the funding of the preparation and the lodgement of the proofs);

                             (ii)  the steps taken to seek remedies include a lawyer providing services in relation to:

                                        (A)  making a demand for payment in relation to a claim; or

                                        (B)  lodging a proof of debt; or

                                        (C)  commencing or undertaking legal proceedings; or

                                        (D)  investigating a potential or actual claim; or

                                         (E)  negotiating a settlement of a claim; or

                                         (F)  administering a deed of settlement or scheme of settlement relating to a claim;

                            (iii)  a person (the funder ) provides funds, indemnities or both under a funding agreement (including an agreement under which no fee is payable to the funder or lawyer if the arrangement is not successful in seeking remedies) to enable the general member of the arrangement to seek remedies;

                            (iv)  the funder is not a lawyer or legal practice that provides a service for which some or all of the fees, disbursements or both are payable only on success;

                             (v)  the arrangement is not a litigation funding scheme.

             (2)  In this regulation:

"external administrator " includes an administrator, a liquidator (including a provisional liquidator) and a controller.

"general member " :

                     (a)  in relation to a litigation funding scheme--means a member of the scheme who:

                              (i)  is not the funder; and

                             (ii)  is not a lawyer providing services for the purposes of the scheme; and

                     (b)  in relation to a litigation funding arrangement--means the party to the arrangement who:

                              (i)  is not the funder; and

                             (ii)  is not a lawyer providing services for the purposes of the arrangement.



AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback