Date issued: 21 August 2020
Section 258 of the Legal Profession Uniform Law prohibits law practices in NSW and Victoria from engaging in certain activities in relation to 'managed investment schemes', as defined in the Corporations Act 2001 (Cth).
The Corporations Amendment (Litigation Funding) Regulation 2020 (Cth) has the effect that litigation funding schemes created on or after 22 August 2020 are no longer excluded from the statutory definition of managed investment schemes.
The Legal Services Council has made an urgent amendment to the Legal Profession Uniform General Rules 2015 to ensure that law practices in NSW and Victoria do not contravene s 258 by:
The Legal Profession Uniform General Amendment (Litigation Funding Schemes) Rule 2020 commences on 22 August 2020 and ceases to have effect on 22 August 2021. The Council will undertake a public consultation before making an ongoing rule in relation to this issue.
The Council has asked designated local regulatory authorities to adopt a 'no action' position in relation to rule 41 of the Legal Profession Uniform Law Australian Solicitors Conduct Rules 2015.