Commonwealth Consolidated Regulations Commonwealth Consolidated Regulations(1) This regulation is made for the purposes of paragraph (n) of the definition of managed investment scheme in section 9 of the Act.
(2) An approved benefit fund (within the meaning of subsection 16B(1) of the Life Insurance Act 1995 ) is declared not to be a managed investment scheme.
(2A) A scheme (a litigation funding scheme ) that has all of the following features is declared not to be a managed investment scheme:
(a) 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;
(b) the possible entitlement of each of its general members to remedies arises out of:
(i) the same, similar or related transactions or circumstances that give rise to a common issue of law or fact; or
(ii) different transactions or circumstances but the claims of the general members can be appropriately dealt with together;
(c) 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;
(d) the steps taken to seek remedies for each of its general members include a lawyer providing services in relation to:
(i) making a demand for payment in relation to a claim; or
(ii) lodging a proof of debt; or
(iii) commencing or undertaking legal proceedings; or
(iv) investigating a potential or actual claim; or
(v) negotiating a settlement of a claim; or
(vi) administering a deed of settlement or scheme of settlement relating to a claim;
(e) 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;
(f) 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.
(3) A scheme (a litigation funding scheme ) that has all of the following features is declared not to be a managed investment scheme:
(a) the scheme relates to a Chapter 5 body corporate;
(b) the creditors or members of the body corporate provide funds (including through a trust), indemnities or both to the body corporate or external administrator;
(c) the funds, indemnities or both enable the external administrator or the body corporate to:
(i) conduct investigations; or
(ii) seek or enforce a remedy against a third party; or
(iii) 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).
(4) An arrangement (a litigation funding arrangement ) that has all of the following features is declared not to be a managed investment scheme:
(a) the dominant purpose of the arrangement is proving claims made by a general member who is an 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);
(b) the steps taken under the arrangement include a lawyer providing services in relation to:
(i) making a demand for payment in relation to a claim; or
(ii) lodging a proof of debt; or
(iii) commencing or undertaking legal proceedings; or
(iv) investigating a potential or actual claim; or
(v) negotiating a settlement of a claim; or
(vi) administering a deed of settlement or scheme of settlement relating to a claim;
(c) 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 proving claims) to enable the general member to prove the claims;
(d) 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;
(e) the arrangement is not a litigation funding scheme.
(5) An arrangement (a litigation funding arrangement ) that has all of the following features is declared not to be a managed investment scheme:
(a) the dominant purpose of the arrangement is for a general member to seek remedies to which the general member may be legally entitled;
(b) the steps taken to seek remedies include a lawyer providing services in relation to:
(i) making a demand for payment in relation to a claim; or
(ii) lodging a proof of debt; or
(iii) commencing or undertaking legal proceedings; or
(iv) investigating a potential or actual claim; or
(v) negotiating a settlement of a claim; or
(vi) administering a deed of settlement or scheme of settlement relating to a claim;
(c) 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 to seek remedies;
(d) 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;
(e) the arrangement is not a litigation funding scheme.
"external administrator" includes an administrator, a liquidator (including a provisional liquidator) and a controller.
(a) in relation to a litigation funding scheme--means a member of the scheme who:
(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:
(ii) is not a lawyer providing services for the purposes of the
arrangement.