"Law firms and investors making millions from class actions while victims get just thousands", 4 August 2025

For Minnie McDonald, the class action represented hope — justice after decades of unpaid work.

The lawsuit was supposed to right a wrong, provide compensation for thousands of Aboriginal workers who received little or no money for their labour.

Instead, some Aboriginal workers and their families will end up with payouts as little as $10,000, while the law firm and its financial backers have pocketed tens of millions.

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On average, at least one class action is launched every week against banks, governments, and big corporations in Australia.

But the stolen wages case raises questions about whether class actions are delivering justice for ordinary Australians or are simply money-making exercises for lawyers and investors.

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Class actions are hugely expensive, but a law change in Australia almost 20 years ago transformed them into a form of investment where "litigation funders" provide the capital.

These dedicated companies team up with lawyers to finance the legal costs of a class action in return for a slice of any payout. When they are successful, funders can more than double or triple their money.

However, if they lose, the funders lose their investment and have to pay the other side's costs.

The chairman of the Association of Litigation Funders of Australia, John Walker, says they don't see it as gambling.

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This business model was how legal firm Shine Lawyers was able to launch class actions in NT and WA to recoup stolen wages, after securing the backing of Litigation Lending Services [...].

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Shine Lawyers will receive more than $41 million in approved costs for its work in both cases, while Litigation Lending Services will take a commission of up to $57 million.

The exact amount that Aboriginal workers will receive is unclear because the final number of eligible recipients is not known.

Based on court documents, Four Corners estimates the workers will get between $10,000 and $14,000. If those workers have died, the amount will be divided among their families.

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Shine Lawyers did not want to do an interview with Four Corners.

It said in a statement that governments ignored "the stories of indigenous workers who were denied fair wages. Shine Lawyers gave Aboriginal workers "the chance to tell their stories, receive compensation and be acknowledged … for the historical injustices they suffered".

When asked about Minnie and Mervyn's inability to read and write, and their capacity to understand legal and financial issues, Shine said: "We are confused that the ABC would suggest that illiteracy implies a lack of intelligence".

"This is an unacceptable proposition."

Shine said it was not appropriate to comment on "the way in which we provided advice … as these are privileged communications".

"We can confirm, however, that both clients received independent legal advice" and that "Shine Lawyers used Aboriginal barristers to bridge communication and cultural barriers".

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The stolen wages cases have highlighted concerns about the business model underpinning class actions in Australia and the amounts being taken away by funders and lawyers.

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The funder of the stolen wages cases, Litigation Lending Services, bankrolled another action in Queensland.

They are set to make up to $95 million in commission from all three cases, which equates to a 250 per cent return on their investment.

The funder, Litigation Lending Services said "the real injustice" is how "government fought these claims fiercely, with considerable public resources over many years".

"Without LLS's financial support and commitment to taking on all the risk, these claims would not have been brought and group members would have received nothing," it said in a statement.

It told Four Corners it was proud of its role and its commission was lower than market rates "to reflect the social justice nature of the claims".

George Dann, a member of the WA class action who started work at age 14, was appalled by the amount going to Shine and Litigation Lending Services.

He says the amount being taken in fees and commissions is disgraceful.

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Barrister Peter Cashman, who was at the forefront of class actions in the 1990s, believes the system needs to change to ensure group members get a fair share of the settlement.

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