Corporate watchdogs and class action lawyers could work much more closely together, say senior judges and litigators.
Eminent US Judge Jed Rakoff pointed to a proposal from an American academic, Professor Jack Coffee from Columbia Law School, which would see regulators hire class action lawyers to bring class actions on "behalf of the injured class but to be supervised by the regulators".
Judge Rakoff told the Maurice Blackburn Fairfax Media Corporate Conduct Symposium that the idea had already been put into practice in the US in a few cases with good results, though he did note those cases had not been brought by the Securities and Exchange Commission.
The idea was supported by former Federal Court judge Ray Finkelstein, said he wouldn't back the Coffee model but noted that co-operation between the regulator and class action law firms had not been "terribly satisfactory" in the past and could certainly be improved
"The regulator, either ASIC or the ACCC, can gather together vast stores of information which would be extremely valuable for the private litigant to get their hand on ... not only would it be valuable, it would save massive amounts of time and money," he said.
"The idea that it should be done twice over is basically absurd."
ASIC chief legal counsel Michael Kingston said regulators and the class action firm had very different aims when bringing legal action.
"The aim of the class action is compensation. Regulatory action can have a variety of aims, general deterrence, punishment, education," he said.
Maurice Blackburn principal Rebecca Gilsenan supported greater co-operation between class action law firms and ASIC, saying the impact of increasing financial pressure on regulators could be reduced by ASIC hiring class action law firms to work on cases.
Earlier, Maurice Blackburn national head of class actions Andrew Watson said there should be greater protections under the Corporations Act for whistleblowers, including broadening the category of people disclosures can be made to include journalists, and protecting whistleblowers who are not employees.
"The current whistleblower protection in the Corporations Act is too narrow in scope.
"It think we should expand the category of protected workers to include former employees and former officers of corporations and to contractors as well," Mr Watson said.
Mr Watson said the protected disclosure by whistleblowers should be expanded beyond just breaches of the Corporations Act to include any criminal offence, any breach of legal obligations, damage to the environment or any attempt to conceal any of those things.
Judge Finkelstein also called for reform of Australia's penalty regime, describing the $200,000 cap on pecuniary penalties under the Corporations Act for a civil breach of directors duties as "woefully inadequate" and that the system needed "dramatic change".
