Federal Court of Australia Bradshaw v BSA Limited (No 2) [2022] FCA 1440 File numbers: VID 488 of 2020 Judgment of: BROMBERG J Date of judgment: 30 November 2022 Catchwords: REPRESENTATIVE PROCEEDINGS – application for approval of settlement of representative proceeding – s 33V of Federal Court of Australia Act 1976 (Cth) – principles relevant to settlement approval – whether proposed settlement fair and reasonable – whether common fund order should be made and in what terms – relevant principles – whether certain deductions from settlement sums should be allowed – whether sum proposed as funder's commission is appropriate – consideration as to the appropriate rate of commission in a proceeding instituted in the "no-costs" jurisdiction of the Fair Work Act 2009 (Cth) – whether costs incurred by a funder for adverse costs insurance should be allowed – whether pre-retainer legal costs should be allowed in full – whether deduction sought for legal costs including uplift appropriate – whether non-publication orders should be made – settlement approved on basis that the distribution of the settlement sum proposed be adjusted to reflect a reduction of the funder's commission, the disallowance of adverse costs insurance and the disallowance in part of pre-retainer legal costs. Legislation: Fair Work Act 2009 (Cth) Federal Court of Australia Act 1976 (Cth) Independent Contractors Act 2006 (Cth) Legal Profession Uniform Law Application Act 2014 (Vic) Cases cited: Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 3) (2020) 385 ALR 625; [2020] FCA 1885 Augusta Ventures Limited v Mt Arthur Coal Pty Limited (2020) 283 FCR 123 Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) (2015) 239 FCR 461 Australian Securities and Investments Commission v Richards [2013] FCAFC 89 Blairgowrie Trading Ltd v Allco Finance Group Ltd (Recs and Mgrs Apptd) (In Liq) (No 3) (2017) 343 ALR 476; [2017] FCA 330 BMW Australia Ltd v Brewster (2019) 269 CLR 574 Botsman v Bolitho (2018) 57 VR 68 Bradshaw v BSA Limited (2021) 394 ALR 76; [2021] FCA 1080 BSA Limited v Bradshaw, in the matter of BSA Limited (No 2) [2022] FCA 1182 BSA Limited v Bradshaw, in the matter of BSA Limited [2022] FCA 747 C7A/2017 v Minister for Immigration and Border Protection (No 2) [2020] FCAFC 70 Caason Investments v Cao (No 2) [2018] FCA 527 Clime Capital Ltd v UGL Pty Ltd [2020] FCA 66 Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 398 ALR 404; [2022] HCA 1 Court v Spotless Group Holdings Ltd [2020] FCA 1730 Davaria Pty Ltd v 7 Eleven Stores Pty Ltd (2020) 281 FCR 501 Duck v Airservices Australia (No 3) [2021] FCA 304 Endeavour River Pty Ltd v MG Responsible Entity Ltd [2019] FCA 1719 Evans v Davantage Group Pty Ltd (No 3) [2021] FCA 70 Fair Work Ombudsman v Woolworths Group Limited (Case Management) [2022] FCA 376 Kelly v Willmott Forests Ltd (in liquidation) (No 4) (2016) 335 ALR 439; [2016] FCA 323 Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) v BHP Group Ltd (2019) 369 ALR 583; [2019] FCAFC 107 Kuterba v Sirtex Medical Limited (No 3) [2019] FCA 1374 Lenehan v Powercor [2020] VSC 82 Liverpool City Council v McGraw-Hill Financial, Inc (now known as S&P Global Inc) [2018] FCA 1289 Mann v Carnell (1999) 201 CLR 1 McKay Super Solutions Pty Ltd (Trustee) v Bellamy's Australia Ltd (No 3) [2020] FCA 461 Modtech Engineering Pty Limited v GPT Management Holdings Limited (No 2) [2013] FCA 1163 Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191 Motorola Solutions, Inc v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 Mutch v ISG Management Pty Ltd (No 2) [2020] FCA 954 Ogawa (formerly Ms PD) v President of the Australian Human Rights Commission (Pseudonym) [2022] FCAFC 160 Petersen Superannuation Fund Pty Ltd v Bank of Queensland Limited (No 3) [2018] FCA 1842 Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634 Stanford v DePuy International Ltd (No 6) [2016] FCA 1452 Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47 Thomas v Romeo Lockleys Asset Partnership [2022] FCA 1106 Turner v Tesa Mining (NSW) Pty Limited [2019] FCA 1644 Uren v RMBL Investments Ltd (No 2) [2020] FCA 647 Webster (Trustee) v Murray Goulburn Co-Operative Co Limited (No 4) [2020] FCA 1053 Williams v Ausnet Electricity Services Pty Ltd [2017] VSC 474 Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459; [2000] FCA 1925 WorkPac Pty Ltd v Rossato (2021) 271 CLR 456 Division: Fair Work Division Registry: Victoria National Practice Area: Employment and Industrial Relations Number of paragraphs: 259 Date of hearing: 8 July 2022 Counsel for the Applicants/First Cross- Respondent: Mr I Pike SC with Mr J Dooley Solicitor for the Applicants/First Cross- Respondent: Shine Lawyers Counsel for the Respondent/ Cross-Claimant: Mr R Craig KC with Mr D Habashy Solicitor for the Respondent/ Cross-Claimant: Johnson Winter & Slattery Counsel for Marcomm Communications the Third Cross-Respondent (Second Cross-Claim) Mr M Kennedy Solicitor for Marcomm Communications the Third Cross-Respondent (Second Cross-Claim) Mackay Lawyers & Advisors Counsel for LLS Fund Services (Intervener) Mr W A D Edwards with Mr M Guo Solicitor for LLS Fund Services (Intervener) William Roberts Lawyers ORDERS VID 488 of 2020 BETWEEN: PAUL BRADSHAW First Applicant SCOTT UREN Second Applicant AND: BSA LIMITED ACN 088 412 748 Respondent AND BETWEEN: BSA LIMITED (ACN 088 412 748) Cross-Claimant AND: PAUL BRADSHAW (and another named in the Schedule) First Cross-Respondent AND BETWEEN: BSA LIMITED (ACN 088 412 748) Cross-Claimant AND: SCOTT UREN (and others named in the Schedule) First Cross-Respondent order made by: BROMBERG J DATE OF ORDER: 30 novermber 2022 THE COURT ORDERS THAT: 1. On or before 7 December 2022, the applicants, the respondent and LLS Fund Services Pty Ltd (LLS) consult, agree upon and provide to the Chambers of Justice Bromberg the terms of paragraphs [27]-[29] of the Settlement Distribution Scheme reformulated so as to accord with the reasons for judgment of the Court published on 30 November 2022, together with the terms of any consequential amendments to the Settlement Distribution Scheme that may be required. 2. The interim non-publication orders made on 12 July 2022 be set aside. 3. Subject to further order, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act), there be no publication or other disclosure of the material specified in "Schedule 1" to these orders (other than to the Court, the applicants' legal representatives, LLS, the legal representatives of LLS, the respondent and the legal representatives of the respondent), on the ground that it is necessary to prevent prejudice to the proper administration of justice under s 37AG(1)(a) of the FCA Act. 4. Subject to further order, pursuant to s 37AF of the FCA Act, there be no publication or other disclosure of the material specified in "Schedule 2" to these orders (other than to the Court, the applicants' legal representatives, LLS and the legal representatives of LLS), on the ground that it is necessary to prevent prejudice to the proper administration of justice under s 37AG(1)(a) of the FCA Act. 5. Subject to further order, pursuant to s 37AF of the FCA Act, there be no publication or other disclosure of the material specified in "Schedule 3" to these orders (other than to the Court, LLS, and the legal representatives of LLS), on the ground that it is necessary to prevent prejudice to the proper administration of justice under s 37AG(1)(a) of the FCA Act. 6. On or before 12 December 2022, in relation to each of the documents specified in Schedules 1, 2 and 3, the document be redacted to reflect the non-publication provided for in the schedules and be filed by the party from whom the document originated. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. SCHEDULE 1 1. Confidential Written Submissions of BSA on settlement approval application dated 4 July 2022 Reference Text Paragraph 12(e). In accordance with yellow highlights in Annexure A to BSA's proposed non-publication orders circulated on 11 July 2022. Sub-heading C. Paragraph 13. Paragraph 14. Footnotes 11 and 12. 2. Confidential Affidavit of A Piesiewicz dated 4 July 2022 Reference Text Sub-heading A. In accordance with the yellow highlights in Annexure B to BSA's proposed non-publication orders circulated on 11 July 2022. Paragraph 7. Paragraph 9(b). 3. Confidential Exhibit APP-1 referred to in the affidavit of A Piesiewicz of 4 July 2022 Whole document. 4. Affidavit of V Antzoulatos dated 27 June 2022 Reference Text Paragraphs 101(c) and (d) – all title references to enable identification of report, author and company of author. In accordance with yellow highlights in Annexure B1 to BSA's proposed non-publication orders circulated on 11 July 2022. Paragraphs 103(c) to (g). 5. Exhibit VA-16 referred to in the affidavit of V Antzoulatos dated 27 June 2022 Whole document. 6. Exhibit VA-17 referred to in the affidavit of V Antzoulatos dated 27 June 2022 Whole document. 7. LLS outline of submissions dated 4 July 2022 Reference Text Paragraph 9(c) (the first seven words). The first seven words. Paragraph 9(d). The whole sub-paragraph. Paragraph 10. The last sentence. Paragraph 34. The last six words in the first sentence. 8. Affidavit of S Conrad dated 4 July 2022 Reference Text Paragraph 52. The first sentence. 9. Affidavit of A Becker sworn 21 July 2022 Reference Text Paragraph 10(b). The second and third sentence. Paragraph 13. All. Paragraph 14. All. Paragraph 16. All. 10. Confidential written submissions of BSA on application for non-publication orders Reference Text Paragraph 3. The words in brackets. Paragraph 18. From "(a)" to end of the paragraph. Footnote 13. After the words "…including by reason of" to the end of the footnote. SCHEDULE 2 1. Exhibit VA-14 to the affidavit of V Antzoulatos of 27 June 2022 Reference Text Page 119. The whole page. 2. Exhibit VA-15 to the affidavit of V Antzoulatos of 27 June 2022 Whole document. 3. Exhibit VA-22 to the affidavit of V Antzoulatos of 11 July 2022 Reference The name of a person or address on pages 28, 52, 59 to 116, 118, 121, 126, 130, 132, 138 and 141 to 144. SCHEDULE 3 1. Affidavit of S Conrad dated 4 July 2022 Reference Text Paragraph 51. The final sentence. Paragraph 25. The figure before the words "of the resolution sum". 2. Exhibit SC-4 to the affidavit of S Conrad dated 4 July 2022 Whole document. 3. Exhibit SC-1 to the affidavit of S Conrad dated 4 July 2022 Reference Text First page, sentence commencing "Shine Lawyers has requested…" The first figure and figure following the words "assuming we only attract…" and before "…of potential". Second page, sentence commencing "I have attached…" The words after "(Tabs 1 and 2)" to end of sentence. Second page, sentence commencing "I have also attached…" The words after "(Tab 3)" to end of sentence. Second page, sentence commencing "[a]s referred to in paragraphs…" Whole paragraph and following three paragraphs until the words "…I will send you a copy" overleaf. Section titled "Quantum". The words following "Shine has been…" up to "…estimate of $50 million" overleaf. Section titled "Costs". The words following "factual matrix…" up to conclusion of that paragraph. The sentence commencing "[t]herefore…" and concluding "…by Shine". Section titled "Timing". The whole paragraph. Section titled "Recoverability". The whole paragraph except "I am unaware whether BSA has any indemnity insurance policies in place." Section titled "Recommendation". All paragraphs in this section until end of document. 4. Exhibit SC-2 to the affidavit of S Conrad dated 4 July 2022 Reference Text First page. Entire first page. Second page. Entire second page except "…the CAC recommended the matter to the Board". Third page. Entire third page. REASONS FOR JUDGMENT BROMBERG J: INTRODUCTION 1 By an amended interlocutory application dated 7 July 2022, Paul Bradshaw and Scott Uren, the applicants, sought court approval under s 33V of the Federal Court of Australia Act 1976 (Cth) (FCA Act) of a proposed settlement of a class action they brought against the respondent, BSA Limited. Having made a deed of settlement, the applicants, BSA and LLS Fund Services Pty Ltd (Funder) jointly proposed that the settlement be approved together with an agreed settlement distribution scheme (Settlement Distribution Scheme) pursuant to which they propose that the settlement sum of $20 million be distributed. 2 I was persuaded that the Court should approve the settlement. On 26 July 2022, I made an order approving the settlement as well as an order approving the Settlement Distribution Scheme in part. My reasons for approving the settlement are set out below. 3 However, I have not been persuaded that the Settlement Distribution Scheme as proposed by the parties should be approved without amendment. In furtherance of the Court's protective role in relation to the interests of group members, I have determined that the settlement sum should be distributed differently from that proposed by the parties. My preparedness to approve an amended Settlement Distribution Scheme is also explained in the reasons which follow. 4 Before turning to those reasons, it is useful to set out at a high level, the key issues in the proceeding. 5 The applicants and group members are telecommunications technicians who install and maintain telephone and other telecommunications services. BSA is a contracting company operating in the telecommunication industry where it provides technical services to telecommunication providers. The applicants claim that since 2003 they and group members had provided their services to BSA as employees of BSA and that they were not paid various employee entitlements due to them under the Fair Work Act 2009 (Cth) (FW Act) and the Telecommunications Services Award 2010, an industrial award made under the FW Act. 6 Broadly speaking, the key question in the proceeding is whether the applicants and group members provided their services to BSA as employees of BSA or, alternatively as BSA contends, provided services to their own corporations, those corporations having contracted with BSA to provide services to BSA as an independent contractor. Whereas the applicants contend that, taking account the totality of their relations with BSA, they and each group member were engaged by BSA as its employees, BSA contends that it had no legal relationship with those individuals and that the agreements it made were made with corporate entities from whom it received services under an independent contractor relationship. 7 By their originating application, the applicants sought declarations that; the applicants and group members are employees of BSA, are covered by the Award and that BSA have breached the Award and contravened the FW Act. They also sought orders under ss 545 and 546 of the FW Act for the payment of compensation and the imposition of civil penalties. In the alternative, the applicants sought an order, under s 16 of the Independent Contractors Act 2006 (Cth), varying the 'Pleaded BSA Agreements' (as defined in the statement of claim) by inserting a term that BSA pay a sum to each of the applicants and group members such that they would be placed in the position they would have been in had they been employees of BSA. 8 Aside from denying liability, BSA also issued cross-claims against the applicants, group members and their associated corporations. The cross-claims are premised on the Court finding that BSA was the employer of the applicants and group members and, on that premise, seek the reimbursement of monies paid by BSA to the associated corporations in respect of the services provided by the applicants and group members. 9 On 30 March 2022, the parties entered into a deed of settlement (Deed) by which BSA agreed to pay $20 million (Settlement Sum) in settlement of the claims of the applicants and group members and the cross-claims, with no admissions of liability. The Settlement Sum is to be paid by BSA in three instalments over a two year period. The Deed contemplates that if BSA successfully raises capital (referred to as a "Capital Raise"), in certain circumstances, the first two instalments may be increased and the last correspondingly decreased. In return, the applicants and group members provide broad releases from all actions, claims and demands they have in relation to the subject matter of the proceeding. 10 I note here that an issue arose between the parties as to whether money raised by BSA in April and May 2022 constituted a "Capital Raise". On 1 June 2022, BSA commenced proceedings against the applicants seeking a declaration on the meaning of the term "Capital Raise" (Declaratory Proceeding): see BSA Limited v Bradshaw, in the matter of BSA Limited [2022] FCA 747 and BSA Limited v Bradshaw, in the matter of BSA Limited (No 2) [2022] FCA 1182. It was held in the Declaratory Proceeding that the money raised by BSA did not constitute a "Capital Raise" which would have increased the first payment to be made by BSA under the Deed (described at [57] below). That proceeding is of relevance because the parties seek that the applicants' costs of the Declaratory Proceeding be paid out of the Settlement Sum. 11 Pursuant to the Deed, the Settlement Sum, after deductions including for legal costs and a funding commission for the Funder, is to be distributed to the applicants and group members under the terms of the Settlement Distribution Scheme. Pursuant to the Settlement Distribution Scheme, as proposed, after the deductions, the residual amount that will be available for distribution to the applicants and group members is approximately $10.7 million which is approximately 53% of the Settlement Sum. 12 The settlement approval application was heard on 8 July 2022. Much of the time at the hearing was devoted to various aspects of the Settlement Distribution Scheme. 13 On 26 July 2022, I made orders that approved the Deed and certain parts of the Settlement Distribution Scheme pursuant to s 33V(1) of the FCA Act. That section relevantly provides that a class action may not be settled without the approval of the Court. If the Court grants approval, it may make such orders as are just with respect to the distribution of any money paid under a settlement: s 33V(2) of the FCA Act. 14 My orders were as follows: Approval of Settlement 1 Pursuant to s 33V(1) of the Federal Court of Australia Act 1976 (Cth) (FCAA), the settlement of this proceeding be approved on the terms set out in: (a) The Settlement Deed dated 30 March 2022 attached and marked A (Deed); and (b) The Settlement Distribution Scheme (Scheme) attached and marked B, save as to those parts thereof which are expressed to be subject to the Court's determination or approval, which parts shall be the subject of further order. 2 Pursuant to s 33ZB of the FCAA, the persons affected and bound by the settlement of these proceedings and Orders 1, 3 and 4 of these orders are: (a) the Applicants, the Respondent, the Second Cross-Respondent (First Cross Claim), the Second Cross-Respondent (Second Cross Claim), the Third Cross- Respondent (Second Cross Claim) and Group Members (other than any Group Members who filed an opt out notice); and (b) LLS Fund Services Pty Ltd ABN 51 627 975 213 as Trustee for Litigation Lending Fund 1 (LLS), Shine Justice Ltd and Shine Lawyers Pty Ltd. 3 Pursuant to s 33V, s 33ZB(a) and s 33ZF of the FCAA or otherwise, only Group Members who are eligible to participate in the Scheme in accordance with clauses 12 and 13 thereof shall be entitled to receive a distribution from the settlement. Appointment of Administrator and approval of matters referred to in the Scheme 4 Pursuant to ss 33V and/or 33ZF of the FCAA, Shine Lawyers Pty Ltd be appointed as Administrator of the Scheme (Administrator) to act in accordance with the Scheme subject to any direction of the Court, and to have the powers and immunities conferred by the Scheme on the Administrator, subject to any direction of the Court. Consequential matters 5 Pursuant to ss 22, 23 or 33ZF of the FCAA, rule 1.32 of the Federal Court Rules 2011 (Cth) and/or the Court's inherent jurisdiction the proceeding (including all cross claims still on foot) is (without the need for any further order) dismissed with no order as to costs, with effect from the date on which the Administrator notifies the Associate to the Honourable Justice Bromberg (or another Justice of the Federal Court of Australia presiding over the proceedings) of the final payment having been made to Group Members in accordance with the Scheme. 6 Within 28 days of the date that "Final Settlement Approval" has occurred within the meaning of the Deed the Respondent shall discontinue the Cross-Claims filed by it against those Group Members who have opted out of the proceedings and any corporate Cross-Respondent associated with such Group Member on the basis that: (a) such discontinuance is subject to a right of reinstatement; (b) there be no liability on the part of the Respondent to pay the costs of any Cross-Respondent to that discontinued claim unless within 14 days of the receipt of the notification required by paragraph (d), a Cross-Respondent makes an application seeking costs, in which case any liability will be determined by the Court; (c) the requirements of rule 26.13 of the Federal Court Rules 2011(Cth) are dispensed with. (d) the respondent shall forthwith notify each Group Member who has opted out and any associated corporate Cross-Respondent of that Group Member of this order, by sending to the email address on the Opt Out Notice of the Group Member or to the Group Member's last known email or postal address, a copy of this order together with a brief plain English explanation of its content and effect. 7 The parties, the Administrator and LLS have liberty to apply to relist the matter for the purpose of seeking orders consequential to or in connection with the Deed and/or the Scheme. 15 The version of the Settlement Distribution Scheme approved by order 1(b) did not approve those aspects of the Settlement Distribution Scheme that provide for the deduction of various costs from the Settlement Sum or the distribution of the Settlement Sum. Those aspects of the Settlement Distribution Scheme were expressed to be subject to the Court's further determination or approval. 16 I now provide my reasons for making the 26 July 2022 orders to approve the settlement pursuant to s 33V(1) of the FCA Act, and my preparedness to make further orders for the distribution of the Settlement Sum pursuant to s 33V(2) of the FCA Act. THE EVIDENCE 17 At the commencement of the hearing, the applicants relied on the affidavits of Vicky Antzoulatos, a partner at Shine Lawyers, sworn on 9 May 2022, 27 June 2022 and 7 July 2022, (the First, Second and Third, Antzoulatos Affidavits). The applicants also relied on short written submissions on the settlement approval application dated 27 June 2022. 18 The First Antzoulatos Affidavit annexed the Deed and Settlement Distribution Scheme (as it then was). In the Second Antzoulatos Affidavit, Ms Antzoulatos addressed, amongst other matters, the proposed settlement, the steps taken to notify group members of the proposed settlement, objections to the settlement, her own assessment of the complexity of the litigation, the merits of the claim, the reasonableness of the settlement and the costs of the proceeding. The annexures to the Second Antzoulatos Affidavit included: (1) a confidential affidavit of Arno Becker, Chief Financial Officer and Interim Chief Executive Officer of BSA, sworn on 21 April 2022 pursuant to clause 2.4(b) of the Deed, which in turn deposes to a confidential report prepared by [name redacted] of [name redacted] dated 29 September 2022 (the [name redacted] Report); (2) the expert report of Christopher Hill, Chartered Accountant and Registered Liquidator, dated 27 June 2022; (3) the expert report of Catherine Mary Dealehr, a costs consultant, dated 27 June 2022; (4) a confidential and without prejudice loss assessment report of Mariano Rossetto prepared for the purpose of mediation (Mediation Loss Assessment Report); and (5) the confidential counsel opinion of Mr Ian Pike SC and Mr Jonathon Dooley who appeared for the applicants (the Counsel Opinion). 19 In the Third Antzoulatos Affidavit, Ms Antzoulatos addressed, amongst other matters, the applicants' legal costs and other proposed deductions from the Settlement Sum, further objections to the proposed settlement, settlement registration and settlement modelling. Annexed to this affidavit is a supplementary expert report of Ms Dealehr dated 30 June 2022 (Second Dealehr Report). 20 In response to concerns I raised during the course of the approval hearing regarding the sufficiency of the applicants' evidence on costs, including the pre-retainer and pre-commencement costs and the costs of the settlement approval itself, the applicants filed the further affidavits of Ms Antzoulatos sworn on 11 July 2022 and 14 July 2022 (the Fourth and Fifth Antzoulatos Affidavits). The applicants also filed an affidavit of Mariano Rossetto, Chartered Accountant, sworn on 12 July 2022 (Rossetto Affidavit) regarding the "Loss Assessment Formula" adopted in Schedule 1 of the Settlement Distribution Scheme. The applicants later filed a second supplementary expert report of Ms Dealehr dated 26 July 2022 (Third Dealehr Report). 21 On 14 July 2022, the applicants also submitted an amended version of the Settlement Distribution Scheme that incorporated amendments that had been agreed or were proposed as a consequence of matters raised at the settlement approval hearing. 22 BSA relied on an affidavit of Andreas Piesiewicz, a partner at Johnson Winter & Slattery, sworn in connection with the settlement approval application on 4 July 2022 (Piesiewicz Affidavit). The Piesiewicz Affidavit annexed BSA's confidential mediation paper and its annexures, which included the [name redacted] Report and a report prepared by McGrath Nicol dated 29 September 2021 and its annexures. BSA also relied on written submissions on the settlement approval application dated 4 July 2022. 23 The Funder was granted leave to intervene on the settlement approval application to make submissions in relation to Court approval for various payments to be deducted for its benefit from the Settlement Sum pursuant to the Settlement Distribution Scheme. It relied on the affidavits of Stephen Conrad, Chief Executive Officer of the Funder, affirmed on 4 July 2022 and 14 July 2022 (the First and Second Conrad Affidavits), and written outlines of submissions on the settlement approval application dated 4 and 14 July 2022. 24 The parties also filed material relating to proposed non-publication orders sought to replace the interim non-publication orders made on 12 July 2022. I discuss this material further below at [237]-[255]. BACKGROUND TO THE PROCEEDING AND SETTEMENT APPROVAL APPLICATION 25 The procedural background to the proceeding is described in the Second Antzoulatos Affidavit at [45]-[69], the Fourth Antzoulatos Affidavit at [7]-[15] and the First Conrad Affidavit at [20]-[27]. As there described, Shine began investigating the prospect of a class action against BSA in around January 2019. Shine approached the Funder about funding the proceeding in about February 2019. 26 Ms Antzoulatos deposed that on 23 November 2018, Shine had commenced another class action in this Court entitled Robert Mutch v ISG Managements Pty Ltd, being proceeding number VID 1492 of 2018 (Mutch Proceeding). The Mutch Proceeding was also funded by the Funder. Ms Antzoulatos deposed that the issues in the Mutch Proceeding are very similar to the issues in this proceeding. Ms Antzoulatos deposes that in the circumstances, Shine was already familiar with the issues and investigations that needed to take place prior to the commencement of the proceedings. 27 Ms Antzoulatos deposed that there was an extensive period of without prejudice negotiations with BSA's lawyers prior to the proceeding being filed. A chronology of communications with BSA and BSA's lawyers prior to the commencement of the proceeding was annexed to the Fourth Antzoulatos Affidavit. 28 The proceeding was commenced as an open class action by originating application and statement of claim filed on 24 July 2020. 29 On 23 November 2020, I made orders regarding, inter alia, the common issues to be determined at the initial trial, and requiring the parties to file and serve a list setting out proposed categories of discovery sought in the proceeding. 30 In late November and December 2020, the applicants filed a reply to the defence, and the applicants and their corporate entities filed defences to the first and second cross-claims. 31 On 16 March 2021, I made orders, inter alia, requiring the parties to give discovery of documents falling within agreed categories of discovery. 32 On 4 June 2021, I made orders, including: (1) granting leave for BSA to file and serve cross-claims against group members and their associated corporations; (2) requiring Shine to make the pleadings filed in the proceeding available for download from its website from 7 July 2021 until further order of the Court; (3) staying the cross-claims and ordering no further steps be taken by BSA or by the relevant cross-respondents in respect of them; (4) requiring BSA to provide the applicants with a list of all group members in the proceeding known to BSA together with the last known contact details of those persons. 33 On 11 and 15 June 2021, the applicants gave discovery of documents falling within agreed categories (with further discovery later given on 30 June, 12 August and 24 September 2021). 34 On 30 July 2021, BSA gave discovery of 40,124 documents falling within agreed categories. 35 On 4 June 2021 and 2 August 2021, I made orders relating to an opt out process, including approving the form of an Opt Out Notice and fixing 24 September 2021 as the date before which a group member may opt out of the proceeding. The Opt Out notice gave instructions as to the various options available to group members in relation to the class action and explained that all group members (other than those who opted out) would be bound by the Court's determination of the common issues at the initial trial and any settlement of the class action. 36 Further to an interlocutory application filed by the applicants, on 7 September 2021, I made orders for a corrective notice to be distributed to group members regarding the opt out process: see Bradshaw v BSA Limited (2021) 394 ALR 76; [2021] FCA 1080. 37 In the Second Antzoulatos affidavit, Ms Antzoulatos deposed that following distribution of the opt out notice and corrective notice, 72 group members had opted out of the proceeding. 38 On 14 October 2021, the parties commenced a private mediation of the proceeding. The mediation was adjourned and reconvened on 5 November 2021. The parties subsequently reached an agreement to resolve the proceeding and exchanged signed heads of agreement on 8 February 2022. On 30 March 2022, the Deed was executed and counterparts exchanged between all relevant parties. SETTLEMENT APPROVAL PROCESS 39 On 31 March 2022, the Court made procedural orders to facilitate the hearing of the applicants' settlement approval application. The orders included orders regarding the proposed form and manner for the distribution of a notice to group members regarding the proposed settlement, the Court approval process and key dates for the related steps. 40 On 11 May 2022, the Court approved the form of a Notice of Proposed Settlement (Settlement Notice). 41 The Settlement Notice described the Settlement in the following terms (emphasis in original): [11] Under the proposed settlement of the BSA Class Action, without the admission of any liability, BSA will pay a total sum of $20 million in traches (Settlement Sum) to settlement the claims, including the Cross Claims, inclusive of legal fees and disbursements, any interest, and funder's costs and commissions, without admission of any liability by any of the parties. [12] If the proposed settlement is approved by the Court: (a) the applicants and group members (other than those who have opted out of the BSA Class Action… will release BSA and its related parties from each and every claim made by them and./or on their behalf in the BSA Limited Class Action. This release does not include other claims for loss, damage and./or compensation that the applicants and group members may have and which are not made in the BSA Class Action; and (b) BSA releases the applicants and group members (other than those who have opted out of the BSA Limited Class Action[…]) from each and every claim made by BSA in the BSA Limited Class Action including each of the claims set out in the Cross Claims. [13] The Settlement Sum represents, in Shine Lawyers' view, a substantial compromise on the sum that the applicants may recover if the applicants' and group members' claims succeeded in full and the cross claims failed (the Best Case Scenario). However, BSA does not share this view. It considers that, firstly, the applicants' claims will not succeed, secondly, even if they did, group members would not themselves succeed in providing their own individual claims, thirdly, not many group members would actually attempt to prove their own individual claims and, fourthly, that BSA's cross claims for repayment and compensation would succeed such that the applicants and group members may be liable to repay money to BSA, or the Court would choose not to award any compensation to the applicants and group members even if their claims succeeded. The applicants' representatives also closely considered the ability of BSA to pay a substantial judgment obtained in the proceedings in the Best Case Scenario, and in particular its publicly available financial statements, which as at December 2021, disclose (amongst other things) current net case of $3,441,000. As such, BSA's agreement to pay the Settlement Sum was reached after extensive negotiations and consideration by the legal representative for the applicants and group members of a number of factors including the complex legal issues, the inherent risks with continuing to run the case to trial, as well as BSA's financial capacity to meet any judgment. [14] The Settlement Sum will be paid over three years, with minimum part-payments as follows: (a) $4.4 million by 30 June 2022 (Instalment 1); (b) $6.6 million by 30 June 2023 (Instalment 2); and (c) $9 million by 30 June 2024 (Instalment 3) or the remaining balance of the Settlement Sum owing as at that date if more than the minimum amounts have been paid (Remaining Balance). [15] Further, under the proposed settlement: (a) If BSA raises funding in excess of $8 million in readily available funds prior to 30 June 2022, then BSA must pay $3.6 million of that funding towards the Settlement Sum, in addition to Instalment 1, and Instalment 3 will be reduced by the additional amount paid by BSA leaving the Remaining Balance; (b) If BSA raises funding in excess of $12 million in readily available funds prior to 30 June 2023, then BSA must pay $5.4 million of that funding towards the Settlement Sum, in addition to Instalment 2, and Instalment 3 will be reduced by the additional amount paid by BSA leaving the Remaining Balance; (c) BSA does not need to make the payments of $3.6 million in a, or $5.4 million in b, if the amounts raised are for the purpose of addressing delay between the receipt of payment from BSA's client(s) and BSA's needs or obligations to pay its workforce (including both independent contractors and employees) or to meet other operational costs. [16] How the settlement will be administered, including the process to work out if you have an "Eligible Claim" will be set out in a "Settlement Distribution Scheme", which is the plan prepared by Shine Lawyers to determine to whom compensation will be paid, how much they are entitled to, and how that compensation will be paid. The person reasonable for administering the settlement scheme is called the "Settlement Administrator". The Settlement Administrator is proposed to be Shine Layers. The Settlement Distribution Scheme and the identity of the Settlement Administrator will need to be approved by the Court… 42 The Settlement Notice contained a section dealing with how group members should register to participate (emphasis in original): [22] If you have already (a) entered into a funding agreement with LLS and a Retainer with Shine Lawyers and/or (b) previously registered for the class action with Shine Lawyers, you do not need to take any further steps to register your claim and interest in participating in the settlement… [23] If you have not previously registered for the class action, you will need to register before you can receive any compensation, because the applicants intend to ask the Court to approve the settlement on the basis that only registered group members will be eligible to receive a distribution. To register you must complete the registration form at Annexure 1 to this Notice and return it to Shine Lawyers. Alternatively you can complete and submit an online registration form on the Shine Lawyers website … You must register before 17 June 2022. Registrations received after that time will not be accepted, and you will be treated as having not validly registered. 43 The Settlement Notice explained the consequences of not registering to participate (emphasis in original): [42] If you did not opt out of the BSA Limited Class Action before 4.00pm on 24 September 2021 and you do not take steps to register with Shine Lawyers to participate in the settlement (that is, you do nothing), then you will be bound by the settlement, however if the Court approves the settlement on the basis put forward by the applicants you will not be entitled to the distribution of any monies from the settlement. This is because the applicants intend to ask the Court to approve the settlement on the basis that only registered group members receive a distribution. [43] If you do nothing, it also means that if the settlement is approved you will no longer have the right to pursue any claims against BSA and its related parties (including related bodies corporate and BSA's past or present directors and officers) of the kind made in the BSA Limited Class Action. Similarly, BSA will no longer have the right to pursue any claims made in the Cross Claims against you. 44 In relation to how much group members will receive under the settlement, the Settlement Notice set out that (emphasis in original): [26] The dollar amount you receive if you register to participate and are found to be eligible will be worked out following a process set out in the Settlement Distribution Scheme… The precise amount that will be payable to each individual group member is not yet known and cannot yet be accurately estimated, including because it depends on information which has not yet been provided by group members who have not yet registered, such as the length of time group members provided services to BSA and the number of hours worked each day based on group member data to be provided by BSA. [27] Importantly, group members' entitlements will be calculated using an agreement entitlement calculation model that has regard to, at least, the factors mentioned above (Calculation Model). As mentioned above, the Settlement Distribution Scheme, including the Calculation Model must be approved by the Court. [28] Please note you will not receive the full value of your claim under the settlement. The settlement is a compromise of the claims made taking into account, amongst other matters, BSA's financial capacity to pay and the risk that the applicants might lose the class action. 45 The Settlement Notice contained a section dealing with "legal costs and other costs in the class action". This stated as follows (emphasis in original): [29] In a Notice you may have received in around August 2021 [the opt out notice], you were told that Shine Lawyers was running the case, and that funding for the litigation was being provided by LLS. The Notice also included that on settlement of the class action, "the Court will be asked to deduct from the compensation received amounts representing Shine's legal costs and a funding commission payable to LLS, and to distribute those legal and funding costs fairly among all persons who have benefited from the class action. That is, lawyers' costs and LLS's commission payment will come out of any compensation. The effect of this kind of order, if made, would be that all group members how benefit will contribute to the legal and funding costs of the compensation moneys, whether or not those group members signed up to a funding agreement with LLS." [30] The total costs incurred by the applicants in running the proceeding has been approximately $3,115,000. A portion of these have been paid by LLS. [31] The amounts which are proposed to be deducted from the settlement are for: (a) Project Costs paid and/or incurred by LLS of approximately $2,615,000, principally relating to legal costs (for fees and disbursements incurred in running the class action, primarily comprised of fees paid to the solicitors, barristers, and experts who were involved in the case) and other costs (including payment of premiums for adverse costs insurance to cover the applicants' and group members' adverse costs risks). (b) Funding commission: the Applicants will seek Court approval of a payment of approximately $5,500,000 to LLS (representing approximately 27.5% of the Settlement Sum) in return for its funding of this class action and taking on the risks of losing the class action and the risks of adverse costs orders. In simple terms, a common fund order requires group members who receive compensation to pay a percentage of it to the litigation funder who has provided funding for the proceeding. It will be a matter for the Court to determine whether a common fund order or another form of cost-sharing order should be made and the amount of the funding commission which are reasonable in the circumstances of the case, and which may therefore be deducted from the Settlement Sum. (c) Shine Lawyers' legal costs not paid by LLS total an estimated amount of $500,000 in addition to settlement approval costs of approximately $200,000. (d) Administration Costs, in an estimated amount of $300,000 payable over 3 years, the reasonableness of which the Court will consider. (e) Lead Applicant's Reimbursement Fee, in an estimated amount of $30,000 ($15,000 payable to each lead applicant), being an amount to reimburse the applicants for the time and expense of conducting the class action, the reasonableness of which the Court will consider. [32] The Court will need to approve deduction of any of these costs in advance and may approve lesser amounts than what is proposed. If you have a concern about the costs proposed to be deducted, you are free to file a "Notice of Objection to the Proposed Settlement"… 46 The Settlement Notice, at [39]-[41], provided details of the process by which group members could object to the settlement, and stated that the deadline for objecting was 30 June 2022. Attached to the Settlement Notice was a form entitled "Notice of Objection to Proposed Settlement". 47 Ms Antzoulatos deposes that between 13 May 2022 and 17 June 2022, the Settlement Notice was published on Shine and the Court's website, and distributed directly by email to approximately 3,400 group members and by post to approximately 930 group members. I am satisfied by the evidence of Ms Antzoulatos that reasonable attempts have been made to contact known group members to bring the proposed settlement to their attention. 48 On 22 June 2022, I made orders, inter alia, that a further notice be sent to group members advising them that there was an error in the Court's email address used in the Notice of Objection. The order further extended the time for group members to object to the settlement and file evidence in respect of any objection to 6 July 2022. 49 Between 22 and 24 June 2022, the further notice was emailed and posted to group members by Shine. 50 In the event five objections were lodged by group members. The first objection was lodged by Mr Shahin Tahmasebi on 15 June 2022. By his objection, Mr Tahmasebi contended that: the proposed settlement fails to deliver justice; the Settlement Sum is not adequate having regard to the asserted value of group members' claims; and it is the lawyers who stand to benefit most from the proposed settlement. 51 The second objection was lodged by Mr Hung Thanh Tran on 23 June 2022. Mr Tran objected to the proposed settlement on the basis that it was "unfair and unjust". 52 The third objection was lodged by Mr Binh Van To on 27 June 2022. Mr To did not specify the grounds of his objection and indicated within his Notice of Objection that he wished to give oral submissions at the settlement approval hearing. However, Mr To did not attend the hearing. 53 The fourth Notice of Objection was lodged by Mr Andrew Stowers on 1 July 2022. Rather than providing grounds for his objection, Mr Stowers appears in substance to have been seeking to opt out of the proceeding, on account of his advanced age, using the Notice of Objection form after the opt out period had ended. 54 The fifth objection was lodged by Mr Achraf Allach on 3 July 2022. Broadly speaking, the nature of Mr Allach's objection is that: the Settlement Notice is vague as to the terms of the settlement; the proposed deductions from the Settlement Sum in favour of Shine and the Funder are confusing, high and disproportionate; group members have to wait to be paid over three years; and the proposed settlement is not fair, reasonable, and adequate in light of the harm suffered by group members. 55 Ms Antzoulatos otherwise deposed, at [43] of the Second Antzoulatos Affidavit, that since notification of the settlement to group members, Shine had received approximately 55 emails expressing appreciation for the resolution of the proceeding. 56 As at 7 July 2022, Ms Antzoulatos deposed at [16]-[19] of the Third Antzoulatos Affidavit, that 986 group members have registered their interest to participate in the settlement, 240 of whom have executed costs agreements and funding agreements with Shine and the Funder. OVERVIEW OF THE PROPOSED SETTLEMENT and settlement distribution Scheme 57 The key features of the settlement, as embodied in the Deed, are as follows: (1) BSA agrees to pay the Settlement Sum of $20 million in full and final settlement of the claims, inclusive of legal fees, disbursements, interest and the Funder's costs and commission. (2) The Settlement Sum is paid over two years, with minimum part payments of: $4.4 million by 30 June 2022 (Instalment 1), $6.6 million by 30 June 2023 (Instalment 2), and $9 million by 30 June 2024 (Instalment 3) (or the remaining balance of the Settlement Sum as at that date if more than the minimum amounts have been paid). (3) If BSA completes any defined "Capital Raise" in one or both of the financial years ending 30 June 2022 and 30 June 2023, then the amounts payable in Instalments 1 and 2 are increased by the defined "FY 22 Capital Raise Payment" and the "FY 23 Capital Raise Payment" as applicable, with a corresponding reduction to Instalment 3 (or in other words, if BSA were to complete any defined "Capital Raise", the payment of part of the Settlement Sum would be accelerated, with the total Settlement Sum remaining at $20 million). (4) The Settlement Sum be distributed in accordance with the Settlement Distribution Scheme as approved by the Court. (5) In consideration for the Settlement Sum, the applicants on their own behalf and on behalf of the group members release and forever discharge each of the BSA Released Parties (as defined in the Deed) jointly and severally from each and every claim made by (or on behalf of) the applicants or any group member in the proceeding. This release does not extend or apply to any other claims for loss, damage and/or compensation that the applicants and any group members may have and which are not made in the proceeding. (6) Similarly, BSA releases and forever discharges each of the applicants, their corporate entities and the group members (other than those who have opted out of the proceeding) jointly and severally from each and every claim made by BSA in the proceeding including the cross-claims. (7) The proposed settlement is conditional on Court approval and the passing of any appeal period or dismissal of any appeal. (8) Shine is not to accept instructions from any person to maintain or commence proceedings in any jurisdiction against BSA arising out of any of the matters the subject of the proceeding. 58 Critically, the Deed provides that while the Settlement Sum (after deductions) is to be applied to registered group members, all group members (other than those who opted out) will be bound by the settlement. 59 The settlement was approved on the terms set out in the Deed. The Deed was attachment "A" to the orders I made on 26 July 2022. 60 The key features of the Settlement Distribution Scheme (as proposed) are as follows: (1) The Settlement Distribution Scheme shall be administered and applied by the Settlement Distribution Scheme Administrator. The proposed Administrator is Shine. (2) The Administrator will hold the Settlement Sum in an interest bearing account until it is distributed. (3) The Settlement Distribution Scheme shall apply to group members who lodge a "Settlement Registration Notice" and/or who have registered with Shine by 17 June 2022 (participating group members). (4) The Administrator is to create a "Confirmed Group Member Schedule". (5) The Administrator shall calculate each participating group member's claim using the "Loss Assessment Formula" described in Schedule 1 of the Settlement Distribution Scheme. (6) The Administrator will notify participating group members of the calculation of their individual settlement entitlement by way of an assessment notice and give them an opportunity to request a review of the assessment notice. (7) Prior to any distribution to participating group members, the Administrator will deduct the defined legal, funding and other costs approved by the Court from the Settlement Sum, leaving the residual Settlement Sum. (8) From the residual Settlement Sum, the Administrator will distribute the entitlements of participating group members proportionately to the aggregate of the claims of all participating group members. 61 The above aspects of the Settlement Distribution Scheme were approved by my orders of 26 July 2022. The Settlement Distribution Scheme, as approved, was attachment "B" to those orders. 62 On that date, I also made an order appointing Shine as the Administrator. I accept that Shine has considerable experience in this process and with this proceeding, and it is appropriate in the circumstances of this case for the role of Administrator to be undertaken by that firm. 63 My orders of 26 July 2022 also approved the "Loss Assessment Formula" described in Schedule 1 of the Settlement Distribution Scheme. The origin and justification for the Loss Assessment Formula is described in the Rossetto Affidavit. 64 In summary, the process of assessing an individual group member's claim is based on BSA's records of the work completed by each technician in the period 24 July 2014 to 23 July 2020. The Loss Assessment Formula then provides for the calculation of the income and benefits that each group member would have received were they determined to be employees of BSA in accordance with the Award. The relevant classification applied under the Award in respect of each group member is a Telecommunications Technician employed by BSA on a casual basis. The applicable base hourly rate of pay is as provided for by the Award as amended from time to time. 65 The calculation method is described at paragraphs [3]-[5] of the Loss Assessment Formula. A group members' total claim is calculated as the total of their: ordinary wage, plus casual loading, plus overtime, plus allowances (including travel allowance, telephone allowance and tool allowance), plus superannuation at 9.5%. The assumptions applied in the Loss Assessment Formula are described at paragraphs [6]-[21]. 66 After the total claim for all participating group members has been calculated, the amount that each group member will receive in the settlement is calculated in accordance with the formula set out at paragraph [4] of the Loss Assessment Formula. The effect of that formula is that each participating group member will receive a pro rata settlement distribution of the residual Settlement Sum. 67 My orders made on 26 July 2022 did not approve the deduction of any specific amounts from the Settlement Sum. This aspect of the Settlement Distribution Scheme was reserved for further determination and approval of the Court. 68 In summary, the total amounts proposed to be deducted from the Settlement Sum, as set out at [22] in the Third Antzoulatos Affidavit, are as follows: 1. the applicants' legal costs and disbursements incurred prior to the settlement of the proceeding, comprising: (1) $1,916,376.44 in professional fees and disbursements (including GST) paid by the Funder (Funder's Costs); (2) $500,665.48 (including GST) in remaining professional fees incurred by Shine, including a 25% uplift in those fees in the amount of $107,318 (the Unfunded Shine Fees); and (3) $689,700 in respect of adverse costs insurance (ATE insurance) premium paid by the Funder (ATE Insurance Premium); 2. $5.5 million on account of funding commission at a rate of 27.5% (Funder's Commission); 3. $427,878.80 in respect of the applicant's settlement approval costs (up to and including 8 July 2022) (Settlement Approval Costs); 4. $122,487.75 on account of Shine's future costs as Administrator (Administration Costs); 5. lead applicants' fees in the amount of $30,000 (being $15,000 to each of Mr Bradshaw and Mr Uren) (Lead Applicants Fees); and 6. $110,000 in respect of the applicants' costs of the Declaratory Proceeding (Declaratory Proceeding Costs). 69 In the Settlement Distribution Scheme, the Funder's Costs and ATE Insurance Premium are collectively referred to as the "Funder's Project Costs". The Unfunded Shine Fees are referred to in the Settlement Distribution Scheme as the "Applicants' Remaining Costs". 70 The explanation for Funder's Costs and the Unfunded Shine Fees arises from the terms of the litigation funding agreements the applicants entered with the Funder and the costs agreements made with Shine. Pursuant to those agreements, the Funder is responsible for 80% of professional fees, and 100% of disbursements incurred in relation to the proceeding and Shine is responsible for the remaining 20% of professional fees. The Funder's Costs referred to above are the Funder's share of the legal costs and the disbursements that it has already paid to Shine during the course of the proceeding. The Unfunded Shine Fees are Shine's unfunded fees, which are deferred and only payable to Shine upon it achieving a successful outcome in the proceeding. Due to the speculative basis for recovery, the costs agreement provided that Shine would charge an uplift fee of 25% on those unfunded fees. 71 If the amounts the applicants and the Funder propose be deducted are approved in full, then the residual Settlement Sum available for distribution to the applicants and group members is approximately $10.7 million (approximately 53%). It is appropriate for the Court to carefully scrutinise the amounts sought to be deducted from the Settlement Sum and much of the hearing time was devoted to that topic. As will be seen later in these reasons, I form the view that it would be just that the quantum of some of these deductions be reduced. 72 The basis for each of the deductions is addressed in detail at [122]-[154] of the Second Antzoulatos Affidavit, [6]-[12] of the Third Antzoulatos Affidavit, [7]-[22] of the Fourth Antzoulatos Affidavit and [5]-[10] of the Fifth Antzoulatos Affidavit, the reports of Ms Dealehr and the affidavits of Mr Conrad on behalf of the Funder. 73 My orders made on 26 July 2022 also did not approve the breakdown of the amounts to be distributed in each of the proposed instalments. Those aspects of the Settlement Distribution Scheme were reserved for further determination and approval of the Court, and the paragraphs that otherwise dealt with those matters in the Settlement Distribution Scheme (at [27]-[29]) were left marked as "placeholder". As I later outline, the terms of those paragraphs will now need to be revised to accord with these reasons. 74 The amended form of the Settlement Distribution Scheme submitted on 14 July 2022 had proposed that paragraphs [27]-[29] provide as follows: [27] Within 14 Business Days of receipt of payment of Instalment 1 as defined in clause 2.5(b)(i) of the Settlement Deed and the FY 22 Capital Raise Payment (if paid) as defined in clause 1.1 of the Settlement Deed, or within 14 Business Days following Final Settlement Approval (subject to clause 30 below), whichever is the later, the Settlement Administrator will make the following payments from it, as approved by the Court: a. first, a payment to the Funder (or to another entity at the Funder's direction) as partial reimbursement of the Funder's Project Costs in the amount of $1,783,336.82 and should the FY 22 Capital Raise Payment be paid, an additional amount of $822,739.62 as reimbursement of the Funder's Project Costs (and the amount payable in respect of Project Costs in Instalment 2 will be reduced by this amount upon receipt of this payment), as the case may be; b. secondly, should the FY 22 Capital Raise Payment be paid, a payment to the Funder (or to another entity at its direction) in the amount of $636,354.14 for part payment of the Funder's Commission (and the amount payable in respect of Funder's Commissions in Instalment 3 will be reduced by this amount upon receipt of this payment), as the case may be; c. thirdly, a payment to Shine Lawyers of $110,146.40 representing 22% of the Applicants' Remaining Costs of $500,665.48 (including 25% uplift of $100,133.09) and should the FY 22 Capital Raise Payment be paid, an additional amount equal to 18% (total 40%) of the Applicants' Remaining Costs (and the amount payable in respect of Instalment 3 will be reduced by this amount upon receipt of this payment), as the case may be; d. fourthly, an amount of $427,878.80 in respect of settlement approval professional fees and disbursements as approved by the Court; e. fifthly, an amount representing Shine's Administration Costs as approved by the Court in respect of the distribution of Instalment 1 and the FY 22 Capital Raise Payment (if paid), with Shine to first submit its costs to the Court for approval prior to distribution, by way of communication with the Associate to his Honour Bromberg J or another judge of the Federal Court as appropriate; f. sixthly, a payment of $110,000 in respect of the Applicants' Declaratory Proceedings Costs as approved by the Court; g. seventhly, to each of the Lead Applicants, the whole of the Lead Applicant Fee totalling $30,000; and h. eighthly, to Participating Group Members, an amount equal to 22% of the proportion which the Final Assessment of each Participating Group Member bears to the aggregate of the Final Assessment of all Participating Group Members and should the FY 22 Capital Raise Payment be paid, an additional amount equal to 18% (total 40%) of the proportion which the Final Assessment of each Participating Group Member bears to the aggregate of the Final Assessment of all Participating Group Members (and the amount payable in respect of Instalment 3 will be reduced by this amount upon receipt of this payment), as the case may be. [28] Within 14 Business Days of receipt of payment of Instalment 2 as defined in clause 2.5(b)(ii) of the Settlement Deed and the FY 23 Capital Raise Payment (if paid), as defined in clause 1.1 of the Settlement Deed, or within 14 Business Days following the Final Approval Order (subject to clause 30 below), whichever is the later, the Settlement Administrator will make the following payments from it, as approved by the Court: a. firstly, a payment to the Funder (or to another entity at its direction) as reimbursement of the Funder's Project Costs in the sum of $822,739.62; b. secondly, a payment to the Funder (or to another entity at its direction) in the amount of $1,852,265.60 for part payment of the Funder's Commission and should the FY 23 Capital Raise Payment be paid, an additional amount in the sum of $2,188,641 (and the amount payable in respect of the Funder's Commissions in Instalment 3 will be reduced by this amount upon receipt of this payment), as the case may be; c. thirdly, a payment to Shine Lawyers of an amount equal to 33% of the Applicants' Remaining Costs and should the FY 23 Capital Raise Payment be paid, an additional amount equal to 27% (total 60%) of the Applicants' Remaining Costs (and the amount payable in respect of Instalment 3 will be reduced by this amount upon receipt of this payment), as the case may be; d. fourthly, an amount representing Shine's Administration Costs as approved by the Court in respect of the distribution of Instalment 2 and the FY 23 Capital Raise Payment (if paid), with Shine to first submit its costs to the Court for approval prior to distribution, by way of communication with the Associate to his Honour Bromberg J or another judge of the Federal Court as appropriate; e. fifthly, an amount, if sought by LLS by re-listing the matter after 8 July 2022, and if then approved by the Court, for any Declaration Proceeding Adverse Costs: and f. sixthly, to Participating Group Members, an amount equal to 33% of the proportion which the Final Assessment of each Participating Group Member bears to the aggregate of the Final Assessment of all Participating Group Members and should the FY 23 Capital Raise Payment be paid, an additional amount equal to 27% (total 60%) of the proportion which the Final Assessment of each Participating Group Member bears to the aggregate of the Final Assessment of all Participating Group Members (and the amount payable in respect of Instalment 3 will be reduced by this amount upon receipt of this payment), as the case may be. [29] Within 14 Business Days of receipt of payment of Instalment 3 or the Remaining Balance as the case may be, as defined in clause 2.5(b)(iii) of the Settlement Deed, or within 14 Business Days following the Final Approval Order (subject to clause 30 below), whichever is the later, the Settlement Administrator will make the following payments from it, as approved by the Court: a. first, a payment to the Funder (or to another entity at its direction) in the amount of $3,647,734.40 for part payment of the Funder's Commission or otherwise the remaining balance of the Funder's Commission as the case may be; b. secondly, a payment to Shine Lawyers of 45% of the Applicants' Remaining Costs or otherwise the remaining balance of the Applicants' Remaining Costs as the case may be; c. thirdly, an amount representing Shine's Administration Costs as approved by the Court in respect of the distribution of Instalment 3 or the Remaining Balance, as the case may be, with Shine to first submit its costs to the Court for approval prior to distribution, by way of communication with the Associate to his Honour Bromberg J or another judge of the Federal Court as appropriate; and d. fourthly, to Participating Group Members, 45% (or the remaining balance as the case may be) of the proportion which the Final Assessment of each Participating Group Member bears to the aggregate of the Final Assessment of all Participating Group Members. PRINCIPLES RELEVANT TO SETTLEMENT APPROVAL 75 Section 33V(1) of the FCA Act provides that a representative proceeding may not be settled without the approval of the Court. The principles to be applied in a settlement approval application under s 33V are well-established. 76 Subsections 33V(1) and (2) of the FCA Act confer two distinct powers: first, to approve the settlement; and, secondly, if the approval is given, to approve the distribution of payments made under the settlement: see e.g. Davaria Pty Ltd v 7 Eleven Stores Pty Ltd (2020) 281 FCR 501 at [23]-[24] (Lee J, with whom Middleton and Moshinsky JJ agreed). 77 The fundamental question is whether the proposed settlement is fair and reasonable and in the interests of the group members bound by the settlement, considered as a whole. This requires consideration of whether the proposed settlement is fair and reasonable, first, as between the applicant, group members and the respondent, and second, as between the group members: see e.g. Evans v Davantage Group Pty Ltd (No 3) [2021] FCA 70 at [17] (Beach J) and the authority there cited. The Court assumes an onerous and protective role in relation to group members' interests which is not unlike the role the Court assumes when approving settlements on behalf of infants: Australian Securities and Investments Commission v Richards [2013] FCAFC 89 at [8] (Jacobson, Middleton and Gordon JJ); Thomas v Romeo Lockleys Asset Partnership [2022] FCA 1106 at [38] (Charlesworth J) and the authorities there cited. 78 Guiding considerations have been set out in many authorities and are helpfully collected in Botsman v Bolitho (2018) 57 VR 68 at [203]-[208] (Tate, Whelan and Niall JJA) where the Victorian Court of Appeal said (citations omitted): [203] It is an essential starting point to identify the settlement and its terms. It is commonplace that a deed of settlement may address more than the settlement of the claims against the defendant and will also deal with the distribution of settlement money, including to a litigation funder. The structure of sub-ss 33V(1) and (2) suggests that such payments may be distributions of money that has been paid under a settlement to which the Court has given approval under s 33V(1). Those distributions are the subject of separate Court approval under s 33V(2). [204] The question of fairness interposes itself at various levels. Most obviously, there will need to be consideration of the fairness of a proposed settlement sum. [205] The Court is being asked to approve a compromise of litigation. Inevitably, that will require an assessment of whether the plaintiff is likely to succeed in the action, the measure of damages that a successful judgment would yield, the prospects of recovery, and the expenditure in costs, time and effort that would be required to bring the proceedings to a conclusion. [206] That assessment does not involve a simple calculus but calls for matters of judgment based on imperfect knowledge and is influenced by the appetite for risk. It will be informed by the complexity and duration of the litigation and the stage at which the settlement occurs. It is important to acknowledge that it is the state of imperfect knowledge and the existence of risks that will have likely induced the settlement. It follows that those matters should be accorded a degree of prominence in any assessment of the reasonableness of the settlement. [207] Those considerations mean that there will rarely, or ever, be a single correct settlement. Strategic decisions must be factored into account but it is not the role of the Court to second guess those decisions. [208] The question of fairness will also be relevant to the distribution of the settlement sum, particularly where, as is usually the case, the group members will receive less than their claimed losses and the costs of bringing the proceeding (both in terms of legal costs and funding costs) will need to be accounted for. It follows that there will often be questions of fairness as between group members, particularly where some, but not all, of the group members have funded the litigation or where it may be necessary to apportion the settlement sum between group members based on differences in their respective claims. 79 Further, the Court's assessment as to whether the applicants and group members are likely to succeed in their claims at trial, and as to the quantum of the damages they may obtain if they do succeed, involves the exercise of judgement based on imperfect knowledge: see Prygodicz v Commonwealth of Australia (No 2) [2021] FCA 634 at [87] (Murphy J). In making an assessment as to the reasonableness of the proposed settlement the Court must take into account the appetite for risk of the applicants and/or the applicants' lawyers. 80 As Murphy J said in Kelly v Willmott Forests Ltd (in liquidation) (No 4) (2016) 335 ALR 439; [2016] FCA 323 at [74] (citations omitted): It is established that the Court should not second-guess the applicant's lawyers as to whether the settlement ought to have been accepted, or to proceed as if it knows more about the actual risks of the litigation than those lawyers. The Court takes the applicant's lawyers as it finds them, recognising that different applicants and different lawyers will have different appetites for risk. The question is whether the proposed settlement is within the range of reasonable outcomes, not whether it is the best outcome which the Court considers might have been won by better bargaining. See also Blairgowrie Trading Ltd v Allco Finance Group Ltd (Recs and Mgrs Apptd) (In Liq) (No 3) (2017) 343 ALR 476; [2017] FCA 330 at [82]-[83] (Beach J); Stanford v DePuy International Ltd (No 6) [2016] FCA 1452, at [116] (Wigney J); Prygodicz at [87]. 81 The factors stated in Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 459; [2000] FCA 1925 at [19] (Goldberg J), now reflected in the Class Actions Practice Note (GPN-CA) at 15.5, are a useful guide to the considerations relevant in deciding whether a proposed settlement is fair and reasonable. They include: (1) the complexity and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings; (4) the risks of establishing liability; (5) the risks of establishing loss or damage; (6) the risks of maintaining a class action; (7) the ability of the respondent to withstand a greater judgment; (8) the range of reasonableness of the settlement in light of the best recovery; (9) the range of reasonableness of the settlement in light of all the attendant risks of litigation; and (10) the terms of any advice received from counsel and/or from any independent expert in relation to the issues which arise in the proceeding. WHETHER THE PROPOSED SETTLEMETN IS FAIR AND REASONABLE 82 As is apparent from the description of the claim earlier in these reasons, the proceeding is complex. The proceeding has settled at a stage where the applicants were about to begin preparation of their evidence, seek the Court's determination of a dispute as to outstanding discovery documents and set down a trial date. Any trial of the proceeding would likely have been of substantial duration – in my estimation at least 2-3 weeks. If the proceeding was not settled, it seems to me that it was unlikely that it would have been ready for trial before the second half of 2023. Further, it is unlikely that any judgment in respect of the common issues would have been delivered before early 2024. With the prospect of appeals, and individual determination of group members' claims, even in the event of success at a trial of common issues, the applicants and group members would be unlikely to receive any money from the litigation until mid-2024 at the earliest. 83 As the authorities described above establish, there is no one or obvious way in which a settlement should be framed, either as between the group members and the respondent, or in relation to sharing any compensation amongst the group members. The question is whether the proposed settlement falls within a reasonable range, and is fair and reasonable as between the group members. 84 Counsel have provided an opinion that the settlement is fair, reasonable and adequate, both between the parties, and as between the group members. Counsel provide the opinion as officers of the Court rather than advocates for the applicants and group members and the opinion dealt candidly with the considerations set out in the Practice Note and other relevant considerations. 85 As is standard in an application of this kind, this opinion is the subject of a non-publication order, and it is necessary to be circumspect in these reasons in order to preserve confidentiality. That is particularly so where the opinion addresses whether the proceeding has a reasonable prospect of success, including because that analysis may prejudice the claims of any group member who chose to opt out and to bring his or her own proceeding. 86 On the basis of the Counsel Opinion and my own consideration of the issues, I have been able to make a broad but sufficiently adequate assessment of the complexity of the litigation, the risks of establishing liability on the pleaded case, the risks of establishing loss or damage, the range of a reasonable settlement in light of the best likely recovery and the range of a reasonable settlement in light of other attendant risks of litigation. 87 It is apparent that the proposed settlement represents a substantial compromise on the sum that the applicants and group members would have been awarded if they were successful in full and the cross-claims failed. The Settlement Notice issued to group members candidly disclosed this, and the reasons why the applicants' legal representatives nonetheless considered the settlement to be fair and reasonable. 88 In my opinion, having regard to the nature of the claims made in the proceeding and the substantial risks involved in establishing liability (of which I say more later); the factual complexity of the case; a comparison between the Settlement Sum and the best possible recovery; a comparison between the Settlement Sum and what might reasonably be expected to be achieved in the litigation taking into account the cross-claims and the likelihood that any loss and damage established may be off-set against monies paid by BSA to corporations associated with the applicants and group members; the 'opportunity cost' of further time and money being expended to fully litigate the matter as against the in-hand benefit of a sum in settlement; BSA's financial capacity to pay any judgment sum beyond the Settlement Sum; and other litigation risks, the Settlement Sum is within the range of reasonable outcomes and constitutes a fair and reasonable compromise of the claims of the applicants and group members. 89 I consider that the $20 million payment offered by BSA after commercial negotiation is likely to be a good result in the circumstances for the applicants and group members. I say that bearing in mind the risky nature of the litigation but, also and in particular, what the publicly available evidence indicates as to BSA's capacity to withstand a larger settlement or larger judgment. That the Settlement Sum is to be paid in instalments is not unreasonable in those circumstances. Further, if BSA successfully raises capital in certain circumstances, the quantum of the initial two instalments may be increased. 90 As between group members, I am satisfied that the settlement is fair and reasonable. There is no discrimination in the Settlement Distribution Scheme between group members according to whether group members retained Shine and/or entered into a contractual relationship with the Funder. 91 Each group member will receive that proportion of the residual Settlement Sum which their claim bears to the aggregate claims of all registered group members in accordance with the Loss Assessment Formula. I am satisfied the Loss Assessment Formula is fair and appropriate and results in a reasonable assessment of each group member's total claim. The proposed pro rata settlement distribution will thus lead to group members receiving an equal return relative to their claims after deduction of all costs allowed to be deducted from the residual Settlement Sum. 92 Further, the claims assessment process is reasonable, efficient and transparent and includes mechanisms to efficiently correct any administrative errors and review the individual assessments where there is any dispute. 93 Subject to what I say about the quantum of the deductions below, in my view the distribution proposed at paragraphs [27]-[29] of the Settlement Distribution Scheme as submitted on 14 July 2022 achieves a broadly fair division of the proceeds as between the applicants, the group members, the Funder and Shine. Group members will receive a minimum of 22% of their portion of their individual settlement entitlement in Instalment 1, a minimum of 33% in Instalment 2, and 45% (or the remaining balance) in Instalment 3. The Funder and Shine do not seek to recover in priority to group members, and the payments to them are made in roughly proportionate instalments as those to group members. This has the consequence that the Funder and Shine continue to share in the risk of non-payment by BSA of subsequent tranches of the Settlement Sum. I consider this to be appropriate and a factor in favour of the fairness and reasonableness of the proposed distribution process contemplated by the Settlement Distribution Scheme. I do not consider it to be unreasonable that the Administration Costs (in respect of the distribution of Instalment 1), Lead Applicant Fees, Settlement Approval Costs and Declaratory Proceeding Costs are deducted from Instalment 1. 94 I also note that none of those group members who objected, except Mr To, indicated that they wished to appear and make oral submissions at the settlement approval hearing, and Mr To did not in fact attend. In so far as submissions were made by the objectors, they were brief and really amounted to little more than unsubstantiated opinions. It is understandable that group members may be disappointed by the settlement, however, while I have given consideration to the objections, they do not cause me to question the fairness and reasonableness of the settlement reached between the parties. 95 I also consider the treatment of the unregistered group members to be fair and reasonable. As noted above, it is proposed that unregistered group members (who did not opt out) will not receive any distribution, but will nevertheless be bound by the settlement. I am satisfied that group members have been given clear notice of the registration process and the consequences of not registering and not opting out in the Settlement Notice. The Settlement Notice also made clear that group members could object to the proposed settlement, and provided details of how to do so. 96 The Third Antzoulatos Affidavit identifies at [16] that after 17 June 2022 (being the date group members were initially required to register) a further 48 individuals expressed an interest in registering for the settlement. I am satisfied that the Settlement Distribution Scheme provides a fair and reasonable process for determining whether late-registrants may participate in the settlement. 97 For these reasons, I consider the proposed settlement to be fair and reasonable as between the parties and as between the group. 98 It is for the above reasons that I made orders on 26 July 2022 to approve the settlement pursuant to s 33V(1) of the FCA Act and to approve the Settlement Distribution Scheme on the basis that paragraphs [27]-[29] thereof will be the subject of further consideration and approval. It is to that further consideration to which I now turn. PROPOSED DEDUCTIONS FROM THE SETTLEMENT SUM Funder's Commission 99 I will deal first with the question of the Funder's commission payment. A common fund order (CFO) is sought calculated at 27.5% of the Settlement Sum to produce a commission payment of $5.5 million. No party queried my power to make such an order on settlement pursuant to s 33V(2) of the FCA Act if I was so minded. In this case, no alternative order was sought by the applicants or the Funder for the making of a funding equalisation order. 100 The Court may make a CFO at settlement approval pursuant to s 33V of the FCA Act: see Davaria at [41]-[42] (Lee J, with whom Middleton and Moshinsky JJ agreed). The power to make such orders in the context of settlement approval is relatively well established: see e.g. Evans; Uren v RMBL Investments Ltd (No 2) [2020] FCA 647; Webster (Trustee) v Murray Goulburn Co-Operative Co Limited (No 4) [2020] FCA 1053; McKay Super Solutions Pty Ltd (Trustee) v Bellamy's Australia Ltd (No 3) [2020] FCA 461; Clime Capital Ltd v UGL Pty Ltd [2020] FCA 66. 101 The real question is whether, in the exercise of the Court's discretion, the proposed CFO constitutes an order that, in the circumstances of the case, is "just" within the meaning of s 33V(2) of the FCA Act: Court v Spotless Group Holdings Ltd [2020] FCA 1730 at [80]. 102 Whether a Court should approve a CFO, and in what amount, is a question to be guided by factors such as those non-exhaustively set out in Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191 at [80] (Murphy, Gleeson and Beach JJ) which include: (1) whether the funding commission rate was agreed by sophisticated class members and the number of such class members who agreed; (2) the information provided to class members as to the funding commission; (3) a comparison of the funding commission with funding commissions in other Pt IVA proceedings and/or what is available or common in the market; (4) the litigation risks of providing funding in the proceeding, assessed without hindsight bias, and recognising that the funder took on those risks at the commencement of the proceeding; (5) the potential quantum of adverse costs exposure that the funder assumed, recognising that assumption of risk was done at the commencement of the proceeding; (6) the legal costs expended and to be expended, and the security for costs provided, by the funder; (7) the amount of any settlement or judgment, and the proportionality of the commission bearing in mind the risks assumed by the funder; (8) any substantial objections made by class members in relation to any litigation funding charges; and (9) class members' likely recovery "in hand" under any pre-existing funding arrangements. 103 In my view, it is appropriate to make a CFO. The Funder advanced funding to all group members in the open class, and it is appropriate to allow a return by reference to the settlement produced for all those group members, whether registered or unregistered. 104 The applicants and group members in this proceeding were given notice of the intention to seek a CFO via the Opt Out Notice approved and distributed in August 2021. The Settlement Notice approved in May 2022 quantified the amount sought in funding commission as $5.5 million. I am prepared to infer that these notices were understood by group members, and that they registered to participate in the settlement (or did not register as the case may be) on the understanding that the applicants would seek an order to pay the Funder's commission from the Settlement Sum. In respect of those group members who entered costs agreements and funding agreements, those agreements expressly provided that the applicants were to seek a CFO. 105 As previously stated, a small number of objections were received. Those objections do not specifically engage with whether a CFO should be made. 106 The more difficult question is whether the CFO proposed by the Funder is "just" and in particular whether the proposed commission rate is appropriate. For those reasons given by Beach J in Blairgowrie at [120]-[122] it is appropriate for the Court to set a commission rate or, to label the exercise differently, determine the share of the proceeds of the settlement that should be made available to the Funder. That exercise is largely a forensic exercise which is dependent upon the adequacy of the information available to the judge, but as with the other legal contexts described by Beach J at [121], "the judge has to do the best he or she can on the evidence available, albeit incomplete or imperfect". 107 I have been guided by the observation of the Full Court in Money Max at [82] that it expected that the courts: …will approve funding commission rates that avoid excessive or disproportionate charges to class members but which recognise the important role of litigation funding in providing access to justice, are commercially realistic and properly reflect the costs and risks taken by the funder, and which avoid hindsight bias. 108 I also respectfully agree with the observations made by Murphy J in Spotless at [82], there quoting Beach J in Kuterba v Sirtex Medical Limited (No 3) [2019] FCA 1374 at [12], that the approval of funding commission rates should not become a "race to the bottom" and that funding rates should provide an appropriate reward for the risk undertaken by a litigation funder. 109 The assessment I have made has had regard to each of the factors outlined in Money Max but has concentrated in particular on what, in the circumstances of this case, would be a fair reward to the Funder for the risks the Funder assumed. An assessment of that kind may well be informed by funding commissions applied in other class action proceedings as demonstrated by what is available or common in the market and also by the rates of commission allowed by courts in making CFOs. For the reasons I will outline shortly, I have gained some assistance from the available information about those considerations which I treat as contextual benchmarks. I have gained more assistance from assessing the specific circumstances of this case in which the Funder has put its capital at risk with the legitimate expectation that the risk taken should be fairly rewarded. That has involved an evaluation of the extent to which the Funder invested or committed to investing its capital in the litigation and the extent of the litigation risk to which that capital was exposed. I have then taken into account proportionality in two ways. I have endeavoured to find a rate which would be reasonably proportionate to the risk born by the Funder and secondly I have taken into account what the litigation could have and has achieved for the applicants and for group members. By those means, I have sought to strike a rate which fairly rewards the Funder for the risk it assumed in the particular circumstances of this case. 110 The submissions made by the Funder in support of the Court approving a commission rate of 27.5% noted that under the funding agreements the applicants agreed that the Funder would be entitled to a commission of 30% of recoveries where those recoveries occurred more than 18 months after the commencement of the proceeding. Whilst I accept that the agreed rate is relevant to my consideration, I have not found it of much assistance in the absence of a compelling basis for concluding that it would be fair and equitable to apply the agreed rate to group members. The material put before me by the Funder as to the process it utilised to decide (i) whether to fund and (ii) what commission to charge, did not instil much confidence that a well-reasoned, commercially sophisticated approach was taken. I would infer, in the circumstances, that the 30% commission rate determined upon was largely driven by the Funder setting the maximum rate that was thought to be achievable. There is no evidence that the applicants, through their lawyers, actively pursued an improved rate by exploring alternatives. 111 The Funder submitted that the contractual rate agreed to was indicative of the funding market at the time the risk was taken on. By reference to a survey of what was said to be "the market rates for class action litigation", the Funder submitted that in that market rates vary from 20% to 35% and that the rate here sought by the Funder sits comfortably within that range. The Funder placed significant reliance upon that justification but there are a number of reasons why I find the submission unpersuasive. 112 First and foremost, the survey and similar material relied upon by the Funder deals with a different segment of the class action funding market to that which I consider is applicable to an employment class action of which this proceeding is an example. I will return to explain why shortly. Second, there is a danger that a range of rates may be heavily skewed by an outlier result at either or both ends of the range. More reliable information, including as to what may be considered as the ordinary range of rates, is likely to be provided by the median or average rate. Third, in so far as the Funder's submission should be taken to rely on the midpoint of the range it primarily referred to, the material before me does not support a finding that the average commission rate for funded class actions was 27.5% at the time the funding agreements were made. Fourth, great caution needs to be taken with 'headline' rates comparisons. Some rates are given as a percentage of the gross settlement, others as a percentage of the net settlement. There are of course many other variables, not the least of which is the extent of the potential reward that the funder's investment may reap. A 25% commission on an investment of $1 million in a case potentially worth $100 million, is a very different investment to a case potentially worth only $10 million. Likewise, a 25% commission on a risky $1 million investment because the case being funded has a low chance of success, is a very different investment to that in a case very likely to succeed. All of which suggests that average commission rates should only be used as a single indicator amongst a range of relevant indicia. 113 In asserting a range of 20% to 35%, the funder referred to the Second Antzoulatos Affidavit which in turn referred to (but did not provide) two reports of Professor Vince Morabito, a well-known expert on the subject of class action litigation. One of those two reports was produced by Mr Conrad on behalf of the Funder – "An Evidence-Base Approach to Class Action Reform in Australia: Common Fund Orders, Funding Fees and Reimbursement Payments" (31 January 2019). That report dealt with data covering the period to the end of 2018. It does not state a range of rates for commissions available in any particular market for litigation funding. It assessed the impact of funding fees on the settlement proceeds that have been made available to class members in the settlements surveyed. Professor Morabito concluded that 26.87% of all the settlement proceeds generated in all funded class actions surveyed were applied towards the funding fees of the funder supporting the litigation. However, he then suggested that a more accurate method of determining the impact of funding fees is by looking at the median funding commission rate as a share of proceeds which he concluded to be at 25%. That calculation related only to the "funding commission or fee" of litigation funders and "not the reimbursements for expenses incurred". 114 The most recent survey to which I was referred also focused on the share of settlement proceeds provided to litigation funders. A June 2020 report of the Law Council of Australia entitled "Litigation funding and the regulation of the class action industries" presented to the Commonwealth Parliamentary Joint Committee on Corporations and Financial Services (Law Council Report) (16 June 2020), surveyed Australian class action proceedings in the period from 2001 to 2020. It found that the average funding share of total settlement proceeds over the period was 26.9%. 115 Particularly informative, is a review conducted by Professor Morabito of all CFOs made in federal class actions at the settlement stage between 27 October 2016 and 3 December 2019. That survey showed that the median funding commission rate allowed equalled to 21.9% of the gross settlement sum: see Professor Vince Morabito, "Submission to the Parliamentary Joint Committee on Corporations and Financial Services on Litigation Funding and Regulation of the Class Action Industry" (10 June 2020). 116 It must be recognised, however, that each of the average or median rates just discussed is likely to be skewed by data which is no longer current. Those rates reflect the higher commission rates that were being charged prior to the introduction of CFOs in 2016 and prior to increased competition in the funder market: see Law Council Report at [17] and Spotless at [113]. Furthermore, the data upon which those surveys are based is likely to substantially, if not entirely, concern a particular kind of class action. To take the only breakdown available in the material provided to me as being illustrative of the general position, the Law Council Report (at Attachment A) shows that of the 40 or so settlements which involved a funder that were taken into account in that report's formulation of the average funder's share of proceeds, 37 concerned 'shareholder', 'investor', 'financial product' or like proceedings and three were concerned with damage to property. 117 The absence of any reference to employment class actions, by which I mean class actions in which claims are made relying upon the FW Act, is probably reflective of the fact that class actions of that kind are of very recent origin. There are a number of reasons for thinking that funding commission rates charged and/or allowed in employment class actions should be significantly lower than the rate appropriate for 'shareholder' or other commercial class actions. 118 The primary reason why, in my view, a funder's share of the proceeds of a settlement ought to be lower in an employment class action than in a commercial class action, is that applicants in an employment class action have the advantage of the "no costs" jurisdiction provided for by s 570 of the FW Act. By reason of that advantage, there is a far lower risk in an employment class action of a funder being required to meet adverse costs orders or provide security for costs. The lower financial risks assumed by the funder should be reflected in both the commission rates charged by funders as well as any assessment of a fair return to the funder made in the context of the Court making a CFO. 119 Section 570 of the FW Act imposes a limitation on the circumstances in which an adverse order for costs may be imposed upon an applicant (as well as a respondent) in an FW Act proceeding. Relevantly, an adverse costs order may only be made where the proceeding has been instituted vexatiously or without reasonable cause (s 570(2)(a) of the FW Act) or where the Court is satisfied that a party's unreasonable act or omission has caused another party to incur costs (s 570(2)(b) of the FW Act). 120 It is well settled that the limitation upon adverse costs orders imposed by s 570 of the FW Act is driven by a legislative policy of providing applicants with access to justice by ensuring that the fear of an adverse costs order does not discourage litigants from pursuing good claims. With reference to authority, I made that observation in Mutch v ISG Management Pty Ltd (No 2) [2020] FCA 954 at [7]. At [8], I further observed that the occasions upon which the limited discretion to award costs under s 570 of the FW Act will be exercised are likely to be exceptional. 121 As White J said in Augusta Ventures Limited v Mt Arthur Coal Pty Limited (2020) 283 FCR 123 at [107], it is important not to lose sight of the legislative policy which underlies s 570 of the FW Act which "also reflects an attempt to address the underlying inequality of position commonly experienced by applicants in litigation for the enforcement of industrial entitlements". I also respectfully agree with his Honour's observations at [127] that "the circumstances (if any) in which an applicant in proceedings in relation to a matter under the FW Act should be ordered to provide security for a respondent's costs are likely to be exceptional". 122 The advantage provided by s 570 of the FW Act to a litigant is not directly provided to a litigation funder. Section 570 of the FW Act only expressly deals with the circumstances in which an order may be imposed upon a party and does not directly impede the imposition of an adverse costs order upon a litigation funder or of an order requiring security for costs to be provided by a funder. However, to the extent that a litigation funder has indemnified a litigant against an adverse costs order, the funder will benefit from the exceptionality of such an order being made. To the extent that a funder may directly be the subject of a costs order, the funder's potential exposure may be ameliorated indirectly by s 570 of the FW Act. 123 As White J's reasoning in Augusta demonstrates (see at [129]), the rationale of s 570 of the FW Act is likely to be undermined by requiring a litigation funder to provide security for costs in circumstances where the applicant whose proceeding the funder is supporting, would not be so required. For that reason the circumstances in which a funder is likely to be required to provide security for costs should also be regarded as likely to be exceptional. 124 Whether, despite no adverse costs order being made against an applicant, a litigation funder should be ordered to pay the respondent's costs of an applicant's unsuccessful proceeding, was considered by Bromwich J in Duck v Airservices Australia (No 3) [2021] FCA 304. His Honour determined that it was not in the interests of justice to make a costs order against the funder (at [69]) recognising that in different circumstances such an order may have been made (at [65]). 125 His Honour's approach was premised on whether or not it was in the interests of justice to make a costs order against the funder: at [69]. Justice Bromwich recognised that the legislative policy behind s 570 of the FW Act was to encourage access to justice and that imposing a costs risk on a litigation funder which would be passed on to litigants is likely to have a deterrent effect which would indirectly subvert the purpose of s 570 of the FW Act: see at [45]-[48]. Those observations are consistent with my own, made in Mutch at [13], to the effect that litigation funders facilitate access to justice and that their funding of litigation under the FW Act is, in that respect, aligned with the policy objective which underlies s 570 of the FW Act (at [13]). At [14], I referred to the deterrent effect and noted further that the carving out of asymmetrical exceptions (asymmetrical because no costs order can ordinarily be made against an unsuccessful respondent) may also serve to undermine the regime that s 570 of the FW Act seeks to promote. In Duck at [51], Bromwich J considered that the absence of a costs risk for the respondent was a relevant consideration in determining whether a costs order should be made against a litigation funder. 126 Nevertheless, as Bromwich J said in Duck at [54], the considerations raised by s 570 of the FW Act are not determinative of whether the interests of justice favour a costs order being made against a funder. His Honour considered that the legislative regime set out in s 570 of the FW Act "may be an important consideration in a given case", at [40] and that "s 570 at least sufficiently changes the costs landscape to deny there being any starting point in favour of, or against, costs being awarded against funders in [FW Act] class action cases", at [39]. 127 That a litigation funder may bear the costs of a successful respondent remains a real risk for a funder funding an employment class action. However, that risk must be considered to be very significantly diminished as compared to its prevalence in class action proceedings which are not conducted in a "no costs" jurisdiction. That, I think, is particularly so where the litigation cannot be characterised as having principally furthered the funder's commercial imperatives but was a vehicle for providing access to justice that would not otherwise have been obtained and where, as White J identified in Augusta at [139]-[142], the public interest in facilitating the enforcement of the regulatory regime established by the FW Act has been effectively engaged. 128 The marginal risk that a litigation funder will be ordered to provide security for costs and the much diminished risk that the funder will be ordered to pay the legal costs of a respondent, substantially differentiate the risk to which a funder is exposed in an employment class action to that ordinarily faced by a funder in a commercial class action. 129 There are other features of an employment class action which, in terms of striking an appropriate reward for the funder, are relevant. In Augusta at [136], White J referred to the character of an employment class action which at [137] he broadly identified as the "pursuit of a claim for basic industrial entitlements." His Honour sought to distinguish as inapt a characterisation of the worker and the funder as being engaged in "a common enterprise" in the way that the relationship between an applicant and a funder in a commercial class action may well be characterised. At [136] his Honour said this: The character of the claims being pursued by the applicant should also be kept steadily in mind. A claim for wages in respect of work performed does not ordinarily have the same speculative or contingent quality of many Pt IVA actions. Neither of the present two actions is "a piece of commercial litigation", to adopt the description of Allsop CJ and Middleton J in Madgwick v Kelly [2013] FCAFC 61; (2013) 212 FCR 1 at [77] in respect of litigation commenced by investors whose investments made with anticipated taxation advantages had proved unsuccessful. 130 There are other common features of litigation under the FW Act which should also be taken into account because they are likely to have an impact on the demand for litigation funding and thus on the funding commission rates funders can charge in the applicable market. 131 The FW Act obliges "national system" employers to provide particular terms and conditions of employment to their employees and to afford particular "workplace rights" to those employees. The Act facilitates enforcement and compliance with those obligations by providing a civil remedy regime which includes the imposition of civil penalties and the making of orders for compensation: see generally Chapter 2, Part 3-1 and Chapter 4 of the FW Act. Employment class actions are usually concerned with claims that employees have been underpaid or not otherwise provided with the terms and conditions of employment that their employer was obliged to provide. Claims under the "General Protections" provisions (Part 3-1) in relation to "workplace rights" may also be expected to become the subject of employment class actions. 132 In relation to each of those categories of claims (amongst others), the FW Act provides standing for affected employees to sue. However and of significance, the Act also provides standing to both an "employee organisation" and an "inspector": see s 539. An "inspector" is the Fair Work Ombudsman (FWO) or a person appointed by the FWO: see ss 700 and 701 and the definition of "inspector" in s 12 of the FW Act. By reason of the standing given to both unions and the FWO, those organisations have the capacity in their own right, to sue and effectively obtain relief for affected employees including through orders for compensation for any loss or damage suffered. 133 In Australia, unions have been provided with that regulatory or 'policing' function by federal industrial legislation for many decades. That function has been exercised extensively by unions and probably accounts for the vast bulk of the many thousands of proceedings instituted by unions under the FW Act and its predecessors. Often such proceedings will make claims in relation to multiple employees. The Australian Education Union v State of Victoria (Department of Education and Early Childhood Development) (2015) 239 FCR 461, which involved the claims of over 50,000 employees, comes to mind as a pertinent example of the capacity of a proceeding of that kind to both utilise class action techniques (the use of sample employees and the determination of common questions at an initial trial) and of the capacity to achieve the kind of broad settlement commonly a feature of class action litigation. Unions also commonly institute a proceeding as a 'test case', where, after a court resolution of a claim of one or a few employees there will usually be a settlement negotiated for similar claims relating to many other employees. 134 An enforcement role for an 'inspector' has also been a long-standing feature of federal industrial law. In recent years, the FWO has been an active litigant in both this Court and in the Federal Circuit and Family Court of Australia pursuing claims of underpayment for many groups of hundreds if not thousands of employees. An example of litigation of that kind currently before this Court is litigation between the FWO and Woolworths Group Limited which concerns the alleged underpayment of employees and which is to be run on a sample of 32 identified employees on the basis that the parties to the litigation believe that they will then be able to determine the claims made in relation to some 19,000 employees: see Fair Work Ombudsman v Woolworths Group Limited (Case Management) [2022] FCA 376 at [2] and [5]. 135 I respectfully agree with the observations made by Charlesworth J in Thomas at [46] that the purpose of the provisions providing standing to the FWO and to employee organisations, includes the desirability that employees have access to affordable justice with respect to their workplace rights. As her Honour went on to observe, litigation of the kind I have been discussing is ordinarily brought without those employees for whose benefit the proceeding is instituted being liable to pay legal costs. Further, no commission of any kind will be extracted from any settlement sum or other compensation achieved for the benefit of the employees in question. 136 There are therefore mechanisms which facilitate access to justice for employees which rival the access provided by funded employment class actions. The rivalry is real and apparent. There are at least four sets of proceedings in this Court at the moment, where a class action and either one or multiple proceedings brought by a union or by the FWO are in competition over the same or substantially the same FW Act claims relating to the same or substantially the same groups of employees. 137 Unlike what I apprehend to be the position for commercial class actions, litigation funders also face competition for employment class actions from law firms willing to conduct class actions on a "no win no fee" basis. Under an arrangement of that kind made between a litigant and his or her lawyer, the litigant will not be liable to pay for the lawyer's legal services unless the claim which is litigated is successful. Whilst 'no win no fee' arrangements are not unique to employment litigation, they are and have been for many decades a significant feature of such litigation and unsurprisingly so. From an employee's point of view, and armed with the benefit of s 570 of the FW Act, a 'no win no fee' arrangement provides substantial certainty that the employee will not be out-of-pocket by reason of the litigation. 138 In the relevantly short experience of employment class actions in Australia, 'no win no fee' arrangements have proved to be a significant alternative to funded class actions (on my assessment of current and recent proceedings in this Court, about 25%). From an employee's perspective and speaking generally, arrangements of that kind ought to provide a more affordable source of access to litigation than a funded class action. There is no funder's commission to be taken out of the proceeds of the litigation although an 'uplift fee' may be charged by the lawyers. The capacity of lawyers to charge 'uplift fees' is, however, regulated. To use the position in Victoria as an example, the maximum 'uplift fee' that may be imposed is 25% of the legal costs under a conditional costs agreement excluding disbursements: see s 182 of the Legal Profession Uniform Law Application Act 2014 (Vic). 139 All of that is not say that there is no role for funded employment class actions. Neither unions nor the FWO, alone or in combination, are likely to facilitate all of the access to justice which employees may require in order to vindicate their entitlements. A large segment of the workforce is not unionised and I would infer that both unions and the FWO have limited resources which may be applied to funding litigation. There is, therefore, a role for funded class actions in FW Act litigation but a diminished role and thus a diminished demand for the services of litigation funders. 140 All of those considerations strongly suggest that, on average and being mindful that case specific considerations should dominate the analysis, a significantly lower funding commission is likely to be justifiable for an employment class action than may be the case for a commercial class action. It may well be the case, based on the limited information put before me, that for commercial class actions the average funding commission rate is now in the low to mid 20s. On that basis it may be supposed that, on average, funding commission rates for employment class actions will fall well short of 20%. But I hesitate to give that observation great significance in determining the justifiable rate in this case. As I have tried to emphasise, it is but one indication in an assessment which should be primarily grounded in the specific circumstances of the case in question. 141 I turn then to the specific considerations. 142 The funding agreements provided that upon the Funder electing to provide funding for the proceeding, the Funder would pay the (i) "Project Costs", (ii) any adverse costs ordered in favour of a respondent and against either the applicants or the Funder and (iii) provide any security for costs. 143 The "Project Costs" were defined broadly but relevantly comprised the legal costs and disbursements associated with work undertaken to investigate whether a proceeding should be instituted (investigation costs) and the legal costs and disbursements incurred in the conduct of the proceeding, save for the unfunded fees and disbursements (called "Remaining Costs" and "Remaining Costs for Project Investigation") that Shine were to be responsible for. The Funder's obligation to meet those legal costs and disbursements was, subject to the Funder's sole discretion, capped at a total of $4.7 million inclusive of the investigation costs. 144 The term "Project Costs" also included "any Adverse Costs Insurance Premium" which was defined to mean any sum paid by the Funder to purchase ATE Insurance. The funding agreements did not oblige the Funder to take out any such insurance but as I will further detail the Funder did so at a cost of $689,700. 145 There can be no doubt that the Funder assumed substantial risk in relation to a very large sum of money in agreeing to fund the proceeding. The $4.7 million by way of the applicants' foreshadowed legal costs was put at very substantial risk if it turned out that the proceeding could not be settled or won. As previously stated, the case was both legally and factually complex. The main issue raised by the proceeding engages the legal dichotomy between an employee and an independent contractor, in relation to which the common law has always struggled to provide a clear dividing line. Litigation in that legal landscape may be regarded as inherently risky. Furthermore in so far as some guidance has been given by prior authority, the particular factual circumstances of this case lacked an obvious legal precedent from which some comfort could be gained that the case enjoined prospects of success. It was likely to be strenuously defended if it ran and there were concerning issues about recoverability even if the litigation was otherwise successful. 146 The Funder should be fairly rewarded for taking that very substantial risk. 147 I do not, however, consider that much more than $4.7 million should be regarded as having been put at risk by the Funder, including because I consider that the Funder ought not be rewarded for imprudent expenditure which the Funder not only seeks reimbursement of but also seeks to include in the base sum said to be put at risk and for which a reward is due. 148 The material before me explaining the basis upon which the Funder decided to fund the proceeding includes a lawyer's report prepared for and considered by the Funder's "Case Assessment Committee" (CAC) which assessed whether funding should be provided and, on 30 April 2019, decided to recommend the proceeding for funding. That material shows that the Funder was well aware of s 570 of the FW Act and that the Funder decided to fund the proceeding on the basis that, in the "no costs" jurisdiction in which the proceeding would be brought, costs would only be awarded in exceptional circumstances and that it was unlikely that the Funder would be required to provide security for costs. For the reasons already given, that understanding was a reasonable assessment of the extent of the risk which the Funder faced in relation to an adverse costs order made against the applicants or an order requiring that security for costs be provided. 149 There was, I accept, some additional risk that an adverse costs order may be made directly against the Funder. That risk seems either to have been overlooked in the deliberations of the Funder or regarded as insignificant. It is not clear. 150 What does seem clear on the material before me, is that the far lower risk environment provided by the "no costs" jurisdiction in which the proceeding was to be conducted was not taken into account when the Funder purchased the ATE Insurance that it did. 151 Mr Conrad has deposed that the Funder routinely seeks ATE Insurance for the cases it funds as a way to manage its adverse costs risks and that the Funder wished to be fully protected against adverse costs "regardless of how likely that adverse costs exposure was". That evidence was given to justify the reimbursement out of the Settlement Sum of the premium of $689,700 paid for ATE Insurance as well as the Funder's position that that sum should be regarded as funds put at risk by the Funder in relation to which the Funder should be provided with a return. 152 In my view, the Funder has not established that either reimbursement or a return on the $689,700 of expenditure for the ATE Insurance premium is justified. 153 The ATE Insurance taken out in relation to this proceeding was the standard insurance cover ordinarily taken out by the Funder in relation to proceedings it funds under a portfolio policy the Funder holds with its insurer. I would infer that the premium charged under that standard cover is calculated by reference to the risk exposure of a funder in funding a proceeding in a "costs" rather than in the "no costs" jurisdiction provided for by the FW Act. Counsel for the Funder said as much when the Court was informed that the premium charged takes no account of s 570 of the FW Act. 154 To justify both the reimbursements sought as well as the return which is sought, the Funder would, at the outset, need to satisfy me that the expenditure on the ATE Insurance premium was prudent. It has failed to do that. 155 Insurance premiums are set by reference to the risk of the insured event occurring. As Counsel for the Funder correctly conceded, the risk of an adverse costs order was here "far diminished" as compared to the risk in a "costs" proceeding. Yet, the Funder paid a premium which common sense would suggest was likely to be far higher than it should have been, based as it was on the undiminished risk that the insured event would occur. 156 There were really only two answers given by the Funder to the proposition that the expenditure was imprudent. First, it was speculated that an alternative and bespoke insurance may not have been available in the market or that, if available, bespoke insurance may not have been cheaper. However, despite the opportunity to make good those suggestions, no evidence was tendered in support of them. 157 Second, it was said that it was not imprudent to take out the ATE Insurance because the law was unsettled as to the extent of the risk faced by a litigation funder of an adverse costs order being imposed upon a funder. The Funder relied upon Turner v Tesa Mining (NSW) Pty Limited [2019] FCA 1644 in which Lee J concluded that s 570 of the FW Act did not preclude a litigation funder being ordered to provide security for costs, as the vehicle which had raised the uncertainty. Turner was published on 8 October 2019. Turner was overturned by Augusta which was published on 10 November 2020. 158 There are a number of answers to that submission but fundamentally, I do not accept that the Funder was motivated by any uncertainty raised by the judgment in Turner. The evidence shows that under the portfolio insurance in question, the declaration which incurred the premium in question was organised by the Funder on 12 September, nearly a month prior to the publication of Turner. 159 To my mind the evidence supports the inference that the ATE Insurance was, as Mr Conrad's evidence suggests, "routinely" taken out without any consideration as to whether the cover in question was either appropriate or necessary for the particular context in which this proceeding was to be conducted. There is nothing wrong in the Funder wishing to be fully protected against adverse costs "regardless of how likely that adverse costs exposure was". There is, however, a substantial problem with the idea that group members should now effectively pay for a level of insurance not properly calibrated to that which was reasonably required. 160 There was no material provided, nor even a submission made by the Funder as to what would have been a properly calibrated insurance premium. I should not speculate as to that matter including because other reasons as to why no reimbursements should be approved, make that speculation unnecessary. 161 Where a funder defrays its risk of providing an indemnity to an applicant in relation to an adverse costs order which may be made against an applicant, the funder cannot charge for both taking the risk and defraying the risk. Only one or the other can be justified. To claim both would be to double-dip or as Murphy J said in Spotless at [96] "to have it both ways": see further Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd (No 3) (2020) 385 ALR 625; [2020] FCA 1885 at [32] (Lee J) and Evans at [84] (Beach J). 162 Here, the Funder has sought to justify "the commission component of the deductions in favour of the Funder for which approval is sought" on, inter alia, the risk of "exposure to adverse costs". Having done that, the Funder cannot legitimately seek either the reimbursements of the costs of defraying that risk or seek that those costs be counted as part of the capital which the Funder put at risk. 163 In arriving at a proportionate share of the proceeds for the Funder, I have taken into account that the Funder risked exposure to adverse costs. For the reasons already canvassed, that risk was substantially diminished as compared to the equivalent risk in a proceeding conducted in a "costs" jurisdiction. The return to the Funder for taking that risk must also be substantially diminished from that which might otherwise have been appropriate if the proceeding had been conducted in a "costs" jurisdiction. 164 The share of proceeds sought by the Funder of $5.5 million are described in the Funder's submission as constituting 2.11 times the Funder's "Project Costs". I would infer that the Funder itself regards the rate of return on invested capital as an appropriate assessment tool and that the rate of 2.11 is considered a fair return by the Funder upon its investment. 165 A number of authorities have utilised the rate of return on invested capital as an appropriate tool of analysis. I too consider it a useful benchmarking tool. 166 The rate of return on costs expended should be calculated by reference to the funder's project costs which are allowed rather than those costs which have been expended. The Funder's calculation of a 2.11 rate of return is based upon Funder's project costs of approximately $2.6 million. The approximation given at the time the Funder made its submission was said to be necessary because of some uncertainty as to what deductions were allowed by Ms Dealehr. 167 The deductions that I do not allow are dealt with in the reasons that follow. I do not allow the ATE Insurance Premium of $689,700. I also do not allow some of the legal costs claimed. Unfortunately, the material before me does not allow me to make a precise calculation of what is the Funder's share of those legal costs which are being disallowed. I will deal with the need for further information to be provided later but for present purposes, in order to give an illustration and doing the best I can, I will proceed on the presumption (likely to be fairly accurate) that the Funder's share of the disallowed legal costs is $50,000 and that therefore the Funder's project costs which are allowed are $1.86 million. 168 On that basis, a return of 2.11 times the allowed project costs would result in a commission of $3.924 million. However, a two-times return on allowed project costs seems to me to be more proportionate to the risk taken by the Funder and more proportionate to what the capital invested by the Funder achieved for the applicants and group members. A two-times multiple would result in a funder's commission of $3.732 million and a commission rate of 18.66%. 169 A two-times rate of return is close to the rate of return on capital invested which the Funder has itself here sought. In my view, it would align reasonably well with the legitimate expectation of the Funder as to commission that would be allowed on a CFO in circumstances where what was achieved for the applicants and group members constitutes about 45% of what, on a conservative estimate, the Funder believed was achievable when the decision to fund was made. With that in mind, I consider the rate I am prepared to approve to be commercially realistic and not so low as to disincentivise funders from continuing to provide litigation funding in employment class actions. 170 A funder's commission of 18.66% sits comfortably with the observation I have made about where the average commission rate in employment class action may be found. Although it is at what would seem to me to be the higher end of that scale, that is justified for the following reasons. 171 First, as I have sought to emphasise this was not some barely defensible run-of-the-mill underpayments claim. Even without the benefit of the hindsight provided by the High Court's judgments in WorkPac Pty Ltd v Rossato (2021) 271 CLR 456 or Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 398 ALR 404; [2022] HCA 1, it was always a risky proceeding legally, complex factually and there were significant issues about recoverability. That high level of risk was of course ameliorated by the prospect that commercial good sense would avoid a contested proceeding, as it has, but the risks for the Funder were nevertheless real and substantial. 172 Accordingly, whilst some group members may understandably be of the view that the settlement and, in particular their share thereof does not reflect a just result, their focus, which I hope will be informed by these reasons, needs to shift from what was achieved by the proceeding to what was realistically achievable by the proceeding. In terms of that which was realistically achievable, the share of the settlement left in the hands of the applicants and group members (approximately 64%) should be fairly regarded as not ideal but good in the circumstances rather than inadequate and poor in the circumstances. The result achieved by the Funder's investment is far closer to success than it is to failure and helps to fortify my view that approximately $3.732 million represents a just and proportionate share of the proceeds which the Funder should receive in return for the substantial risk it has taken. 173 I have also taken into account that to some extent the Funder has provided additional benefits to group members. For instance by indemnifying the applicants for any adverse costs ordered in relation to the Declaration Proceeding (even though by reason of s 570 of the FW Act no such order was made). Furthermore, the Funder does not insist on being given priority in relation to the intended distribution of the Settlement Sum as between the Funder and the applicants and group members. ATE Insurance 174 For reasons the reasons given above, particularly at [152]-[162] I will not allow recovery of the ATE Insurance Premium. Legal costs and disbursements prior to settlement 175 Judicial oversight of legal costs is an important part of the Court's role in protecting class members' interests. In Petersen Superannuation Fund Pty Ltd v Bank of Queensland Limited (No 3) [2018] FCA 1842 at [88], Murphy J explained: In class actions the requirement for judicial supervision of legal costs proposed to be charged is obvious because: (a) the applicant's solicitor is in a more dominant position vis-a vis a class member than in a solicitor-client relationship in individual litigation; (b) class members are commonly not told about the mounting costs as they are incurred and they suffer a significant information asymmetry in that regard; (c) it is not necessary for class members to retain the applicant's solicitor and commonly they do not, yet they are usually made liable for a pro rata share of the costs; (d) even where class members retain the applicant's solicitor they do not provide instructions as to the running of the class action and have no control over the quantum of costs, yet they are usually made liable for a pro rata share of the costs; (e) class members are unlikely to pay much attention to legal costs because they are usually only payable upon success and from the successful outcome; (f) it is usually not until after settlement is achieved that class members are told the total costs claimed, but they are not told (and it is commonly very difficult to accurately estimate) what their pro rata share of the costs will be; and (g) the Court has a protective role in relation to class members' interests. 176 The Court must be satisfied that the legal costs sought to be recovered from group members are, in all the circumstances, reasonable and proportionate: Lenehan v Powercor [2020] VSC 82 at [9]-[12] (Nichols J). 177 "Proportionality" is concerned with the relationship between the costs incurred and "the value and importance of the subject matter in issue": Petersen at [130] (Murphy J), citing Skalkos v T & S Recoveries Pty Ltd (2004) 65 NSWLR 151 at [8] (Ipp JA, Grove and Sheller JJA agreeing); Lenehan at [11]. It involves a forward-looking assessment at the time the work is performed, concerned with the benefit reasonably expected to be achieved, not the benefit actually achieved: Williams v Ausnet Electricity Services Pty Ltd [2017] VSC 474 at [110] (Emerton J). 178 In Blairgowrie at [181], Beach J explained proportionality in the following terms (emphasis added): …what is claimed for legal costs should not be disproportionate to the nature of the context, the litigation involved and the expected benefit. The Court should not approve an amount that is disproportionate. But such an assessment cannot be made on the simplistic basis that the costs claimed are high in absolute dollar terms or high as a percentage of the total recovery. In the latter case, spending $0.50 to recover an expected $1.00 may be proportionate if it is necessary to spend the $0.50. In the former case, the absolute dollar amount as a free-standing figure is an irrelevant metric. The question is to compare it with the benefit sought to be gained from the litigation. Moreover, one should be careful not to use hindsight bias. The question is the benefit reasonably expected to be achieved, not the benefit actually achieved. Proportionality looks to the expected realistic return at the time the work being charged for was performed, not the known return at a time remote from when the work was performed; at the later time, circumstances may have changed to alter the calculus, but that would not deny that the work performed and its cost was proportionate at the time it was performed. Perhaps the costs claimed can be compared with the known return, but such a comparison ought not to be confused with a true proportionality analysis. Nevertheless, any disparity with the known return may invite the question whether the costs were disproportionate, but would not sufficiently answer that question. 179 However, as Murphy J noted in Petersen at [135], there are inherent uncertainties in class action litigation which mean that the determination of what the applicant's lawyer's might reasonably expect to achieve in the litigation may not be as straightforward as in ordinary inter partes litigation. His Honour referred to the explanation he had given in Caason Investments v Cao (No 2) [2018] FCA 527 (Caason (No 2)) at [152] as follows (emphasis added): In circumstances where the applicant's solicitors cannot be expected to be completely accurate in assessments they make at the commencement of a case about the level of risk, the likely aggregate claim value and the likely quantum of legal costs, the proper question in relation to proportionality of legal costs is what settlement or judgment amount it was reasonable for the applicant's solicitors to expect would be achieved by class members, not what they actually achieved. It is true that the applicant's solicitors know more about the risks of the case than the class members, but that does not mean they should not be paid costs reasonably incurred in pursuing a benefit for class members which they reasonably expected to be achievable. Nor does it mean that the applicant's solicitors should be punished when, by reason of the strenuous defence of the proceedings, the costs blow out. 180 Upon the Court determining the quantum of reasonable legal costs in a proceeding there can be no real question that it is appropriate to order that amount be deducted from the settlement sum and paid to reimburse the funder or paid to the applicants' lawyers. It is fair and reasonable that group members that will enjoy the benefits of a settlement should pay a proportionate share of reasonable court-approved legal costs incurred to obtain and then distribute the settlement. Such orders are routinely made in settlement approval applications: see Prygodicz at [333] (Murphy J) and the authorities there cited. 181 Turning now to the legal costs and disbursements incurred prior to the settlement of this proceeding. 182 The evidence is that from September 2020 to April 2022, Shine's legal costs were independently reviewed on a monthly basis by Ms Dealehr. In this period, Ms Dealehr was engaged by the Funder to provide her independent opinion as to the reasonableness of Shine's legal costs. 183 Ms Antzoulatos' evidence is respect of this process was that each month she personally reviewed each work in progress entry on the matter and removed entries that she did not consider to be properly billable. A draft invoice was then prepared by Shine and provided to the Funder and Ms Dealehr for review. Ms Dealehr provided a report in respect of each draft invoice. Ms Antzoulatos reviewed each of Ms Dealehr's reports and where a time entry was queried, reviewed that time entry and considered whether it should be removed before Shine issued a final invoice to the Funder for payment. The evidence is that as a consequence of this process, deductions totalling $4,575.40 were applied to the applicants' legal costs before they were billed to the Funder. 184 Ms Antzoulatos deposed that Ms Dealehr had also been engaged by the Funder to review the reasonableness of Shine's invoices in respect of the Mutch Proceeding referred to earlier. Ms Antzoulatos' evidence was that as a result of the queries raised by Ms Dealehr, Shine's invoices in the Mutch Proceeding were reduced significantly, and as such, by the time Ms Dealehr was engaged in the present proceeding, Ms Antzoulatos had become familiar with Ms Dealehr's advice in respect of costs which were properly billable, and took this into account in preparing Shine's draft invoices. 185 Ms Dealehr was then engaged by Shine on 23 May 2022 to prepare an expert costs report addressing the reasonableness of the legal costs incurred in the proceeding. An amended letter of instruction was issued to Ms Dealehr on 24 June 2022. 186 The cumulative effect of Ms Dealehr's evidence is that in her opinion the following legal costs are fair and reasonable (noting a minor $40 miscalculation in relation to the total amount allowable which has been here corrected): STAGES PROFESSIONAL FEES ALLOWABLE DISBURSEMENTS ALLOWABLE TOTAL AMOUNT ALLOWABLE LEGAL COSTS AND DISBURSEMENTS PRIOR TO SETTLEMENT Pre-commencement costs incurred from January 2019 to August 2020 $524,091.05 $124,354.68 $648,445.73 Costs incurred from September 2020 to 21 June 2022 $1,477,308.40 $407,536.44 $1,884,884.84 Uplift fee $96,257.04 $96,257.04 Total $2,097,656.49 $531,891.12 $2,629,587.61 187 In making the above assessment Ms Dealehr applied various discounts to the fees claimed in addition to those that had been applied in the contemporaneous review she had undertaken for the Funder. Shine's professional fees were discounted to reflect Ms Dealehr's view that, in accordance with the terms of the funding agreement, Shine's rate increases as at 1 January 2021 should be limited to 5%. Ms Dealehr applied various other discounts to Shine's fees in the total sum of $7,910.49. Ms Dealehr also discounted senior counsel's fees by $14,905 on the basis that senior counsel's daily rate was higher than would generally be allowed on taxation, and junior counsel's fees by $3,262.88 on the basis that the fees were not sufficiently particularised. 188 In the Third Antzoulatos Affidavit, Ms Antzoulatos expresses her disagreement with the additional deductions applied by Ms Dealehr. 189 Save in respect of the pre-retainer costs to which I will return, I am satisfied that each of the proposed deductions from the Settlement Sum for legal costs and disbursements is reasonable, having regard to the expert evidence of Ms Dealehr. Ms Dealehr is a highly experienced costs consultant who has reported upon the costs incurred in great detail, and expressed the view that they are reasonably incurred. To the extent that there was a conflict between the expert opinion of Ms Dealehr and the opinion of Ms Antzoulatos, I prefer and adopt Ms Dealehr's analysis. The only exception to this is in relation to the additional discount applied to junior counsel's fees, which I do not consider to be justified. 190 In respect of the legal costs incurred prior to the settlement of the proceeding, I take some reassurance from the fact that Ms Dealehr was appointed by the Funder to audit Shine's costs as they arose to ensure costs were legitimately claimed. That involvement reduced the costs, albeit by a relatively small amount. I accept that may be explained by Ms Dealehr's involvement in the Mutch Proceeding and the adjustments that Shine made to its billing practices as a consequence of that experience. Pre-commencement and pre-retainer costs 191 The proceeding was commenced on 24 July 2020. The costs incurred prior to the commencement of the proceeding (pre-commencement costs) and in particular that proportion thereof incurred prior to costs agreements being made between Shine and the applicants (pre-retainer costs) bear some scrutiny. That is primarily so because of the Court's protective role in relation to the interests of group members. 192 Both the Funder and the applicants seek that the professional fees and disbursements be allowed for pre-commencement costs incurred from January 2019 to August 2020. As stated above, Ms Dealehr has opined that the pre-commencement costs of $648,445.73 should be allowed. Of that sum, $338,788.31 make up the pre-retainer costs (which includes professional fees and disbursements), as deposed by Ms Antzoulatos in the Fifth Antzoulatos affidavit. There is no issue that the pre-commencement costs which are not pre-retainer costs should be allowed. Those costs total $309,657.42. 193 As to whether the pre-retainer costs should be allowed in the making of a CFO, there is a threshold issue concerning whether the applicants were contractually obliged to pay those costs and an issue as to whether, irrespective of any contractual entitlement, those costs should be allowed in any event. There is also a subsidiary issue as to whether if pre-retainer costs are allowed, they should be allowed in full including that proportion thereof that related to work utilised by both the Funder and Shine to assist them in determining whether it was commercially viable for them to fund the proceeding. I will turn to deal with the subsidiary issue first. 194 It is convenient to commence this discussion by providing a brief chronology of relevant events: (1) In January 2019, Shine commenced investigating a representative claim against BSA; (2) In February 2019, Shine approached the Funder about funding the proceeding; (3) On 30 April 2019, the Funder's CAC recommended that the proceeding be funded; (4) On 6 May 2019, the Funder decided to fund the proceeding; (5) On 24 and 26 September 2019, Mr Bradshaw executed a costs agreement with Shine and then a funding agreement with the Funder; (6) On 27 September and 2 October 2019, Mr Uren executed a costs agreement with Shine and then a funding agreement with the Funder; and (7) On 24 July 2020, the proceeding was commenced. 195 A question not considered by Ms Dealehr but which I need to consider is the extent to which the pre-retainer costs should be effectively borne by the group in circumstances where, as I would infer, some of those costs were incurred for purposes including the purpose of the Funder and Shine investigating and assessing whether the class action was commercially viable and whether each should take on the risk of funding it. 196 In Modtech Engineering Pty Limited v GPT Management Holdings Limited (No 2) [2013] FCA 1163, Gordon J was faced with the same issue. Her Honour disallowed the costs in question stating at [42]: That work was conducted by Slater & Gordon prior to obtaining signed LCAs and LFAs from group members and was primarily directed to identifying whether a class action would be commercially viable for both Slater & Gordon and CLF. Although group members ultimately obtained a derivative benefit from that work, it would be unreasonable for group members to bear that cost. 197 A different approach was taken by Murphy J in Endeavour River Pty Ltd v MG Responsible Entity Ltd [2019] FCA 1719 at [16]-[17], where his Honour allowed the costs incurred in preparing a 'funding proposal' for the funder the primary purpose of which was to allow the funder to assess the merits of the claims available to group members. His Honour accepted that the 'funding proposal' was also used for the benefit of group members but stated that even if the proposal had only been used so as to engage a litigation funder to fund the proceeding, it was his view, that the costs of the 'funding proposal' should be allowed. 198 I respectfully agree with the proposition at the heart of the approach taken by Gordon J in Modtech, that it would be unreasonable for group members to bear the costs of legal work primarily directed to identifying whether funding a class action was commercially viable for the funder and/or the lawyers promoting the class action. However, where there is a derivative benefit to group members which is substantial rather than peripheral, I think the better view is that the benefit provided to group members should be reflected in the way the proceeds of a settlement are shared as between group members and those who facilitated that settlement by contributing to the funding of the class action. 199 For the purpose of deciding whether or not to fund the proceeding, the Funder relied upon investigative work which Shine provided and charged for as part of what is now claimed as a reimbursement of pre-retainer costs. The Funder was provided by Shine with an extensive "brief to funder" prepared and revised on several occasions containing witness statements, the advice of senior and junior counsel as well as, it would appear, substantial information about the extent of the potential class and the extent of the loss suffered by that class. So much is apparent from the description of legal work in Shine's tax invoice and the material considered by the Funder's CAC to which some reference has been made already. 200 The Funder therefore directly benefited from the investigative work but now seeks reimbursement out of funds which would otherwise go to group members, for the entirety of the cost of that investigatory work. Without that work, it would have been necessary for the Funder to conduct its own investigations at very substantial cost. Shine is also likely to have benefited from that investigative work in deciding to contribute to the funding of the proceeding by agreeing to absorb 20% of the legal costs. As I have recognised already, ultimately group members also benefited from that work and in my view the benefit was likely to be substantial and not merely peripheral. 201 As the investigatory work in question was of substantial benefit to the applicants and group members on the one hand and of benefit to the Funder and to Shine on the other, the costs of that work ought to be shared. Doing the best I can in the circumstances and on the premise that I determine the threshold issue favourably to the Funder and to Shine, and bearing in mind the extent to which that cost was borne by each of the Funder and Shine, it seems to me it would be just to allow 50% of that cost to be reimbursed out of the proceeds of the settlement. 202 Further, it would seem reasonable in the circumstances to regard the pre-retainer work performed prior to the Funder's CAC recommending that the proceeding be funded on 30 April 2019 as the work product from which the Funder and Shine benefited. Accordingly, I would limit the disallowance to 50% of the pre-retainer costs incurred between January 2019 and 30 April 2019 (inclusive) (pre-30 April 2019 costs). For that period, on the evidence before me, the pre-retainer costs (including professional fees and disbursements) amounted to approximately $110,012. I will allow $55,006 to be reimbursed out of the proceeds of the settlement to the Funder and to Shine. As I further detail at [236] below, further assistance from those parties will be required in order that each is reimbursed in accordance with the proportion of the pre-30 April 2019 costs borne by each. 203 I turn then to the threshold issue. 204 The applicants' submission in support of the reimbursement to the Funder and to Shine of pre-retainer costs, referred me to the costs agreements in the form in which they were made when originally executed. Each costs agreement is relevantly in the same terms. It appears that later amendments were made but that those amendments are of no consequence to the issue I am here addressing. In so far as it is necessary to do so, I will therefore refer to the original terms of the costs agreements. It is necessary to keep in mind, as is noted above, that at or about the time of the making of the costs agreements each of the applicants also entered into funding agreements with the Funder. Each costs agreement refers to the corresponding funding agreement. 205 To give some broad context, both the costs agreements and the funding agreements contemplate the commencement of a class action by the applicants against BSA and that Shine will provide legal work in furtherance of that proceeding having made a costs agreement with each applicant. Further, that a proportion (80%) of professional fees and 100% of disbursements will be initially incurred by the Funder with Shine initially bearing a proportion (20%) of the legal costs referred to as "remaining costs". Further, that those costs will not be paid by the applicants initially but, should the proceeding succeed, that the applicants' share of those costs be paid by way of a reimbursement to the Funder and Shine out of each applicant's share of the proceeds of the settlement or resolution of the proceeding. 206 Ordinarily, agreements made about the provision of a service are made in relation to services not yet provided and which are to be provided under and pursuant to the terms of the agreement being made. If the scope of the agreement is intended to extend to services already provided it may be expected that, particularly in a comprehensive written agreement, so much would be said expressly and not be left to be inferred. There is no express reference made in either the costs agreements or the funding agreements to any legal services performed by Shine prior to the commencement of either such agreements. No such services are expressly included within the scope of any of those agreements. For the following reasons and in the absence of any relevant evidence as to the surrounding circumstances known to all parties, I would not infer any such mutual intention. I reject the construction contended for by the applicants and the Funder that the applicants are contractually bound to reimburse to either the Funder or to Shine any costs incurred prior to the commencement of the costs agreements, those costs being what I have referred to as the pre-retainer costs. For reasons that will become apparent, it is convenient to commence the discussion by construing the terms of the funding agreements. 207 The funding agreements require the Funder to "pay the Project Costs": cl 5.2. The "Project Costs" include what are called the costs of the "Project Investigation" which I would characterise as pre-commencement costs. However, on the preferable construction of the funding agreements, Project Costs do not include any costs incurred prior to the commencement of the funding agreements. 208 Each funding agreement "commenced" on the date it was executed: cl 2. The funding agreements relevantly define "Project Costs" as follows: Project Costs means the external costs incurred at any time up to the conclusion of this Agreement in respect of or associated with investigating, prosecuting and/or resolving the Claims and/or the Relevant Claims, comprising: (a) the costs involved in the provision of any security for costs; (b) any Adverse Costs Insurance Premium; (c) any Adverse Cost Order; (d) the Legal Costs and Disbursements associated with the Project Investigation; (e) the Legal Costs and Disbursements associated with the Proceeding; (f) the Legal Costs and Disbursements associated with any Alternative Dispute Resolution Process; (g) any other costs, expenses and disbursements incurred by LLS in relation to the Relevant Claims and this Agreement; and (h) any GST payable as a result of the above costs or expenses being incurred. For clarity, Project Costs does not include Remaining Costs or Remaining Costs for Project Investigation. 209 The term "Project Investigation" is referred to at (d) of the definition of Project Costs. That term is also defined. It means "work undertaken prior to and in contemplation of Proceedings" and includes investigating the evidentiary basis for the claims in prospect amongst other work which is non-exhaustively described by the definition. Those non-exhaustive descriptors would clearly cover the kind of investigatory work that Shine conducted prior to making the costs agreements with the applicants if it were the case that, work performed prior to the commencement of the funding agreements, fell within the scope of those agreements. 210 However, the better view is that the funding agreements do not deal with pre-commencement or project investigation work performed by Shine prior to the commencement of the funding agreement. That is so because the funding agreements do not contemplate that any Project Investigation work will have been conducted prior to the commencement of the agreement. The intended prospective nature of the Project Investigation work is apparent from Recital D which provides: [The Funder] is prepared to conduct the Project Investigation and subject to the outcome of the investigation, pay the Project Costs pursuant to the terms of this Agreement. 211 Furthermore, each of the provisions which refer to the conduct of a "Project Investigation" and which provide some temporal indication as to the scope of the work covered, does so in prospective terms as work to be undertaken rather than as work already undertaken at the time of the commencement of the funding agreement. For instance, cl 5 contemplates that the "Investigative Work" will precede an election by the Funder (not yet made on commencement) to fund the proceeding and contemplates that if and when such an election is made, the Funder will become obliged to pay the "Project Costs". Clause 4.1 also speaks of the Project Investigation in prospective terms providing the relevant applicant's authority and consent "for the [Funder] to, at [the Funder's] discretion, conduct the Project Investigation or any part thereof. Further (at cl 4.2) that the Funder "may, in its absolute discretion, instruct [Shine] to conduct the Project Investigation or any part thereof" and if it "elects to do so then … it will pay [Shine's] Legal Costs and Disbursements incurred for the Project Investigation…". 212 I appreciate that the preamble to the definition of "Project Costs" includes the words "incurred at any time up to the conclusion of the Agreement". Read naturally and in context, including the context just referred to, the temporal scope intended by the preamble begins upon the commencement of the agreement and ends upon its termination. 213 I commenced by construing the funding agreements and evaluating whether those agreements obliged the applicants to reimburse the legal costs incurred. I did that because it is the funding agreements that govern the way in which that obligation is addressed in each of the costs agreements. That is done by cl 5 of each of the costs agreements which relevantly provides: 5. The Funding Agreement and Remaining Legal Costs 5.1 Shine confirms that it is aware of the terms and conditions of the Funding Agreement entered into, or contemplated, between You and LLS Fund Services. 5.2 Pursuant to the Funding Agreement and the Terms of Engagement, LLS Fund Services will pay the Costs of the Proceedings which includes 80% of the Professional Fees and 100% of the disbursements that are reasonably incurred pursuant to this Costs Agreement. 5.3 You agree that LLS Fund Services will be reimbursed for all of those fees, costs and disbursements paid by LLS Fund Services from the Settlement Sum or Outcome Sum in accordance with Clause 8 of the Funding Agreement. 5.4 Shine will incur the Remaining Legal Costs on a speculative basis. This means that Shine will not charge You for the Remaining Legal Costs unless there is a Successful Outcome. Shine and You agree that Shine's total entitlement under this clause cannot exceed the Settlement Sum. … 214 The term "Funding Agreement" as utilised in cl 5 is defined to mean the agreement between the applicant and the Funder pursuant to which the Funder has agreed to pay "the Costs of the Proceedings". It is apparent from cl 5.1 that the agreement contemplates that the Funding Agreement may not have been entered into but intends to pick up the "contemplated" agreement as the "Funding Agreement". I say that, because there is some oddity in the reference made at cl 5.3 to "Clause 8 of the Funding Agreement" in circumstances where cl 8 of the funding agreement does not deal with the subject of fees, costs and disbursements as the terms of cl 5.3 suggests that it does. Nevertheless, I would conclude that in referring in cl 5 to "the Funding Agreement", the parties intended to refer to the terms of the funding agreement made by the Funder with each applicant. 215 Accordingly, what each applicant agreed to pursuant to cl 5.3 was that the Funder will be reimbursed for those fees, costs and disbursements paid by the Funder in accordance with the terms of the funding agreement. As, for the reasons stated, the funding agreements did not deal with any services provided or costs incurred for any pre-commencement or investigative work performed prior to the commencement of those agreements, no obligation to reimburse any such costs was imposed by the costs agreements upon either of the applicants. 216 Rather than focussing upon cl 5.3, which in my view is the clause which imposes a legal obligation upon the applicants, the applicants' submission focussed upon cl 5.2, which does not. All that cl 5.2 does is purport to set out for context (wrongly as it turns out) what arrangement is made by the funding agreement in relation to the costs to be paid by the Funder. 217 If it were the case, as the applicants' submission must be read as suggesting, that the costs chargeable to the applicants upon a successful outcome are the "Costs of the Proceedings" as defined by the costs agreements, to succeed on that argument the applicants would nevertheless need to overcome the plain words of the preamble to the definition of the term "Costs of Proceedings", which define that term to mean "those costs and expenses incurred at any time from the date of commencement up to the conclusion of this Agreement". The term "date of commencement" is defined as the date the costs agreement is executed by the applicant. The efforts made by the applicants' submission to make good the proposition that the temporal scope provided by the preamble is inapplicable were unpersuasive. 218 It is convenient, to next address the other obligation imposed upon each applicant by cl 5 of each costs agreement. Although cl 5.4 could be in clearer terms, I accept that it imposes an obligation upon the applicant to pay to Shine the "Remaining Legal Costs" should there be a "Successful Outcome" meaning, relevantly, a resolution of the proceeding by a settlement where compensation or damages are payable to the applicant. 219 The phrase "Remaining Legal Costs" is defined and is of importance. In the original costs agreements executed by the applicants, that phrase means "those Legal Costs that have not been paid by [the Funder] pursuant to the Funding Agreement". The term "Legal Costs" utilised in that definition is itself defined to mean "Professional fees and disbursements taken together and incurred in performing the Legal Work and the Preliminary Work". The two defined terms used in the definition of "Legal Costs" are each defined as follows: "Legal Work" means any advice and any other legal services which Shine consider reasonably necessary to prosecute the Proceedings. "Preliminary Work" means Legal Work undertaken by Shine in investigating and developing the Claims that is of common benefit to You, and Group Members prior to execution of this Costs Agreement, the Funding Agreement or the Terms of Engagement. 220 The applicants contended that cl 5.4 permits recovery by Shine of pre-retainer costs not paid for by the Funder because that clause contemplates that the "Remaining Legal Costs" will include the "Preliminary Work" – namely work done before the entry into the costs agreement. 221 The submission pays insufficient attention to the definition of "Remaining Legal Costs" which is not referring globally to costs incurred and not paid by the Funder, but refers specifically to costs "that have not been paid by [the Funder] pursuant to the Funding Agreement" (emphasis added). 222 In the revised versions of the costs agreements, which were each executed on 1 and 4 July 2022, the term "Legal Costs" is replaced by the term "Professional Fees" which means Shine's professional fees incurred in performing the Legal Work. The definition of "Legal Work" set out earlier is maintained, with the following additional words: …and includes any advice and any other legal services which Shine consider reasonably necessary in respect of and incidental to the Declaratory Proceeding. Legal Work includes the stages of Legal Work described in Schedule 1 of the Litigation Funding Agreement which you signed and LLS Fund Services countersigned in September 2019, all work necessary to prosecute those stages and includes Book Build. 223 However, the analysis above at [221] equally applies, as the definition of "Remaining Legal Costs" in the revised costs agreements still refer specifically to professional fees "that have not been paid by [the Funder] pursuant to the Funding Agreement" (emphasis added). 224 For the reasons given above, the funding agreements do not contemplate that the Funder will incur liability for any legal services provided prior to the commencement of those agreements. The pre-retainer costs are costs referrable to services of that kind but they are not costs contemplated by the funding agreements and cannot be costs that have not been paid by the Funder pursuant to those agreements. Simply put, the pre-retainer costs do not meet the description given by cl 5.4 of the costs chargeable to the applicants. 225 I note that the funding agreements do not use the term "Remaining Legal Costs". The closest applicable term which is used is "Remaining Costs for Project Investigation". That term relevantly refers to the 20% of legal costs incurred by Shine for the purpose of the "Project Investigation". But as earlier outlined, the Project Investigation work contemplated by the funding agreements is work to be undertaken after the commencement of the funding agreements and would not encompass the work to which the pre-retainer costs relate. 226 I am not therefore satisfied that there is a contractual basis sourced in the costs agreements which would provide a reason for requiring group members to contribute to the payment of the pre-retainer work performed by Shine. However, I am persuaded by the submissions made by the Funder that there need not be a contractual basis of that kind to justify the proposed contribution in question. The Funder contended, correctly in my view, that the equitable nature of CFOs meant that it is well within the purpose for the making of such orders that the Funder be paid, or more correctly that the Funder be reimbursed out of the proceeds of the settlement, for the work the Funder has financed for the benefit of the applicants and group members. As to the equitable nature of a CFO the Funder referred to BMW Australia Ltd v Brewster (2019) 269 CLR 574 at [111] (Gageler J) and to Davaria at [29]-[30] (Lee J). The Funder further relied on the observation of Lee J in Klemweb Nominees Pty Ltd (as trustee for the Klemweb Superannuation Fund) v BHP Group Ltd (2019) 369 ALR 583; [2019] FCAFC 107 at [130] that a CFO at settlement is: consistent with equitable principles that a person who benefits from another's efforts in producing a fund is obliged to provide appropriate value in return, as is reflected in the underlying principle that it would be inequitable for the person who has created or realised a valuable asset, in which others claim an interest, 'not to have his or her costs, expenses and fees incurred in producing the asset paid out of the fund or property created'. 227 Whether or not the Funder was obliged under the funding agreement to fund 80% of the pre-retainer costs and 100% of the disbursements and whether or not either under the funding agreements or the costs agreements, Shine was obliged to fund 20% of the professional fees, the fact is that each did fund the pre-retainer costs in that proportion and that the work so funded was work which was done for the benefit of the applicants and group members and, I would infer, provided substantial benefit to those persons. It would be consonant with the purpose of the making of a CFO including because it would be just, for the pre-retainer costs incurred by the Funder and by Shine to be reimbursed out of the proceeds of the settlement in full, save for that portion of the pre-retainer costs which I have only allowed as to 50%, above at [202]. Uplift fee 228 As set out above, Shine seeks an "uplift" in respect of those costs that were unfunded and which have been deferred during the currency of the proceeding. I am satisfied on the basis of the evidence before me that there has been sufficient compliance with the relevant regulatory requirements in relation to the charging of such fees, they are not unreasonable given the overall quantum of the fees, and they should be allowed. I note that Shine does not seek to charge any uplift fee on their professional fees for this approval application, or in relation to the Declaratory Proceeding. I also note that the uplift fee allowed by Ms Dealehr included fees which I have partially disallowed for work done prior to 30 April 2019. As I detail at [236] below the assistance of the parties is required to calculate the precise amount that I will allow. Settlement Approval Costs and Declaratory Proceeding Costs 229 Following the approval hearing and on 26 July 2022, Ms Dealehr filed the Third Dealehr Report, a further report addressing the reasonableness of the Settlement Approval Costs and the Declaratory Proceeding Costs. In summary, Ms Dealehr opined that the following costs are allowable: STAGES PROFESSIONAL FEES ALLOWABLE DISBURSEMENTS ALLOWABLE TOTAL AMOUNT ALLOWABLE LEGAL COSTS AND DISBURSEMNTS OF SETTLEMENT APPROVAL APPLICATION Total $158,800.55 $121,066.43 $279,866.98 LEGAL COSTS AND DISBURSEMENTS OF DECLARATORY PROCEEDING Total $74,449.32 $56,815.22 $131,264.54 230 In arriving at the above assessment, Ms Dealehr discounted the costs claimed in respect of the settlement approval application by $20,696.87, and the costs claimed in respect of the Declaratory Proceeding by $3,561.25. Having regard to the expert evidence of Ms Dealehr, I am satisfied that it is appropriate to allow these costs as assessed by Ms Dealehr. 231 I also note that Shine did not bill the Funder for any of the Settlement Approval Application Costs (incurred after 31 March 2022) or the Declaratory Proceeding Costs and will not be seeking an uplift on these costs. The costs being sought by Shine for the Declaratory Proceeding have been determined to be reasonably incurred by Ms Dealehr and I am satisfied that they ought to be deducted from the Settlement Sum in the amount set out above. Lead applicants' fees 232 I am content for the Lead Applicants' Fees totalling $30,000 (being $15,000 to each of Mr Bradshaw and Mr Uren) to be deducted from the Settlement Sum. I am satisfied that it is appropriate to allow these deductions having regard to the work each of the named applicants has done as described at [125]-[134] of the Second Antzoulatos Affidavit, including giving instructions regarding the commencement, carriage and settlement of this proceeding. Administration Costs 233 I approve the deduction of the Administration Costs in the Sum of $122,500, which Shine agreed to reduce from $300,000 after the settlement approval hearing on the basis that Shine, as the Administrator, have liberty to apply to the Court for an additional payment should there be a substantial disparity between the amount of the costs allowed and the costs incurred. This approach should be reflected at paragraph [27] of the amended Settlement Distribution Scheme paragraphs to be submitted by the parties. 234 Finally, it is proposed that the deductions dealt with above be borne by all of the registered group members, not only those registered group members who entered into funding agreements. This is conventional and appropriate. Although the unfunded group members are not in a contractual relationship with the Funder, and have not signed costs agreements with Shine, it is appropriate that they bear a proportion of the costs incurred in bringing the proceeding, in circumstances where it has produced the proposed settlement and they stand to benefit from that settlement. 235 Further to the above, in approving the deduction of the legal costs and disbursements from the Settlement Sum, I take into account that the Settlement Notice informed group members of their right to object to the proposed settlement including in relation to the reasonableness of the legal costs proposed to be deducted from the proposed settlement. The proposed deductions are therefore "just" for the purposes of s 33V(2) of the FCA Act. Summary of deductions allowed 236 Further assistance from the parties is required in order to formulate the precise amounts that will be distributed to the Funder, Shine, the applicants and group members in accordance with the terms of paragraphs [27]-[29] of the Settlement Distribution Scheme, which my orders require the parties to revise so that those terms accord with the distribution of the Settlement Sum contemplated by these reasons. That assistance is primarily required because the material before me does not allow me to accurately determine the share of the disallowed legal costs referrable to the Funder and the share referrable to Shine. It is for that reason that I am unable to specify in the table which follows the precise figure for the Funder's Commission and for Shine's uplift fee. The further information required will be available to Shine and to the Funder and I would expect that by agreement those parties will arrive at precise calculations which accord with these reasons and are then reflected in the revised terms of paragraphs [27]-[29] of the Settlement Distribution Scheme which my orders require the parties to provide. TABLE OF DEDUCTIONS ALLOWED FROM SETTLEMENT SUM Deduction Amount (incl. GST) Funder's Commission To be calculated but approximately $3.732 million Legal costs Pre-30 April 2019 costs $55,006 Other legal costs until settlement (including junior counsel's fees not allowed by Ms Dealehr) $2,465,128 Settlement approval application costs (1 April 2022 to 12 July 2022) $522,489 Uplift fee To be calculated but less than $96,257 Declaratory proceeding costs $131,265 Administration costs $122,500 Lead applicants' fees $30,000 NON-PUBLICATION AND OTHER ORDERS 237 I made interim non-publication orders on 12 July 2022, before the settlement had been approved, preventing the disclosure of certain material filed by the parties in support of the settlement approval application to non-parties or to other parties (Interim Orders). The Interim Orders were made under s 37AI(1) of the FCA Act which empowers the Court to make a "suppression order or non-publication order…without determining the merits of the application [for such an order]" until the application is determined. The Interim Orders were expressed to be "until further order of the Court, on the ground that it is necessary to prevent prejudice to the proper administration of justice under s 37AG(1)(a) of the FCA Act." 238 I sought submissions from the parties on the form of non-publication orders sought if the settlement were to be approved and on 20 and 21 July 2022, the parties provided submissions on their proposed orders. On 5 August 2022, my Chambers wrote to the parties, inter alia, informing them of my preliminary determinations of their applications for non-publication orders and asking for any further submissions from the parties in response. On 12 August 2022, the Funder provided their further submissions which, as discussed further below, the applicants partially adopted for the purpose of their own additional application for non-publication of certain material. BSA did not provide any further submissions. 239 In considering whether to make the non-publication orders sought, I have had regard to the relevant provisions governing the power to make such orders and the grounds upon which they may be made which are set out in Part VAA of the FCA Act and particularly ss 37AE, 37AF and 37AG. In Caason (No 2) at [8] Murphy J noted: It is wrong to assume that confidentiality or non-publication orders will be routinely or automatically made. Part VAA of the Act provides that the starting point for consideration of such orders, and it is mandatory under s 37AE for the Court to take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. The Court must be satisfied that the order is necessary "to prevent prejudice to the proper administration of justice" (s 37AG(1)(a)), and "necessary" is a "strong word": Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [30]. 240 It is also useful to note that a person seeking an order under s 37AF bears the onus of persuading the Court to make the order and the onus has been described as "a very heavy one": see C7A/2017 v Minister for Immigration and Border Protection (No 2) [2020] FCAFC 70 at [13] (Katzmann, Wigney and Abraham JJ). Applicants' proposed non-publication orders 241 By their submissions filed on 20 July 2022, the applicants sought non-publication orders under ss 37AF and 37AG of the FCA Act in relation to four matters if the settlement were approved. First, the applicants sought orders to prevent the disclosure of certain paragraphs of the Second Antzoulatos Affidavit which related to information relevant to aspects of the applicants' personal lives. These proposed orders sought to prevent publication of this material to non-parties and to BSA on the basis that it was "personal information not previously disclosed to…other parties". Second, the applicants sought orders in relation to notes taken by Mr Bradshaw in connection with tasks undertaken for the proceeding over which the applicants claim legal professional privilege. Third, the applicants sought to prevent the publication of the Counsel Opinion which was prepared on a confidential basis and not disclosed to BSA. Fourth, the applicants sought orders to prevent the disclosure of certain personal details of group members which were contained in several documents filed by the applicants and only disclosed to the Court and the Funder. 242 The applicants did not specify under which ground(s) of s 37AG they sought non-publication orders. I have determined not to grant the orders sought over the first matter on the basis that none of the grounds under s 37AG of the FCA Act are met. The mere fact that the information is said to be of a personal nature and has not been disclosed to other parties is insufficient to meet any of the grounds under s 37AG(1). It is not clear under which ground(s) the applicants seek to justify the orders sought in relation to this material, however, I can infer that they are likely sought under s 37AG(1)(a). To the extent that the applicants' submissions suggest that the disclosure of this material would cause the applicants embarrassment, it is well established that mere embarrassment is not sufficient to meet the high standard that s 37AG(1)(a) imposes: see Ogawa (formerly Ms PD) v President of the Australian Human Rights Commission (Pseudonym) [2022] FCAFC 160 at [27] (Rares, Perry and Hespe JJ). 243 In relations the second to fourth matters above, having regard to the mandatory consideration in s 37AE and the grounds under s 37AG(1), I am satisfied that it is necessary to prevent prejudice to the proper administration of justice for this material not to be published or disclosed other than in so far as it has been necessary to refer to that material in these reasons in order to safeguard the public interest in open justice: see Liverpool City Council v McGraw-Hill Financial, Inc (now known as S&P Global Inc) [2018] FCA 1289 at [109] (Lee J) at [120]. BSA's proposed non-publication orders 244 BSA made submissions on 21 July 2022, with an accompanying affidavit sworn by Arno Becker of the same date seeking orders over certain documents, including in relation to what Mr Becker deposed was non-publicly available commercially sensitive information regarding BSA's finances and business model, provided by BSA to the other parties and the Court, for which BSA sought to prevent disclosure to non-parties. 245 It is not necessary to set out at length the principles which apply to applications under s 37AF with respect to commercially sensitive information, which are set out in a large number of judgments of this Court. However, it is useful to note that commercial sensitivity can be an appropriate basis for suppression or non-publication orders. The relevant principles were conveniently summarised by the Full Court (Perram, Pagone and Bromwich JJ) in Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47 at [4], the Court there endorsing principles previously expressed by Perram J in Motorola Solutions, Inc v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 at [8]-[9]. Relevantly, the Court observed that: It might be thought that the mere protection of commercial-in-confidence information, which is essentially what Hytera seeks in this case, fits less comfortably within the statutory words 'necessary to prevent prejudice to the proper administration of justice'. But this Court has held in a number of cases that commercial sensitivity can be an appropriate basis for making a suppression or non-publication order: see Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 235 per Bowen CJ; Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [23] per Greenwood J; Cyclopet Pty Ltd v Australian Nuclear Science and Technology Organisation [2012] FCA 1326 at [7] per Jacobson J; Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430 ('Air New Zealand (No 3)') at [35]; Australian Competition and Consumer Commission v Origin Energy Electricity Ltd [2015] FCA 278 ('Origin Energy') at [148] per Katzmann J; ASE16 v Australian Securities and Investments Commission [2016] FCA 321 at [93] per Markovic J. There are cogent reasons for this which have variously been described in those cases, but they are generally associated with preserving the integrity of the litigious process, likely to be jeopardised if commercial competitors could benefit from court ordered production of trade secrets by parties to a suit. That said, it is important to recall that the order must be necessary to protect the administration of justice. It can readily be imagined that a carte blanche approach to applications for s 37AF orders for which commercial confidentiality is claimed as a basis, would jeopardise the interest the public has in being able to access court documents under the Federal Court Rules 2011 (Cth) or to engage meaningfully with reasons published by the Court. As I have explained at [6(6)] of these reasons above, the safeguarding of that interest as a primary objective of the administration of justice is a mandatory consideration for the Court. Particularly is that so in cases such as the present, where the Agreement, and its interpretation, may become a central plank in the ultimate resolution of the proceeding, and thus, to the intelligibility of future reasons delivered by the Court. 246 BSA submits that most of the information over which it seeks non-publication orders was "provided by BSA to the applicants (a) on a confidential basis, (b) for the purposes of mediation, and (c) subject to confidentiality undertakings." Having regard to the evidence before me, particularly Mr Becker's affidavit of 21 July 2022 and exhibit VA-17 to the Second Antzoulatos Affidavit, I accept this submission. BSA have not taken a "carte blanche approach" to the material over which it seeks non-publication orders. Instead, the material identified in their submissions and evidence is, save for the material discussed immediately below, specific, targeted and demonstrate that BSA's commercial competitors could benefit from the disclosure of this material which discloses information about BSA's finances and business model which are not publicly available. I am therefore satisfied that non-publication orders are necessary to prevent prejudice to the proper administration of justice. 247 I have not made non-publication orders over the information disclosed in parts of Mr Becker's affidavit, namely, parts of paragraphs 10, the whole of paragraphs 11, 12 and 15. These paragraphs discuss BSA's affairs in a general manner and I do not accept that if this information were in the public domain, a commercial competitor of BSA would be likely to gain an advantage over BSA such that it would be "likely to have a significant impact on [BSA's] business and profitability" or that the administration of justice would be prejudiced by its disclosure. Accordingly, the orders I have made do not extend to this information. The Funder's proposed non-publication orders 248 On 20 July 2022 and 12 August 2022, the Funder made submissions seeking non-publication orders. The Funder initially sought non-publication in relation to a broader range of material in the affidavit of Stephen Conrad dated 4 July 2022, however, this was narrowed by its submissions of 12 August 2022. The application for non-publication orders is now pressed by the Funder on three bases. First, that disclosure of certain material should be prevented because it is confidential and subject to claims for legal professional privilege by either the Funder or the applicant. Second, because the material is subject to a contractual obligations of confidentiality. Third, because the material is commercially sensitive. 249 With respect to the material under the first basis, the Funder seeks non-publication orders over three documents, being: (1) Paragraph 51 of the 4 July 2022 affidavit of S Conrad, being a reference to Mr Conrad's view on the legal opinion expressed within the Counsel Opinion (para [51]); (2) Exhibit SC-1 to the 4 July 2022 affidavit of S Conrad, being a copy of Ms Lisa Brentnall's report to the Funder's CAC (SC-1); and (3) Exhibit SC-2 to the 4 July 2022 affidavit of S Conrad, being a copy of the minutes of the meeting of Funder's CAC of 30 April 2019 (SC-2). 250 The claim with respect to para [51] refers to Mr Conrad's view on the advice given in the Counsel Opinion. I need not decide whether the Funder can properly claim legal professional privilege or "common interest privilege" over this material, as they submitted. For the reasons stated at [243] above, I am satisfied that the Counsel Opinion and Mr Conrad's discussion of its contents at para [51], is confidential and ought to be the subject of non-publication orders. 251 Turning to SC-1 and SC-2, I note that the applicants wrote to my Chambers on 12 August 2022 and confirmed that they also made their own claim of confidentiality over SC-1 and SC-2, adopting the Funder's submissions that those documents were covered by legal professional privilege. A claim of privilege is a proper basis for the making of confidentiality or non-publication orders: see McGraw Hill at [120]. I accept that SC-1 and SC-2 are confidential. I accept that parts thereof are also subject to claims for legal professional privilege by the Funder. However, I note that there are sections of those documents which were disclosed in Mr Conrad's 4 July 2022 affidavit over which no claim of confidentiality is made and there is, therefore, an inconsistency between Mr Conrad's conduct and maintenance of confidentiality over the entirety of SC-1 and SC-2 which effects a waiver of any legal professional privilege the Funder may have held over those documents: see Mann v Carnell (1999) 201 CLR 1 at [28] (Gleeson CJ, Gaudron, Gummow and Callinan JJ). I will make orders for SC-1 and SC-2 to be suppressed other than where confidentiality has been waived (see Schedule 3 to the orders which accompany these reasons). I note further that in so far as these reasons refer to the contents of SC-1 and SC-2, I have regarded the need to maintain open justice as paramount to the interest in the proper administration of justice. 252 With respect to the material identified under the second basis above at [248], the document to which these proposed orders relates is Exhibit SC-4 to the 4 July 2022 affidavit of S Conrad, being a copy of the Funder's 'Portfolio Adverse Costs Insurance Policy' with AmTrust. I am satisfied that the material is the subject of contractual confidentiality obligations, referred to in Mr Conrad's affidavit at Schedule A, item 12, and is properly the subject of non-publication orders. 253 With respect to the third basis above at [248], the Funder seeks orders over paragraph [25] of Mr Conrad's 4 July 2022 affidavit which it submits is commercially sensitive. The figure reveals the initial rate of commission of the "gross settlement proceeds" recommended by the CAC of the Funder to their board of directors if the proceeding was "resolved more than 12 months from commencement". The Funder submits that disclosure of this figure in Mr Conrad's evidence will reveal the provisional commission rates which the Funder offers to fund proceedings and, together with the rate which is now sought to be claimed, is valuable to its competitors and prospective clients because it reveals the extent to which the Funder may be prepared to discount its commission. The Funder submits that there is no evidence to support the assumption that this information is public and that it is "reasonably foreseeable" that revelation of this information to competitors or future clients "would be exploited to LLS' detriment." 254 In support of this argument, the Funder sought to rely on the observations of Murphy J in Endeavour River at [36]. His Honour there found that the relevant material was commercially sensitive information and accepted the funder's confidentiality claims. I accept the Funder's submission in this case that information about the Funder's preparedness to discount its commission rates in a specific matter is not public or already known to competitors on the evidence before the Court. Therefore, an order to prevent the publication of this information is necessary to prevent prejudice to the proper administration of justice. 255 The parties are ordered to file the material mentioned in orders [3]-[5] of these reasons on or before 12 December 2022. The orders to be made 256 The terms of paragraphs [27]-[29] of the Settlement Distribution Scheme which are now marked with placeholders in the Settlement Distribution Scheme approved by my orders on 26 July 2022, need to be reformulated to accord with the distribution of the Settlement Sum contemplated by these reasons. Once that is done, I will make an order that the settlement of this proceeding is approved on the terms of the Settlement Distribution Scheme including the terms of those paragraphs. 257 The parties (by whom I mean the applicants, BSA and the Funder) are directed to reformulate the terms of paragraphs [27]-[29] of the Settlement Distribution Scheme as earlier proposed and as set out at [236] above, so that those terms accord with these reasons. That reformulation should remove any arrangements which have become redundant, such as the reference in the former paragraph [27] to the "FY 22 Capital Raise Payment". It should otherwise be consistent with the Settlement Deed in so far as that involves no inconsistency with the distribution contemplated by these reasons. The terms should also be based upon an Administration Cost of $122,500. If leave is sought by Shine and any order made permitting an increase in those costs, orders can be made at a later time adjusting the final distribution under the Settlement Distribution Scheme. 258 I intend that the first instalment provided by BSA pursuant to the Deed be distributed as soon as practicable and before 23 December 2022. The terms of the reformulated paragraphs should reflect that intent. I appreciate that the distribution to participating group members of the first instalment may require more time because of the capacity provided in the Settlement Distribution Scheme for Assessment Notices to be challenged and reviewed. I would, however, expect that by at least 23 December 2022 the Assessment Notices required to be sent to participating group members pursuant to paragraph [17] of the Settlement Distribution Scheme will have been sent. If there are consequential amendments required to other paragraphs in the Settlement Distribution Scheme beyond the amendments to paragraphs [27]-[29], the parties should identify the proposed amendments. If my intended timing of the distribution cannot be accommodated I expect an affidavit to be provided by the Administrator explaining why. In order to accommodate the intended timing of the first distribution I will direct the parties to provide the reformulated paragraphs (including any consequential amendments) on or before 7 December 2022. 259 I should further indicate that in addition to providing the revised paragraphs, the parties should provide to my Chambers a document which, by setting out the relevant calculations made, verifies that the deductions allowed are consistent with those contemplated by these reasons. Furthermore, if there is disagreement or other difficulty, my Chambers should be promptly made aware so that immediate steps can be taken to find a prompt resolution. I certify that the preceding two hundred and fifty-nine (259) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromberg. Associate: Dated: 30 November 2022 SCHEDULE OF PARTIES VID 488 of 2020 First Cross-Claim Second Cross-Respondent SOUTHERN ELECTRICAL AND DATA PTY LTD Second Cross-Claim Second Cross-Respondent ESCOM COMMUNICATIONS PTY LTD Third Cross-Respondent MARCOMM COMMUNICATIONS