Judge Orders Permanent Stay in Crypto Class Action Targeting Meta and Google
There are many examples of litigation funders offering essential support to class action cases, providing group members with the capital needed to seek justice from companies or institutions that have harmed them. However, issues can arise where the line between funder and claimant becomes blurred, as we have seen in an Australian class action that was permanently stayed by a federal judge due to potential conflicts of interest. In a judgement from the Federal Court of Australia last week, Justice Elizabeth Cheeseman granted a permanent stay on proceedings in the case of Hamilton v Meta Platforms, Inc. The ruling stated that there was “the very real potential for conflicts of interests to arise and influence Mr Hamilton’ conduct of the proceedings in ways that are to the detriment of Group Members.” Justice Cheeseman concluded that as Andrew Hamilton was both the representative applicant and the CEO of JPB Liberty, the litigation funder supporting the case, this situation could create a “myriad of conflicts.” Hamilton’s class action had represented around 650 group members in the case brought against Meta and Google, alleging that the companies had broken Australian competition law by banning the advertisement of cryptocurrencies. Hamilton had argued that this ban had led to a substantial decline in the value of cryptocurrencies, including a currency called STEEM that he had an interest in through his ownership of Green Freedom Limited. Hamilton had then entered into a litigation funding agreement with the group members through JPB Liberty, having partially funded the litigation “by issuing crypto tokens known as “Sue Facebook Tokens” (SUFB Tokens).” Justice Cheeseman explained in her judgement that she was “not satisfied that the conflicts inherent in Mr Hamilton’s multifaceted interests in the proceeding are capable of being appropriately managed.” Whilst she acknowledged that a permanent stay was “a tool of last resort”, the judge explained that given the conflicts of interest, “there are real concerns about how Mr Hamilton would address them in circumstances where he frames his claim as being primary and those of Group Members as being secondary.”