Funding, Fairness and Forum Choice: The High Court’s Warning in Bogan v Smedley
Home › Case Studies › Case Law Library › Commercial & Business Cases › Class action › Bogan v The Estate of Peter John Smedley (Deceased) [2025] HCA 7 (12 March 2025)
Published: 19 November 2025 | Reviewed: 19 November 2025
(3-minute read)
Case Summary
This case concerned the Arrium shareholder class action. The Supreme Court of Victoria had made a Group Costs Order (GCO) under s 33ZDA of the Supreme Court Act 1986 (Vic), allowing the plaintiffs’ lawyers to charge costs as a percentage of any recovery.
KPMG, a defendant, sought to transfer the entire proceeding to the Supreme Court of New South Wales under s 1337H(2) of the Corporations Act 2001 (Cth). If transferred, the Victorian GCO would not survive in NSW because NSW courts have no power to make such an order.
The High Court held that the GCO’s existence was highly relevant to whether transfer was in the interests of justice. The Court confirmed:
“The fact that the Supreme Court of Victoria has made a GCO … weighs decisively against transfer of the proceeding to the Supreme Court of New South Wales where the GCO could not operate.”
This mattered because without the GCO, the litigation was unlikely to be viably funded. The agreed facts, accepted by both sides, showed:
there was a probability the funder would withdraw without a GCO;
alternative funding was not realistic;
without viable funding, the entire class action would likely terminate without adjudication.
The High Court answered the reserved questions accordingly:
Yes - the existence of the GCO is relevant to transfer.
No - the GCO would not remain in force if transferred to NSW.
No - the proceeding should not be transferred.
Why It Still Matters
At its core, Bogan v Smedley is about access to justice being undermined by cost structures. The risks exposed by the judgment are structural:
a case’s survival turns on how, and where, costs are allowed to be billed;
the choice of forum can silently determine whether a claim is even financially possible;
different courts apply different cost regimes, creating hidden risks for litigants;
defendants may use procedural levers (like transfer applications) to strain plaintiffs' funding models.
The Court stressed that even though both States exercised federal jurisdiction, the Victorian GCO was a unique procedural tool allowing the class action to continue. Removing it would “stultify” the case, effectively ending it before the merits were heard.
This illustrates a systemic truth: the cost structure surrounding litigation can become a deciding force in the case itself. Clients often feel this pressure long before a court sees any facts.
How to Avoid the Same Trap:
Cost Alignment Safeguards
The risk in Bogan is fundamentally a cost-architecture problem:
when the billing model is misaligned with a client’s interests, their ability to continue a case becomes fragile.
Clean Law’s cost-alignment safeguards are designed to prevent this scenario.
Two lawyers often cost less than one - because you fund one path, not both.
Traditional models bill for settlement preparation and trial preparation at the same time. Clean Law separates roles so clients fund only the strategic path they are actually pursuing. This reduces duplicated work, time uncertainty, and the billing volatility that can derail proceedings, just as the absence of a GCO threatened to derail Arrium.
Additional structural protections include:
a transparent cost architecture audited through Law Society trust-account oversight;
ACNC-governed public reporting and governance;
no referral fees or profit sharing, ensuring loyalties stay clear;
predictable cost design so decisions aren’t driven by strain, pressure or changing funding conditions.
This model is built to prevent a matter from failing, not on the merits, but because the billing structure quietly becomes unsustainable.
Clients reading this case often want to understand how Clean Law’s cost-alignment system avoids funding shocks that can determine the fate of a dispute long before any evidence is considered. Our explainer sets out how the structure works in practice.
Bogan v Smedley shows that justice can turn not only on legal principle but on whether a case remains financially viable within a given court structure. When the architecture of costs is unstable, rights can fade before they are vindicated.
If your dispute involves complex cost pressures, class-action exposure, or uncertainty about funding options, a quiet and confidential conversation can help surface the safest pathways.
Book a confidential discussion → Secure a Private Consultation
By Nicky Wang
Principal Solicitor
Legal Liaison Ltd (trading as Clean Law)
Prepared in accordance with public-interest governance,
annual Law Society trust-account audits, and ACNC-reported standards.
Disclaimer: This page is intended to provide general information only and is not legal advice. The contents may not reflect the most current legal developments and do not take into account your individual circumstances. You should not act or refrain from acting on the basis of this information without obtaining legal advice tailored to your situation.
