ASIC Class Order [CO 13/898]

Administered by Department of the Treasury

Legislation au F2013L01376 Not in force Legislative Instrument

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About this compilation

Compilation No. 3

This is a compilation of ASIC Class Order [CO 13/898] as in force on 11 July 2017. It includes any commenced amendment affecting the legislative instrument to that date.

This compilation was prepared by the Australian Securities and Investments Commission.

The notes at the end of this compilation (the endnotes) include information

about amending instruments and the amendment history of each amended provision.

Prepared by the Australian Securities and Investments Commission.

Australian Securities and Investments Commission

Corporations Act 2001—Subsections 601QA(1)(b), 926A(2)(a), 992B(1)(a) and 1020F(1)(a)—Declaration and Exemption

Enabling legislation

1. The Australian Securities and Investments Commission makes this instrument under paragraphs 601QA(1)(b), 926A(2)(a), 992B(1)(a) and 1020F(1)(a) of the Corporations Act 2001 (the Act).

Title

2. This instrument is ASIC Class Order [CO 13/898].

Declaration

4. Chapter 5C of the Act applies to all persons as if section 9 of the Act were modified or varied as follows:

(a) after the definition of condition, insert:

“conditional costs agreement means an agreement of the kind defined as a conditional costs agreement in the Legal Profession Act 2004 of the State of Victoria as at 11 July 2013 whether or not entered into in that State or for the purposes of that Act.

Note: The definition of conditional costs agreement in similar legislation other States may not cover costs agreements that involve certain uplift fees. An agreement involving such fees is not for this reason alone precluded from being a conditional costs agreement for the purposes of this Act. It is up to lawyers to comply with the requirements of any applicable State or Territory legislation regarding uplift fees.”;

(b) in the definition of managed investment scheme, after paragraph (ma) insert:

“(maa) a scheme for participating in and conducting legal proceedings where the members of the scheme:

(i) have or may have an entitlement to a remedy arising out of the same or similar circumstances; and

(ii) wholly or substantially fund their legal costs under conditional costs agreements;

(mab) a scheme for proving claims against a company under Division 6 of Part 5.6 (including the preparation and lodgement of the proofs) where the members of the scheme:

(i) have or may have claims against the company arising out of the same or similar circumstances; and

(ii) wholly or substantially fund their legal costs under conditional costs agreements;”.

Exemption

5. A person does not have to comply with subsection 911A(1) or 911B(1) of the Act for the provision of a financial service in relation to:

(a) an interest in a managed investment scheme (a conditional cost litigation scheme) that is a scheme for participating in and conducting legal proceedings, where the members of the scheme:

(i) have or may have an entitlement to a remedy arising out of the same or similar circumstances; and

(ii) wholly or substantially fund their legal costs under conditional costs agreements; or

(b) an interest in a managed investment scheme (a conditional cost proof of debt scheme) that is a scheme for proving claims against a company under Division 6 of Part 5.6 of the Act (including the preparation and lodgement of the proofs) where the members of the scheme:

(i) have or may have claims against the company arising out of the same or similar circumstances; and

(ii) wholly or substantially fund their legal costs under conditional costs agreements; or

(c) an arrangement (a funding product), or an interest (a funding product) in an arrangement of either of the following kind, to the extent that the arrangement or interest is a financial product other than an interest in a conditional cost litigation scheme or conditional cost proof of debt funding scheme:

(i) an arrangement for participating in and conducting legal proceedings brought by or on behalf of a person where the person’s legal costs are wholly or substantially funded under a conditional cost agreement;

(ii) an arrangement for proving claims made by a person against a company under Division 6 of Part 5.6 of the Act (including the preparation and lodgement of the proofs) where the person’s legal costs are wholly or substantially funded under a conditional cost agreement.

6. A person does not have to comply with subsection 992A(1) or (3), or subsection 992AA(1), of the Act in relation to:

(a) an interest in a conditional cost litigation scheme; or

(b) an interest in a conditional cost proof of debt scheme; or

7. A person does not have to comply with Part 7.9 of the Act in relation to:

(a) an interest in a conditional cost litigation scheme; or

(b) an interest in a conditional cost proof of debt scheme; or

Application

8. For the avoidance of doubt, the declaration in paragraph 4 does not have effect for the purposes of section 601MB of the Act in relation to a contract entered into before the commencement of this instrument by a person to subscribe for an interest in:

(a) a conditional cost litigation scheme; or

(b) a conditional cost proof of debt scheme.

9. This instrument has effect until 12 July 2019.

Interpretation

10. In this instrument:

conditional costs agreement means an agreement of the kind defined as a conditional costs agreement in the Legal Profession Act 2004 of the State of Victoria as at 11 July 2013 whether or not entered into in that State or for the purposes of that Act.

Notes to ASIC Class Order [CO 13/898]

Note 1

ASIC Class Order [CO 13/898] (in force under s601QA(1)(b), 926A(2)(a), 992B(1)(a) and 1020F(1)(a) of the Corporations Act 2001) as shown in this compilation comprises that Class Order amended as indicated in the tables below.

Table of Instruments

Instrument number	Date of FRL registration	Date of commencement	Application, saving or transitional provisions
[CO 13/898]	12/7/2013 (see F2013L01376)	12/7/2013
[CO 14/571]	10/7/2014 (see F2014L00977)	10/7/2014	-
2016/476	8/7/2016 (see F2016L01170)	9/7/2016	-
2017/642	10/7/2017 (see F2017L00905)	11/7/2017	-

Table of Amendments

ad. = added or inserted am. = amended rep. = repealed LA = Legislation Act 2003 rs. = repealed and substituted

Provision affected	How affected
Para 3...........	rep. s48D LA
Para 9...........	am. [CO 14/571]; 2016/476 and 2017/642

Overview

ASIC Class Order [CO 13/898] was enacted in 2013 under the Corporations Act 2001 to address specific financial and legal service provisions concerning managed investment schemes and conditional costs agreements. The Australian Securities and Investments Commission (ASIC) is the enacting body, and the policy objective of the Class Order is to provide exemptions and declarations that streamline compliance for certain financial products and services related to legal proceedings and proof of debts. This legislative instrument modifies certain sections of the Corporations Act to define conditional costs agreements and managed investment schemes in a manner that allows for more flexibility in financial services related to litigation and debt claims, provided that the services comply with state or territory legislation regarding uplift fees. The Class Order has been subject to several amendments, the latest being in effect as of July 2017.

Scope and Application

ASIC Class Order [CO 13/898], made under the Corporations Act 2001, applies to all persons in Australia by modifying or varying section 9 of the Act. This instrument introduces specific definitions and exemptions related to conditional costs agreements and managed investment schemes, particularly those involving legal proceedings or claims against a company. The modifications extend to the definition of "conditional costs agreement" and "managed investment scheme," with a particular focus on schemes where members fund their legal costs under such agreements. Exemptions are provided for financial services and products related to these schemes, as well as specific arrangements where legal costs are funded under conditional costs agreements. This order is applicable nationally in Australia and has a defined expiry date of 12 July 2019, although it can be amended or extended through subordinate instruments. The order does not affect contracts entered into before its commencement for subscribing to interests in conditional cost litigation or proof of debt schemes.

Key Provisions

The ASIC Class Order [CO 13/898] under the Corporations Act 2001 (the Act) modifies the application of Chapter 5C of the Act to certain types of managed investment schemes and funding products, specifically those involving conditional costs agreements. Section 4 of the Class Order introduces the term "conditional costs agreement," which is defined as per the Legal Profession Act 2004 of the State of Victoria, as it stood on 11 July 2013. This definition is intended to cover agreements regardless of where they were entered into or for what purpose, though it is noted that similar legislation in other states may not cover agreements involving certain uplift fees. The Class Order also expands the definition of "managed investment scheme" in section 4(b) to include schemes for participating in and conducting legal proceedings or proving claims against a company, provided the members of the scheme fund their legal costs under conditional costs agreements. The Class Order imposes specific obligations on financial service providers to comply with certain sections of the Act. Under section 5, financial service providers are exempt from complying with subsections 911A(1) and 911B(1) for services related to interests in managed investment schemes that are conditional cost litigation schemes or conditional cost proof of debt schemes, as well as for funding products where legal costs are funded under conditional costs agreements. Similarly, section 6 exempts financial service providers from complying with subsections 992A(1) or (3), and 992AA(1), of the Act for interests in conditional cost litigation or proof of debt schemes and funding products. Section 7 further exempts financial service providers from complying with Part 7.9 of the Act for these same categories of schemes and products. The Class Order also outlines specific consequences for non-compliance. It is important to note that the declaration made in section 4 does not affect contracts entered into before the commencement of the Class Order for subscriptions to conditional cost litigation schemes or conditional cost proof of debt schemes, as per section 8. While the Class Order itself does not explicitly state penalties for non-compliance, the underlying Corporations Act 2001 includes provisions for civil and criminal penalties, including fines and imprisonment, for breaches of its requirements. The exact penalties would depend on the specific subsection or provision breached, and the nature and severity of the breach.

Area of Law: Corporate Law & Governance
Instrument: Legislative Instrument
Concepts: Definitions & Interpretation; Licensing & Registration; Enforcement Powers

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.

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