After local telco, Vocus Telecommunications, gave its second profit warning in seven months, fund manager David Pace received an email from a law firm asking him to join a shareholder class action.
The case, proposed the email, would accuse Vocus of delaying reporting problems it was having bedding down some recent takeovers, and would seek compensation for shareholders.
"I told them flatly, 'we won't be participating'," Pace, whose firm owns eight percent of Vocus, said. "It's just not in my clients' interests. This is a distraction. My priority is that they just keep focused on turning the business around."
Pace's response reflects a growing impatience in Australia's listed company sector, as local regulations encourage global litigation funders to prosecute more lawsuits of Australian corporates.
Unlike in the United States, lawyers in Australia are banned from taking percentage cuts of damages payouts, opening the door for litigation funders to fill the gap.
Australia is now one of the world's biggest markets for litigation funders, by number of cases and number of participants. Some 30 funders are now vying for a piece of an industry which has seen more than 500 class action lawsuits since 1992, compared to none before then.
The number of shareholder class actions in Australia jumped 115 per cent in the five years to 2017, compared to the previous five years. US shareholder class actions rose just 24 per cent over the same time.
"Australia is the country where the role played by third party funders in a class action landscape is greater than any country in the English-speaking world," said Vince Morabito, a law professor at Monash University who specialises in class actions. "It's the place."
While advocates argue third-party financing improves the ability of aggrieved parties to seek redress, some business groups say the model promotes more lawsuits and want tighter controls.
"Class actions are on the rise, the proportion of class actions that are funded by entrepreneurial litigation funders are on the rise, and we believe that our regulatory environment is particularly conducive to activist class actions and ... profit-driven litigation funders," said Australian Institute of Company Directors General Manager for Advocacy, Louise Petschler.
"A national system of regulation around our class action regime would be a significant improvement."
Attorney-General George Brandis, who in opposition said greater regulation of litigation funding should be considered, declined to comment.
(Reporting by Byron Kaye; Editing by Lincoln Feast)