{"id":"F2020L00034","name":"ASIC Corporations (Conditional Costs Schemes) Instrument 2020/38","slug":"asic-corporations-conditional-costs-schemes-instrument-2020-38","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":100576,"registerId":"commonwealth-F2020L00034-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"ASIC Corporations (Conditional Costs Schemes) Instrument 2020/38","content":"![Commonwealth Coat of Arms and ASIC logo](image.001.png)\n\nASIC Corporations (Conditional Costs Schemes) Instrument 2020/38\n\nmade under subsections 601QA(1), 926A(2), 992B(1) and 1020F(1) of the Corporations Act 2001.  \n\nCompilation No. 3\n\nCompilation date: 13/12/2025\n\nIncludes amendments: F2025L01575\n\nAbout this compilation\n\nThis compilation\n\nThis is a compilation of the ASIC Corporations (Conditional Costs Schemes) Instrument 2020/38 that shows the text of the law as amended and in force on 13/12 /2025 (the compilation date).\n\nThe notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law.\n\nUncommenced amendments\n\nThe effect of uncommenced amendments is not shown in the text of the compiled law. The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. Any uncommenced amendments affecting the law are accessible on the Register (www.legislation.gov.au).\n\nApplication, saving and transitional provisions\n\nIf the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes.\n\nModifications\n\nIf the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. Any modifications affecting the law are accessible on the Register.\n\nSelf‑repealing provisions\n\nIf a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes.\n\nContents\n\nPart 1—Preliminary\n\n1 Name of legislative instrument\n\n3 Authority\n\n4 Definitions\n\nPart 2—Declaration\n\n5 Definition of managed investment scheme\n\nPart 3—Exemption\n\n6 Licensing\n\n7 Hawking\n\n8 Financial product disclosure\n\nPart 4—Application and transitional\n\n9 Application\n\n10 Transitional\n\nEndnotes\n\nEndnote 1—About the endnotes\n\nEndnote 2—Abbreviation key\n\nEndnote 3—Legislation history\n\nEndnote 4—Amendment history\n\nPart 1—Preliminary\n\n1 Name of legislative instrument\n\nThis is the ASIC Corporations (Conditional Costs Schemes) Instrument 2020/38.\n\n3 Authority\n\nThis instrument is made under subsections 601QA(1), 926A(2), 992B(1) and 1020F(1) of the Corporations Act 2001.\n\n4 Definitions\n\nIn this instrument:\n\nAct means the Corporations Act 2001.\n\nconditional costs agreement means an agreement of the kind defined as a conditional costs agreement in section 181 of Schedule 1 (Legal Profession Uniform Law) to the Legal Profession Uniform Law Application Act 2014 of the State of Victoria as in force on 17 January 2020 whether or not in that State or for the purposes of that Act.\n\nPart 2—Declaration\n\n5 Definition of managed investment scheme\n\nChapter 5C of the Act applies to all persons as if section 9 of the Act were modified or varied as follows:\n\n(a) after the definition of condition, insert:\n\n“conditional costs agreement means an agreement of the kind defined as a conditional costs agreement in section 181 of Schedule 1 (Legal Profession Uniform Law) to the Legal Profession Uniform Law Application Act 2014 of the State of Victoria as at 17 January 2020 whether or not in that State or for the purposes of that Act.”;\n\n(b) in the definition of managed investment scheme, after paragraph (mb) insert:\n\n“(mba) a scheme for participating in and conducting legal proceedings where the members of the scheme:\n\n(i) have or may have an entitlement to a remedy arising out of the same or similar circumstances; and\n\n(ii) wholly or substantially fund their legal costs under conditional costs agreements;\n\n(mbb) 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:\n\n(i) have or may have claims against the company arising out of the same or similar circumstances; and\n\n(ii) wholly or substantially fund their legal costs under conditional costs agreements;”.\n\n  \n\nPart 3—Exemption\n\n6 Licensing\n\nA 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:\n\n(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:\n\n(i) have or may have an entitlement to a remedy arising out of the same or similar circumstances; and\n\n(ii) wholly or substantially fund their legal costs under conditional costs agreements; or\n\n(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:\n\n(i) have or may have claims against the company arising out of the same or similar circumstances; and\n\n(ii) wholly or substantially fund their legal costs under conditional costs agreements; or\n\n(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 scheme:\n\n(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;\n\n(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.\n\n7 Hawking\n\nA person does not have to comply with subsection 992A of the Act in relation to:\n\n(a) an interest in a conditional cost litigation scheme; or\n\n(b) an interest in a conditional cost proof of debt scheme; or\n\n(c) a funding product.\n\n8 Financial product disclosure\n\nA person does not have to comply with Part 7.9 of the Act in relation to:\n\n(a) an interest in a conditional cost litigation scheme; or\n\n(b) an interest in a conditional cost proof of debt scheme; or\n\n(c) a funding product.\n\nPart 4—Application and transitional\n\n9 Application\n\nFor the avoidance of doubt, the declaration in section 5 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:\n\n1.  a conditional cost litigation scheme; or\n\n(b) a conditional cost proof of debt scheme.\n\n10 Transitional\n\nThis instrument has effect until the end of 31 January 2029.\n\n  \n\nEndnotes\n\nEndnote 1—About the endnotes\n\n> Note: The endnotes provide information about this compilation and the compiled law.\n\n> Note: The following endnotes are included in every compilation:\n\n> Note: Endnote 1—About the endnotes\n\n> Note: Endnote 2—Abbreviation key\n\n> Note: Endnote 3—Legislation history\n\n> Note: Endnote 4—Amendment history\n\n> Note: Abbreviation key—Endnote 2\n\n> Note: The abbreviation key sets out abbreviations that may be used in the endnotes.\n\n> Note: Legislation history and amendment history—Endnotes 3 and 4\n\n> Note: Amending laws are annotated in the legislation history and amendment history.\n\n> Note: The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation.\n\n> Note: The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law.\n\n> Note: Misdescribed amendments\n\n> Note: A misdescribed amendment is an amendment that does not accurately describe how an amendment is to be made. If, despite the misdescription, the amendment can be given effect as intended, then the misdescribed amendment can be incorporated through an editorial change made under section 15V of the Legislation Act 2003.\n\n> Note: If a misdescribed amendment cannot be given effect as intended, the amendment is not incorporated and “(md not incorp)” is added to the amendment history.\n\nEndnote 2—Abbreviation key\n\n| ad = added or inserted                         | orig = original                          |     |     |\n| ---------------------------------------------- | ---------------------------------------- | --- | --- |\n| am = amended                                   | p = page(s)                              |     |     |\n| amdt = amendment                               | para = paragraph(s)/subparagraph(s)      |     |     |\n| C[x] = Compilation No. x                       | /sub‑subparagraph(s)                     |     |     |\n| ch = Chapter(s)                                | pres = present                           |     |     |\n| cl = clause(s)                                 | prev = previous                          |     |     |\n| cont. = continued                              | (prev…) = previously                     |     |     |\n| def = definition(s)                            | pt = Part(s)                             |     |     |\n| Dict = Dictionary                              | r = regulation(s)/Court rule(s)          |     |     |\n| disallowed = disallowed by Parliament          | reloc = relocated                        |     |     |\n| div = Division(s)                              | renum = renumbered                       |     |     |\n| exp = expires/expired or ceases/ceased to have | rep = repealed                           |     |     |\n| effect                                         | rs = repealed and substituted            |     |     |\n| gaz = gazette                                  | s = section(s)/subsection(s)             |     |     |\n| LA = Legislation Act 2003                      | /rule(s)/subrule(s)/order(s)/suborder(s) |     |     |\n| LIA = Legislative Instruments Act 2003         | sch = Schedule(s)                        |     |     |\n| (md not incorp) = misdescribed amendment       | SLI = Select Legislative Instrument      |     |     |\n| cannot be given effect                         | SR = Statutory Rules                     |     |     |\n| mod = modified/modification                    | sub ch = Sub‑Chapter(s)                  |     |     |\n| No. = Number(s)                                | sub div = Subdivision(s)                 |     |     |\n| Ord = Ordinance                                | sub pt = Subpart(s)                      |     |     |\n|                                                | underlining = whole or part not          |     |     |\n|                                                | commenced or to be commenced             |     |     |\n\nEndnote 3—Legislation history\n\n| Name                                                                     | Registration                 | Commencement | Application, saving and transitional provisions |\n| ------------------------------------------------------------------------ | ---------------------------- | ------------ | ----------------------------------------------- |\n| ASIC Corporations (Conditional Costs Schemes) Instrument 2020/38         | 21/1/2020 (see F2020L00034)  | 22/1/2020    |                                                 |\n| ASIC Corporations (Amendment and Repeal) Instrument 2021/799             | 22/9/2021 (see F2021L01310)  | 5/10/2021    |                                                 |\n| ASIC Corporations and Credit (Amendment and Repeal) Instrument 2022/1032 | 15/12/2022 (see F2022L01651) | 16/12/2022   |                                                 |\n| ASIC Corporations and Credit (Amendment) Instrument 2025/809             | 12/12/2025 (see F2025L01575) | 13/12/2025   |                                                 |\n\nEndnote 4—Amendment history\n\n| Provision affected | How affected  |\n| ------------------ | ------------- |\n| Section 2          | rep. s48D LA  |\n| Section 5          | am. 2022/1032 |\n| Section 7          | am. 2021/799  |\n| Section 10         | am. 2022/1032 |\n| Section 10         | am. 2025/809  |","sortOrder":0}],"analysis":{"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"The instrument's scope has been altered since first registered: endnote 4 records amendments to section 5 (2022/1032) which modified the managed investment scheme definition, section 7 (2021/799), and section 10 (2022/1032 and 2025/809). Those amendments adjusted who and what is covered (definition adjustments and transitional/expiry treatment), so the current operative scope differs from the original 22/1/2020 text."},"complexity_factors":["Cross‑references and modifications across multiple Corporations Act provisions (authority: subsections 601QA(1), 926A(2), 992B(1), 1020F(1)).","Alters the core definition of 'managed investment scheme' by inserting new categories (section 5 modifying s9) and relies on an external statutory definition of 'conditional costs agreement' (section 4 referencing Legal Profession Uniform Law s181 as at 17 Jan 2020).","Creates targeted exemptions from licensing (section 6: ss911A/911B), hawking prohibition (section 7: s992A) and product disclosure (section 8: Part 7.9), which change compliance obligations for providers.","Key factual threshold 'wholly or substantially fund' determines coverage, raising interpretation and enforcement uncertainty for regulators and market participants.","Temporal and transitional design: non‑retroactivity carve‑out for pre‑commencement contracts (section 9) and an explicit expiry date (section 10), requiring ongoing legislative management.","Interplay risk between 'funding product' classification and existing financial product law — potential for regulatory arbitrage and litigation over boundaries.","Amendment history (endnotes) shows post‑enactment changes to definitions and transitional provisions, increasing legal tracing costs for advisers and firms."],"plain_english_summary":"**What it changes:** This instrument treats schemes that pool and fund litigation or proofs of debt under specified \"conditional costs agreements\" as managed investment schemes for Chapter 5C and exempts providers of interests and certain funding products from licensing, hawking and product‑disclosure obligations. \n\n**Who it affects:** It applies where members' legal costs are wholly or substantially funded under those conditional costs agreements, preserves subscriptions entered before commencement (s9), and runs until 31 January 2029 (s10)."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The instrument maintains its original narrow purpose. It was always intended as a targeted exemption for conditional costs litigation funding arrangements. The amendments shown in the endnotes (2021, 2022, 2025) appear to be technical updates and extensions of the sunset date rather than expansion into new substantive areas. The scope remains limited to: (a) class action litigation schemes, (b) insolvency proof of debt schemes, and (c) related funding products."},"complexity_factors":["Cross-referencing to external legislation: definition of 'conditional costs agreement' is imported from Victorian Legal Profession Uniform Law (Schedule 1, section 181) as at a specific historical date (17 January 2020), creating a 'frozen' definitional dependency","Nested conditional logic in exemptions: section 6 contains three parallel exemption pathways (litigation schemes, proof of debt schemes, and funding products) each with dual criteria (same/similar circumstances + conditional costs funding)","Modified reading of primary legislation: section 5 operates by 'reading in' additional paragraphs to the Corporations Act's definition of 'managed investment scheme', requiring mental reconstruction of the parent Act","Temporal limitation with grandfathering: section 9 contains a 'for the avoidance of doubt' clarification about pre-existing contracts, creating a limited grandfathering provision","Self-terminating provision: section 10 creates a hard sunset date (31 January 2029) requiring legislative monitoring for renewal or replacement"],"plain_english_summary":"This instrument creates a temporary regulatory safe harbour for “conditional costs schemes” (no‑win, no‑fee group litigation and certain insolvency creditor arrangements), treating them as lawyer‑driven legal funding rather than financial products. It exempts such schemes from normal financial services licensing, hawking and product‑disclosure rules so law firms, funders, insolvency practitioners and claimants can run group claims without breaching investor laws. The relief expires 31 January 2029."}},"importantCases":[],"_links":{"self":"/api/acts/asic-corporations-conditional-costs-schemes-instrument-2020-38","history":"/api/acts/asic-corporations-conditional-costs-schemes-instrument-2020-38/history","analysis":"/api/acts/asic-corporations-conditional-costs-schemes-instrument-2020-38/analysis","conflicts":"/api/acts/asic-corporations-conditional-costs-schemes-instrument-2020-38/conflicts","importantCases":"/api/acts/asic-corporations-conditional-costs-schemes-instrument-2020-38/important-cases","documents":"/api/acts/asic-corporations-conditional-costs-schemes-instrument-2020-38/documents"}}