Current state of play There is currently no statutory class actions regime in New Zealand. To date we have been reliant on the courts to develop the law as and when cases arise. Legislative reform is now dependent on whether the new Government will implement Te Aka Matua o te Ture | Law Commission’s recent recommendations for new class action laws and litigation funding. See section 2 for further details.tion 2 for further details. Key statistics The Law Commission report shows a steady increase in class action filings in New Zealand. We expect that trend to continue now there are established litigation funders in New Zealand. If legislative reform is introduced, numbers may increase even more. See section 3 for statistics on class actions in New Zealand. New Zealand cases Recent judicial decisions have confirmed that class actions in New Zealand can proceed on an 'opt-out' basis, that courts can common fund orders in opt-out class actions, and that the Trans Tasman Proceedings Act 2010 can justify a stay of a class action here pending the outcome of a related class action in Australia. See section 4 for further details. Trends There have been a number of shareholder and consumer class actions in New Zealand in recent years, and claims of that nature will inevitably continue. Similar to the UK and Australia, we also expect to see privacy (data breach) and ESG related claims in the future. We may also ultimately see AI- related class actions similar to those recently filed in the US. See sections 5, 6 and 7 for further details. Litigation funding Litigation funders frequently sit behind plaintiffs and fund the class action. Their future in New Zealand appears more certain following the Law Commission report, and the arrival of Omni Bridgeway as a permanent presence in the New Zealand market signals that funders are here to stay. Funders are also looking at broader opportunities to fund solvent entities to bring individual claims, providing an alternative form of risk management for New Zealand corporates, as they have done overseas. See section 8 for further details. “Class actions have become a permanent feature of the New Zealand litigation landscape. The Law Commission has made clear that it considers they are an important mechanism for enhancing access to justice, and it has acknowledged the role litigation funders play in this. Corporates and their directors therefore need to be alive to the particular risks that arise in this type of litigation, and ensure they are best placed to respond to those risks should they eventuate.” NINA BLOMFIELD, PARTNER | SIMPSON GRIERSON 01 SThe key recommendations include: • Certification: Class actions would need to be approved by the court before they can proceed, and the representative plaintiff would need to show they have at least one reasonably arguable cause of action. • Opt-in or opt-out: Class actions would proceed on either an opt-in or opt-out basis. Opt-in requires class members to actively sign up to the proceeding, whereas in an opt-out claim any person falling within the class definition will be a member unless they expressly exclude themselves. • Cost sharing orders: Courts would be able to make cost sharing orders to enable costs to be spread equitably among all class members. This is particularly important where, in an opt-out proceeding, some class members will not have entered into an agreement with the litigation funder. • Multiple class actions: Each time a class action is filed, public notice of the proceeding would need to be given. Any subsequent class action dealing with the same or substantially similar issues and with at least one common defendant would need to be filed within 90 days. The court would then decide at the certification stage which class action(s) can proceed. • Class member information: The court would be able to require a defendant to disclose the names and contact details of potential class members eg customers of a certain product, investors etc. • Litigation funding: Agreements for litigation funding could only be enforced if they have been approved by the court. Among other things, the court would need to be satisfied the agreement is fair and reasonable (including as to the circumstances in which the funder can terminate). There would also be a rebuttable presumption that security for costs should be awarded against a funded representative plaintiff. • Court oversight: The courts would play an important role in overseeing class actions, including at the certification stage. As well as the funding agreement, the court would also need to approve notices to class members, settlements, and the distribution of proceeds to class members if the claim is successful. • Public class action fund: In order to improve access to justice, the Government should consider creating a public class action fund that can indemnify a representative plaintiff for legal costs in public interest litigation (including where the relief sought is non-monetary eg a declaration). In addition to creating a new Class Actions Act, the Law Commission also recommended the introduction of a new suite of High Court Rules 2016 to supplement the regime, as well as changes to the Lawyers and Conveyances Act (Lawyers: Conduct and Client Care Rules) 2008 to clarify the duties of a lawyer acting for the representative plaintiff and class members. The torts of maintenance and champerty would be abolished. The former Government accepted some of the key recommendations in principle, but said in November 2022 that advancing the reforms will “take a period of time”. We expect to see the number of class actions continue to increase over time, particularly with the continued presence of litigation funders in New Zealand and statutory change in the pipeline. Law Commission's IWhile New Zealand waits for a statutory class action regime and legislation regulating litigation funding arrangements, the courts continue to develop this area of the law. Some of the key decisions that have had an impact on the class action and litigation funding landscape in New Zealand are set out below.
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