2018 Litigation Forecast - Group (“class action”) litigation Summary

Group litigation is gradually becoming an established part of the New Zealand litigation landscape despite the lack, to date, of a developed legal framework to cater for true ‘class actions’.  For 2018, the Law Commission has announced that it will conduct a review of the ‘class action’ regime.  As a result, we may see a shift to a more formalised regime in the not too distant future.

What is clear is that group litigation is here to stay.

Group litigation is here to stay. Any business, in any industry, can be subject to a ‘class’-type claim which quickly could become a significant issue.

We are likely to see a fairly active period in 2018 for group litigation with the judgment on the first stage of the ‘Kiwifruit class action’ expected, together with further steps in the ‘Southern Response class action’ and defective cladding cases.

Our projection of the key themes for 2018 are:

  • Facilitation:  The courts are continuing to adopt a “liberal and flexible” approach to representative actions;
  • Creative case management: The courts are showing creativity in managing some of the practical obstacles to group claims; and
  • No established track record for success yet: The group litigation claims in New Zealand to date do not appear to have resulted in any significant judgments or settlements.  In the next few years, the commercial litigation funders who are often asked to finance class actions litigation will be looking for a return on their investment

Guidance for the future may be taken from other jurisdictions.  Australia has now had its 25th anniversary of the introduction of a class actions regime there.  This more mature group litigation market demonstrates some likely trends for New Zealand including:

  • an increase in financial services group litigation and shareholder group actions;
  • a focus on follow on group litigation from regulators’ prosecutions: This is where a regulator brings a proceeding and obtains a determination of liability which groups of claimants then seek to rely on for individual damages claims; and
  • the increased influence of law firms focussing on plaintiff/claimant-side matters, and the growing influence of commercial litigation funders.

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