Regulatory reform, climate change, class actions as well as directors’ risk and liability will be the focus of the litigation and regulation scene in 2020. The trend towards greater personal responsibility for directors also shows no signs of slowing.
Our seven predictions for 2020:
- After much discussion about climate change litigation risks for companies and directors, 2020 is the year in which these issues will begin to be litigated in the New Zealand courts.
- Directors’ risk of liability continues to increase while at the same time their options for insuring against risk are diminishing.
- The Directors and Officers insurance market will face further pressure from securities class action risks, regulatory risks, climate change risks and legislation restrictions.
- Insolvent trading risk should be on the minds of directors who may be liable for breach of duties when a company experiences financial difficulties – some key decisions on this are expected from the courts in 2020.
- The Commerce Commission will, in addition to its enduring priorities, focus increasingly upon substantiation claims (ensuring that companies can substantiate representations they have made), environmental claims (e.g. ‘biodegradable’, ‘compostable’), privacy and responsible lending.
- Further clarification around ‘opt-out’ class actions – which are easier to bring as all potential claimants are automatically included in a claim unless they opt out – is expected. We also expect a decision on ‘common fund’ orders which will impact litigation funding.