New Zealand Law Commission Report

22 JULY 2022 BY JASON GEISKER & SIMON GIBBS

On 27 June 2022, the New Zealand Law Commission published its much anticipated report into class actions and litigation funding: R147 Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa | Class Actions and Litigation Funding (“the Report”).

The Report is the culmination of an exhaustive discussion and consultation process over the past 2.5 years, with the Commission engaging widely with stakeholders from government, the legal profession, the litigation funding industry, business, academics and community organisations.[1]  The Report makes 121 recommendations, that comprise a comprehensive reform package for the regulation of class actions and litigation funding in New Zealand. 

The dual statutory objectives of the proposed regime are to ‘improve access to justice and manage multiple claims in an efficient way’. We commend the NZ Law Commission on its methodical approach, broad consultation, and overarching objective to design a class actions regime that works to promote access to justice for all New Zealander’s while balancing the rights of defendants and recognising the important role of third-party litigation funding. We support the Commission’s vision to balance pragmatism and commerciality with a principled approach to public interests, fairness and access to justice.

Recommendations

The Report calls for a comprehensive and integrated reform package. A selection of recommendations that capture the key architecture, design and procedural mechanisms of the proposed regime are highlighted below:

Reform of class actions – the Report recommends:

• A statutory class actions regime to replace the current procedure for representative proceedings under High Court Rule 4.24. The recommendation includes a proposed Class Actions Act, being a draft blueprint for legislative reform based on the 121 recommendations;
• A class certification procedure to determine if a proceeding proceeds as a class action;
• A statutory power to manage concurrent (or competing) class proceedings;
• The choice of an opt-in / opt-out model to run class proceedings based on the circumstances of each case;
• A settlement approval procedure for class actions;
• Standing for state entities to act as representative plaintiff for a class;
• A bespoke, rules-based case management procedure, to be developed by the Court and Rules Committee;
• A public register of class actions to be maintained by the Ministry of Justice to provide transparency and public insight into current class claims; and
• A public class actions law clinic and related services that enable and promote access to justice and the availability of public resources to assist class members understand the class actions process.
  
  

Regulation of litigation funders – the Report recommends:

• Abolition of the torts of maintenance and champerty;
• Litigation funding agreement must be approved by the Court to be enforceable;
• Disclosure of funding agreements to the Court and defendants (with appropriate measures to protect privilege and tactical matters);
• A statutory power to make and regulate cost sharing mechanisms (referred to as “cost sharing orders” by the Commission, otherwise known as “common fund orders” in other jurisdictions);
• A public class actions fund;
• Power to make orders directly against a litigation funder for the provision of security for costs and payment of adverse costs; and
• A statutory power to appointment of an expert to assist the Court to determine the fairness and reasonableness of funding commissions.
  
  

Next steps

The New Zealand Government will now consider the Report and may accept or reject the Commission’s recommendations. If the Government accepts the Commission’s recommendations a number of key procedural matters will require further consultation and decision by the Court and Rules Committee.

As the Commission states, if the Government accepts the recommendations, it will add the reform work to its legislation programme. If the Government rejects the recommendations, the Government is required to present a response to Parliament within 120 working days from the time that the report was tabled in Parliament.

Claims Funding Australia and Maurice Blackburn Lawyers support the broad aims of the NZ Law Commission’s work and the majority of its recommendations. Claims Funding Australia and Maurice Blackburn made detailed written submissions to the Commission and participated in the public consultation process to assist in developing an advanced, fit-for-purpose Class Actions regime in New Zealand, drawing on best practice in common law jurisdictions from around the world.

Claims Funding Australia and Maurice Blackburn are proud to have contributed to the New Zealand Law Commission’s law reform work in this important area. We are honoured to have had our joint submissions referred to extensively (over 280 times) by the Commission in their comprehensive final Report published on 27 June 2022.

_{[1] Terms of Reference (18 November 2019); Issues Paper (4 December 2020) - IP45 Class Actions and Litigation Funding | Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa; and Supplementary Issues Paper (30 September 2021) - IP48 Class Actions and Litigation Funding: Supplementary Issues Paper.}

Jason Geisker is a Principal Lawyer at Maurice Blackburn and Head of Claims Funding Australia, the litigation funding arm of Maurice Blackburn.

Simon Gibbs is an Associate at Maurice Blackburn Lawyers, legal advisers to Claims Funding Australia.

Claims Funding Australia & Maurice Blackburn Lawyers – NZLC Submissions

Joint Submission - Issues Paper | He Puka Kaupapa 45 (11 March 2021) 

Joint Submission – Supplementary Issues Paper | He Puka Kaupapa 48 (12 November 2021)