Southern Response Class Action: New Zealand litigation

08 April 2024 BY SIMON GIBBS

The Litigation

The Southern Response class action involved approximately 3,000 New Zealand homeowners affected by the Canterbury earthquakes in 2010-2011. The claim alleged that Southern Response Earthquake Services Limited, a state-owned insurance entity, engaged in conduct that led policyholders to settle their insurance claims for amounts below their policy entitlements.

CFA provided funding support for the litigation after it had commenced. The proceedings were complicated by competing individual litigation, procedural novelty, appeals to superior courts, and parallel remediation action proposals initiated belatedly by the New Zealand government.

CFA’s financial support and strategic insights, combined with excellent legal representation, helped deliver a superlative outcome for class members and the legal team.

The Value-Add

CFA’s involvement added significant value to class members and the legal team:

• Financial Certainty: CFA provided:
  • Legal fees and disbursement funding
  • Adverse costs indemnity
  • Security for costs protection
  • Long-term financial backing and support across protracted litigation lasting more than three years
     
• Strategic Collaboration: CFA worked collaboratively with the legal team to offer:
  • Strategic insight and guidance on negotiating with government stakeholders, sharing subject matter expertise in class actions at no additional cost to clients or the legal team
  • Guidance on the structure, form, and substance of complex settlement negotiations, damages analysis, and settlement administration procedures
     
• Legal Support: CFA supported an appeal to New Zealand’s apex superior court to resolve crucial points of law.

The Result

• CFA helped secure an outcome for approximately 3,000 class members that returned 100% of policyholders’ entitlements, plus interest.
• CFA leveraged its subject matter expertise to provide strategic input on class action law in New Zealand.
• CFA assisted in complex negotiations with the government and insurers to help successfully resolve claims.
• CFA provided financial backing to resolve complex and novel points of law, contributing to the development of common law in New Zealand.^[1]

_{[1] Affirmed the first ever “opt out” class action; significantly expanded and clarified the scope of the Court’s supervisory power over class actions under the representative rule in HCR 4.24; the first decision establishing the criteria a Court must consider when approving a settlement or discontinuance; the first “opt out” notification order and the first iteration of principles by which class notification and communications with class members are to be governed.}