Friday, June 27, 2025

1:15 PM - 2:00 PM

Rongomātāne Hall, Tākina

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Overview

Richard Potter and Scott Russell, Russell van Hout

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Details

Our presentation will cover how recent changes in the courts’ approach to class actions could affect the construction industry. In particular: Recent Court decisions about class actions that have altered the legal landscape (and made litigation funders more likely to fund NZ class actions) by establishing that: (i) “Opt out” class actions (in which the default position is that members of the class are all included in the proceeding, and members need to formally “opt out” if they do not wish to be included in the litigation) are permitted by the High Court Rules; (ii) The High Court can make Common Fund Orders (CFO), i.e. orders that all members of a class action are bound by payment terms that have been agreed between a litigation funder and the “representative plaintiffs” (specific members of the class who represent all members). CFOs determine what contribution each class member makes to the sum of money paid to the litigation funder at the conclusion of the proceeding. This will make litigation funders more likely to fund class actions and, therefore, is likely to increase the number of class actions in New Zealand. These developments could lead to class actions involving the construction industry: (i) Class actions concerning developments of large numbers of buildings with similar characteristics that were built with the same defects; (ii) Class actions against manufacturers of defective products; (iii) Class actions against territorial authorities for allowing the use of defective products; (iv) Class actions against, or arising out of the licensing of, private consenting providers who act negligently; What this may mean in practice: (i) Changes to insurance requirements, premiums, etc for entities who may face risk of class actions (ii) Changes to how territorial authorities conduct building consent, inspection, and code compliance certification processes (iii) Changes to the approach taken during litigation / dispute resolution concerning the construction industry