On Just Terms S2 E13: Across the Tasman: New Zealand's class actions landscape with Bell Gully

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Today, Jason Betts and I are joined by Sophie East and Jesse Wilson, partners at Bell Gully and two of New Zealand's leading class actions and complex disputes practitioners.
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While Australia has one of the most established class action regimes in the region, New Zealand has taken a different path by relying on representative proceedings, court-driven development, and an evolving approach to litigation funding and group claims.
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Yet the two markets are increasingly connected with claims, funders, and litigation strategies moving across the Tasman.
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In this episode, we'll explore how the New Zealand class actions landscape is evolving, what Australian and New Zealand companies should understand about emerging risks, and what the future may hold for representative and group litigation across both jurisdictions.
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Sophie and Jesse, thank you both for joining us.
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First, let's turn to the architecture.
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So New Zealand relies on representative proceedings under procedural rules rather than a bespoke statutory or codified framework.
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So how does the process work for bringing a class action in New Zealand and how does that differ from what we have in Australia?
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So in Australia, you have quite a detailed set of rules for bringing in class action, whereas by contrast, in New Zealand, there is one rule, one rule of procedure in our High Court rules, rule 4.24, which allows the representative to bring a claim on behalf of others who have the same interest in the subject matter of the proceeding.
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And that's it.
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That's all we have by way of a rule.
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So the rest of our class action jurisprudence has been developed by the courts.
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So this same interest test requires a significant common interest in the resolution of a question of law or fact arising in the proceeding.
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It doesn't need to be all issues in common between the representative bringing the claim and the class, but there has to at least be one significant issue in common between them.
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The courts in New Zealand have taken a reasonably liberal and flexible approach to this common interest test.
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It's not a high threshold to meet.
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But that see there are probably four things on which these things are reasonably significantly tested.
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So that is first of all, it must be an efficient way of bringing a proceeding.
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So the court will ask if a representative is bringing a proceeding on behalf of a class, it fulfills the objective of our High Court rules.
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That objective being the just, speedy, and an expensive resolution of proceedings.
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So that is one test applied early on.
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Secondly, the court will consider whether the claims as pleaded disclose an arguable case.
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That is not a high threshold, but it is something of a threshold on which they'll test a representative proceeding or class action as you call them.
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Thirdly, there needs to be standing between the representative plaintiffs and defendants.
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And all that means is that for each defendant who is named, there must be a representative plaintiff who has a claim against that particular defendant.
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And that has meant the downfall of at least one class action in New Zealand where plaintiffs and defendants didn't line up neatly together.
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And the last point, the fourth point, is that a representative proceeding under Rule 4.24 can't proceed if it will deny a defendant a defence they could otherwise have relied on in a proceeding against one or more members of the class.
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At the outset, I said that this is a reasonably flexible rule for bringing a representative proceeding in New Zealand.
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There are some aspects that are tested quite early on.
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Thanks, Sophie.
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And class certification, it's not one of the threshold criteria that we have in the Australian regime.
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But can you tell us a little bit about recent decisions of the New Zealand courts on certification?
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Certainly.
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I think probably it's not a recent decision, but it is quite important to the development of class actions in New Zealand in the last few years.
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And that's going back to 2020 to a judgment of our Supreme Court called Ross and Southern Response.
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That was a claim by some insureds policy holders following the earthquakes in Christchurch.
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And until that point, class actions in New Zealand or representative proceedings had been brought on an opt-in basis.
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That is, a representative would bring a claim under 4.24 on behalf of others.
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And then all of those other people in the class had to take a positive step to opt into the proceeding.
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And in 2020, our Supreme Court said, no, actually, representative proceedings can proceed under 4.24 on an opt-out basis.
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That is, a representative can bring a claim on behalf of everybody in a similar situation.
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And those people, those class members don't need to do anything.
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They are part of the class regardless.
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If they don't want to be a part of the class, they can opt out.
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So the test is almost the complete opposite.
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But naturally, that leads to much bigger classes of people.
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And so it's made it a more attractive market for litigation funders, which I know is something we'll come on to talk about.
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So that probably just sets the scene for the last six years in New Zealand, which has really been about the ground rules for these opt-out, these very large class actions after the positive indication by our Supreme Court.
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And some of the more interesting class verification decisions, I think, and speaking to some of the tests that I referred to earlier, one is the Simmons and ANZ class action.
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This is a class action against the bank ANZ in relation to our disclosure issues brought by bank customers.
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And importantly, in that case, there were two buckets of customers.
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There were those who entered into their loans pre-2015 and those who entered into their loans post-2015.
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And there were different limitation tests for those two groups.
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There was only one representative plaintiff against ANZ.
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And the court said, well, this representative plaintiff only has a post-2015 loan.
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You can't represent all of those earlier customers because that would mean that ANZ has denied its defense.
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It's denied running its limitation defence.
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So that's sort of a practical example of how the courts have applied that can't deny a defence test.
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There's also been three denials of representative orders in the 3AC Aleuka bond cladding class action.
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So that is a class action against a manufacturer of Aleukabond panelling, alleging that there is fire risk posed by that particular product.
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Class orders have been refused, 4.24 orders refused in both the High Court, then not by the Court of Appeal, and again by the High Court on a reformulated claim, on the basis that this was not an efficient way to proceed.
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There are so many differences between buildings and so many possible defenses that running this as a representative action was not an efficient way of proceeding.
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It did not fulfil the objective of our High Court rules.
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So another sort of recent example where a representative proceeding has been tested in that way.
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And probably one other one to flag is the representative proceeding against Johnson ⁇ Johnson in relation to cold and flu medication.
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Class orders under 4.24 were given by the court earlier this year in March 2026, allowing the claim to be bought as a representative proceeding on behalf of everybody in New Zealand who's bought those products in the last 20 years.
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And that's in relation to the Consumer Guarantees Act claim, claims in relation to the fitness or purpose of that product, although class orders were not given in relation to Fair Trading Act claims because that involved issues of individual reliance, which may differ between class members.
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So there is that degree of analysis early on by the court as to whether these orders are granted.
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But those are some recent examples of the court doing that sort of analysis.
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It's very interesting and the insights are helpful.
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You referred earlier to the relevance of third-party litigation funding, and I wanted to try to draw some analogies between Australia and New Zealand in that regard.
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As I know you know, in Australia it's very hard to tell the story of the emergence of class actions without also talking about the history and growth of third-party litigation funding as a relevant source of finance.
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I wondered if you could talk a little bit about what that environment for third-party funding looks like in New Zealand and maybe addressing a couple of aspects.
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One would be what the market for third-party funding looks like.
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And another would be do you apprehend that the decisions that funders make are different, different methodologies of deciding what to invest in or what not to invest in?
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And is that driven by scale or legal jurisprudence or something else?
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Maybe also lastly, the role of the courts.
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An Australian court, you know, purports to take a supervisorial role and a close scrutiny of how the funder operates.
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There are probably practical limitations on what the court can actually do.
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But interesting to see how the New Zealand courts have approached that question too.
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Yes, well, the answer to that is that we have quite a mature litigation funding market in New Zealand now, and it's it's definitely grown in the last five years.
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We have quite a prominent local litigation funder called LPF, which has been um responsible for the class actions against ANZ and ASP Bank that I referred to earlier on.
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It's also bought a class action against the New Zealand government on behalf of Kiwi fruit growers on the basis that the biosecurity was lapsed and it allowed a virus to cross our borders, which affected kiwifruit growers' binds.
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LPF have also funded a securities class action against the interior education group.
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And so they've been very active in New Zealand in the last few years.
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But that's probably the most prominent of our local litigation funders.
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But we also have seen an increase in class actions brought by offshore litigation funders.
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And two particular Australian funders, I'll mention, are OmniBridgeway and Courthouse Capital.
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So OmniBridgeway is see the big ASX-listed Australian litigation funder.
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It has bought the class action against Johnson ⁇ Johnson on the cold and flu medication, both in Australia and New Zealand now.
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It is also responsible for the class funding, the class action against the manufacturers of the Aluca Bond, CLAD and that I mentioned earlier.
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And Courthouse Capital, also an Australian litigation funder, has bought claims in New Zealand in relation to Toyota vehicles and also in relation to Hino trucks, both of them related again to Australian class actions also.
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So we are seeing quite a mature market, and it's really largely somewhat driven by a local litigation funder, but I'd say largely probably driven by the involvement of Oshore funders in New Zealand.
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As to your, I guess, question about considerations of size and scale, probably studying the obvious, but New Zealand's not a big country.
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We're only five million people.
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So for funders looking at the New Zealand market, that will be a relevant limitation.
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The size and scale of what they might recover is not going to be anywhere near like it is in Australia or bigger jurisdictions still.
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A relevant consideration also for funders here will be our cost regime.
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So we have similar to Australia in the UK, it is it is a loser-pays system, but with the important caveat that our costs are capped by a statutory scale.
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So what you get back as a successful party is in reality nothing like what you actually spend on the litigation.
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Now, for a funder, they will recover their legal fees and the ordinary course as project costs at the end when there's this judgmental sealment.
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But these things can take years.
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And on the way through, there are various procedural applications and things that happen.
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So the cost recovery along the way is probably a relevant factor that they'll need to build into their economic model as funders.
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And then turning to the third part of the question about how our courts treat litigation funding and their attitude to it, New Zealand courts have been quite open to the litigation funding model, but at the same time, they have exercised some degree of caution and testing about some aspects.
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So, for example, although our courts will say that they don't want to really be involved in funder economics and analyzing the percentage that the funder is seeking by way of return, they don't feel equipped to do that.
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There is, on the other hand, a practice now where if you are bringing a representative proceeding, a class action and it's a funded one, you ought to disclose the litigation funding agreement when you file the proceeding.
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The court will look at that and the court will look at it for a couple of things.
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And one of them is to ensure that the representative plaintiffs and the class members are getting advice that is independent from the litigation funder.
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So that will be tested.
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There'll be an automatic security for costs required if there's a litigation funder involved.
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And also the court will be involved in approving any settlement where there's a litigation funder.
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And we've seen some recent examples of that in the CBL litigation and the HENO class action.
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One other important judicially led development recently in relation to litigation funding, too, is the availability of CFOs, common fund orders.
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So the relevant background for that obviously is, as I said, for the last six years, our courts have said you can bring class actions representative proceedings on an opt-out basis.
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And the way that is economic for a litigation funder is that the litigation funder can take a return, a percentage return of everybody in the class, not just those who have signed a litigation funding agreement, but everybody who is in the class.
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But that requires the court to make a common fund order.
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And the court in Simmons and ANZ has said that it is has a jurisdiction to do so.
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So we are now seeing in these opt-out class actions in New Zealand, funders will seek a common fund order as well.
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And the courts are open to that.
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Just one quick follow-up, if you don't mind.
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The common fund order observation is interesting.
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In Australia, the case laws develop so that they're available, but really only at the end of the proceeding as part of a settlement or judgment.
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In New Zealand, has it developed in that way, or can you get a common fund order made at a relatively early stage of the proceedings?
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No, we've differed from Australia there.
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You can obtain a common fund order at the outset of the proceedings in New Zealand.
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So that the Court of Appeal said that was the case in Simmons and ANZ.
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And then recently, a High Court in the Johnson ⁇ Johnson class action has also granted a common fund order at the outset of the proceeding.
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So that's an important difference between Australia and New Zealand in that respect.
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And the funders would say that gives us more certainty in New Zealand because we know from the outset that we have that in place, whereas in Australia you have to wait till later on.
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Yeah, indeed.
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Aifer, it occurred to me as well that it's possible, based on Sophie's description, that the court is a little bit more proactive in assessing the position of group members in respect of funding agreements and the concept of making sure that legal advice has been attained, etc., is probably a standard higher than what we have here in Australia.
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Yeah.
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I wouldn't put that too highly though.
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It's not like the court automatically in every case goes through the funding agreement, makes sure the advice lines up.
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It's more that in several cases that's been raised as an issue by one of the parties.
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So the court will have the agreement.
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It's not part of a formula that the court at the outset of every representative proceeding goes through the funding agreement with a checklist.
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We're not quite at that level of scrutiny.
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Yeah.
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Understood.
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But those insights are really fascinating and they help inform just a couple of questions that I had as well in terms of your experience as you scanned the landscape there at the moment.
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And I was particularly interested to hear about the categories of representative or group claims that are most prominent in New Zealand at the moment.
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Are there particular sectors, for example, where you expect growth in the space or where they tend to be more in that high risk category?
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And then just the extent to which any developments that are occurring here in Australia are influencing case theories in New Zealand, as well as the trends that you're observing there.
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Yeah, thanks, Ava.
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By far the single most prominent category of claims that have been brought in New Zealand are securities class actions.
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That is, claims based on allegedly misleading public offer documents or breaches of continuous disclosure rules.
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There have been around half a dozen of those claims that have been brought, and those are the single largest category by volume.
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In recent years, there had been claims against building products manufacturers that have been litigated as class actions.
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There's more recently been a rejection of representative orders against the manufacturer of the aluminium composite panelling product that Sophie referred to.
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Beyond that, there's a good deal of variety in the types of claims that have been brought.
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We've seen claims for breaches of consumer credit disclosure rules.
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Those are the claims against the retail banks that Sophie alluded to a few minutes ago.
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We've seen claims against one of the government organized insurers in respect of claims handling and settlement processes.
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We've seen claims against the Crown itself in respect of its efforts to control the outbreak and spread of disease that affected orchardists.
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Beyond that, there's the consumer product litigation, which is the other one of the emergent categories.
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At the moment, we have the cold and flu litigation that Sophie referred to.
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There's also a claim against Toyota in respect of a certain engine part.
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So there's there is a real variety of claims.
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So certainly far fewer claims followed New Zealand than there are over the ditch.
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Turning to your second question, Ether, about what we see as the future.
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I expect that there will be a continued expansion of securities class actions in New Zealand and that that will follow trends in Australia.
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I also expect that there will be a continued focus on mass consumer claims, particularly around statutory consumer claims.
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The type of claim that I referred to a moment ago against the building products manufacturers, I expect is one that we may not see again in New Zealand for some time.
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Claims against cladding manufacturers were taken to trial against James Hardy and lost relatively comprehensively.
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Another claim against the same manufacturer had the funder withdraw funding during the course of the trial itself.
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So the relative lack of success of the building class actions, I think, will pose a question for litigation funders.
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And more fundamentally, I think there's some careful reflection about whether building claims involve a degree of building specific individual considerations that may not make them very suitable springboards for a collective action.
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I think the third aspect of your question was the implications of trends in Australia for New Zealand.
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I think the trends in Australia are extremely relevant to what happens in New Zealand for several reasons.
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First, the same essential facts or the same essential allegations often serve as the inspiration for litigation in New Zealand, where there have been assertions that a particular product or type product is ineffective or dangerous, whatever the case may be, that can serve as an inspiration for an action in New Zealand.
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The other reality is that many of the claims that are brought in New Zealand have been effectively follow-on claims from litigation that has been commenced in Australia, often involving the same litigation funder.
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And sometimes even involving the same legal team, or at least coordination with the legal teams.
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So there's a there's a degree to which what happens in Australia finds its way across the Tasman has quite significant implications for us here.
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That is a good segue just to ask you a little bit about.
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We've had the Eve and I have had the good fortune of working with you both now on some matters that have extended across the globe and then involved obviously some trans-TASM dimensions.
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And in some cases that's been because our respective clients are dual-listed, or maybe they're selling products in both jurisdictions and a range of other reasons.
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In terms of risk arising simultaneously in Australia and New Zealand, are we at the point where we might say there is an increase in concurrent litigation in each jurisdiction?
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And why that might be so if it is, and I guess separately to that or relatedly, is how do you see, or what do you see, to be the important factors that defendants who are managing litigation in both jurisdictions need to be out in front of in terms of alignment and strategy and approach to sort of associated risks with regulators, etc.
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What are some observations about how that can be successfully managed where you do have these dual jurisdictions with risks in train at the same time?
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Thanks, Jason.
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I think you've probably alluded to the answer there in a way, which is that as class actions in the class action market gets more established in New Zealand and where you have litigation funders who are bringing a class action in Australia, it seems to be a reasonably attractive proposition for them to duplicate what they've done, if they can do so, to launch it in New Zealand off the back of that.
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And that is where, as you say, you have companies that sell the same or similar products into the New Zealand market as they're selling in Australia, as with, you know, Hino trucks or as with the Johnson and Johnson and the Sudafed Coldal, et cetera, or where you have a company which is dual listed on the ASX and on our NZX, which there are a few of those also, and and and is the case with A2 Milk and has led to parallel proceedings in New Zealand, Australia and the shareholder class action there.
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So that is probably a trend that we will see more and more of, and I think more of, given, as I've said, the the New Zealand market gets more sophisticated.
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The risks probably are really just largely around misalignment of strategy.
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It is, I think, very important for companies, for boards to think about strategy in both jurisdictions at the same time.
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They operate on slightly separate tracks and considerations pop up at different times.
00:22:13.519 --> 00:22:16.880
And it's important for both jurisdictions to be talking to each other.
00:22:17.039 --> 00:22:29.279
So, for example, as talked about quite early on in New Zealand, you are thinking about some things that go to the merits, about, you know, whether certain pleaded things are arguable, whether the proceeding is an efficient one.
00:22:29.440 --> 00:22:36.559
Those are questions that we ask ourselves under High Court Rule 4.24 fairly early on in the New Zealand proceeding.
00:22:36.799 --> 00:22:48.240
So you want to be thinking about those things in conjunction with your Australian counterparts who may address some of those questions probably later in the piece because the rules work slightly differently there.
00:22:48.400 --> 00:22:55.440
And conversely, it may be that Australia gets to discovery earlier in a class action proceeding than New Zealand is likely to.
00:22:55.599 --> 00:23:01.599
So thinking about categories of discoverable documents across both jurisdictions and alignment there is important.
00:23:01.839 --> 00:23:08.799
So I think probably the sort of key risks are falling out of step and both jurisdictions not talking to each other.
00:23:08.960 --> 00:23:11.359
It needs to be, I think, a coordinated approach.
00:23:11.680 --> 00:23:12.559
That makes sense.
00:23:12.880 --> 00:23:22.720
One area that Jason and I have seen a significant increase in Australia is around the product liability consumer class action space.
00:23:22.799 --> 00:23:30.559
And a number of those that we've been working on in recent years include a personal injury dimension to those claims.
00:23:30.799 --> 00:23:39.599
I understand the position is a little bit different in New Zealand in terms of the extent to which that type of claim can be pursued with that framework.
00:23:39.759 --> 00:24:00.160
So I'd be just interested in your thoughts, Jesse and Sophie, on how that reshapes the class action risk profile in New Zealand and whether you see attempts to frame claims slightly differently, for example, around economic lulls, misrepresentation, or statutory breaches as a way of dealing with that distinction between the jurisdictions.
00:24:00.559 --> 00:24:00.720
Yes.
00:24:00.880 --> 00:24:12.480
So taking your first question first, EFA, class actions really do have no role to play in relation to New Zealand personal injury compensation.
00:24:12.880 --> 00:24:26.799
That reflects the relatively comprehensive statutory bar that New Zealand has introduced against private rights of action for personal injury, except under the ACC regime itself.
00:24:27.119 --> 00:24:42.799
So the essential social contract in New Zealand that has been in place since the mid-1970s is that personal injury is subject to publicly funded compensation, which is funded through various statutory levies.
00:24:43.039 --> 00:24:50.319
But the quinchrow for that is that we give up our rights of action to sue for our personal injuries.
00:24:50.400 --> 00:25:02.319
And so that has no doubt played a significant role in foreclosing the types of litigation that you are referring to that exists in Australia and in other jurisdictions.
00:25:02.640 --> 00:25:22.319
As to your second question, it is not the case that we have yet seen attempts to reframe claims for what is truly personal injury in the form of claims for economic loss or for other types of cert invention of the statutory bar.
00:25:22.640 --> 00:25:31.279
And that is because the New Zealand courts have taken a relatively robust approach to the enforcement of that statutory bar.
00:25:31.519 --> 00:25:54.480
Certainly, however, it has redirected the focus of litigation towards claiming for the cost of products, or to claim in respect of the consumer guarantees that are affirmed by Parliament and which are subject to certain types of redress under, for example, the New Zealand Consumer Guarantees Act, or in respect of the Fair Trading Act.
00:25:54.559 --> 00:26:05.759
But those are fundamentally different losses than the personal injury pipelines that have led the development of plaintiff side litigation and other jurisdictions.
00:26:06.160 --> 00:26:17.599
You mentioned earlier that the prevalence of securities shareholder class actions was a significant element in the New Zealand environment, and it is here too.
00:26:17.759 --> 00:26:26.400
And probably shareholder class actions, not exclusively, but they've driven, I guess, the emergence of class actions in Australia as a mainstream risk.
00:26:26.720 --> 00:26:45.039
When boards and senior management are dealing with the difficult concepts of how to make appropriate and justifiable public disclosures, including those that are compelled by law, talk a little bit about how they should be thinking about class action risk in that context in New Zealand.
00:26:45.440 --> 00:26:45.759
Yes.
00:26:45.839 --> 00:26:59.599
So I suppose that the starting point is that the obligations and compliance framework as to what must be done to comply with New Zealand's securities law and the rules of the relevant listed exchange are the same.
00:26:59.680 --> 00:27:20.559
And therefore the governance and management processes and what good governance looks like are the same, whether one is concerned with the public regulator, the FMA, the frontline exchange regulator, NZX, or the risk of private action by shareholders, including on a group or funded basis.
00:27:20.799 --> 00:27:30.079
What it does mean, though, is your question, Jason, it does mean that directors and management need to be thinking on two fronts to some extent.
00:27:30.319 --> 00:27:48.640
That is, non-compliance raises the risk of a type of claim by parties who have different incentive structures and different mindsets than the public regulators who most uh consistently enforce the rules of the public securities markets.
00:27:48.960 --> 00:28:03.599
And does that translate then to when one's dealing with a regulatory response, given the overlap that you've just pointed to, albeit different sort of philosophies, you're really trying to deal with you're managing that risk synthetically.
00:28:03.759 --> 00:28:12.880
Yes, I'm gonna say something for the market, I'm gonna be thinking about how private litigants funders might challenge me on that, but also, you know, how I respond to a regulator if challenged.
00:28:13.039 --> 00:28:17.359
And if I'm giving documents to a regulator, they're gonna end up in the hands of the private litigants.
00:28:17.440 --> 00:28:21.759
And that's those sorts of dual risks arise just as they would in Australia, I guess.
00:28:22.160 --> 00:28:23.920
Yeah, that's that's exactly right, I think.
00:28:24.000 --> 00:28:44.799
And the risks tend to, in practice, arise sequentially, because the starting point is usually the please explain from the public regulator that leads into an investigation process, potentially with the various information gathering exercises and investigation processes that the public regulator undertakes.
00:28:45.119 --> 00:28:59.599
When considering whether resolution with a regulator is in the interest of the organization, one eye needs to be had towards the risk of follow-on or piggyback funded class actions.
00:28:59.680 --> 00:29:22.319
And that requires, as you say, quite careful consideration as to, for example, if admissions are sought by the regulator, what are the precise terms of those admissions in terms of the statutory provisions and what follow-on claims might exist, or as to the details, the facts, and how those may link in to the logic of a privately organized claim.
00:29:22.480 --> 00:29:33.599
So that needs to be kept firmly in mind and as part of the strategic judgment around how to manage and ultimately resolve securities compliance concerns.
00:29:34.079 --> 00:29:35.119
That resonates.
00:29:51.759 --> 00:30:08.960
And second part of my question is when you look ahead three to five years, what are you expecting in terms of volume, pattern, and composition of class actions and what should Australian businesses be factoring into forward planning?
00:30:09.279 --> 00:30:10.079
Thanks, Ava.
00:30:10.480 --> 00:30:22.160
I think on the first part, realistically, I think the class actions will continue to be driven by our courts in New Zealand, and that really means funders are taking those actions.
00:30:22.400 --> 00:30:29.279
There was a New Zealand Law Commission report in 2022, which was issued as a very long report.
00:30:29.359 --> 00:30:34.480
It was issued after a lot of consultation with law firms, funders, and members of the public.
00:30:34.559 --> 00:30:37.440
And that recommended a statutory class actions act.
00:30:37.599 --> 00:30:45.440
It recommended a formal certification process for class actions, and it also recommended the regulation of litigation funding.
00:30:45.599 --> 00:30:53.119
But what then happened was that the following year, the then Labour government, when it received the report, made some noises about taking that to Parliament.
00:30:53.200 --> 00:30:56.319
But then very shortly thereafter, there was a change of government.
00:30:56.480 --> 00:31:01.599
And in the last three years, we haven't heard anything about it from the now national government.
00:31:01.920 --> 00:31:08.319
We're going into an election again at the end of this year, and possibly it may be on the agenda for the next government.
00:31:08.400 --> 00:31:09.359
It's hard to say.
00:31:09.599 --> 00:31:19.279
But I think it's probably safer to assume that the jurisprudence in this area will continue to be driven by courts and those that bring the claims rather than the legislature.
00:31:19.519 --> 00:31:34.559
In terms of the second part of your question, I think probably in the next three or five years we can expect more funded opt-out class actions now that there have been a few of them, particularly in the consumer space, so consumer products.
00:31:34.720 --> 00:31:46.240
And in particular, we think that products that are sold across both sides of the Tasman where there's a claim in Australia, it's likely to be some attraction if the numbers are right for bringing a claim in New Zealand as well.
00:31:46.480 --> 00:31:50.960
We're expecting some further developments in the area of shareholder class actions.
00:31:51.039 --> 00:31:54.640
And there's certainly some more activism there and some funder interests.
00:31:54.720 --> 00:31:56.880
So we think we'll see more of those.
00:31:57.119 --> 00:32:31.839
So in terms of what that means for Australian businesses and risk, I think it's just particularly thinking about not just with a mind to be located in Australia, a mind to the immediate domestic setting and framework, but thinking carefully about whether there might be risk if those products are also being sold into New Zealand or if the entity is also listed in New Zealand in terms of, you know, representations made, all of those types of things, but probably just applying a similar mindset that would expect those businesses to apply in Australia to New Zealand also, because the risks exist here too.
00:32:32.240 --> 00:32:34.000
You've both been very generous with your time.
00:32:34.079 --> 00:32:39.680
We thought we'd ask a few closing questions, if we may, just stepping back a little bit from the detail.
00:32:39.839 --> 00:33:00.880
One is that given I think it's important for the I'll call it the Australian market to be more aware of the risks associated with class action litigation in New Zealand, including concurrently, is there a development in the New Zealand landscape that perhaps isn't yet fully on the radar, but you think it's important for the Australian audience to be aware of?
00:33:01.200 --> 00:33:14.960
Yeah, Joyce, I think one of the key issues that has been the subject of soul searching in New Zealand for some time is whether the settings for liability are quite right for directors and listed issuers.
00:33:15.279 --> 00:33:29.279
There's a program of work that the Law Commission has underway in relation to directors' duties generally, but more specifically thinking about the listed markets and the securities class action risk we've been discussing.
00:33:29.599 --> 00:33:51.519
One important development underway at the moment is that the government is consulting on capital markets reform and has identified liability settings around continuous disclosure for listed issuers and directors as a particular area of concern and where reform may occur.
00:33:51.759 --> 00:34:04.400
The issue is that in New Zealand, liability for listed issuers is strict for continuous disclosure breaches, which creates an issue in terms of lack of harmonization with the Australian position.
00:34:04.480 --> 00:34:20.880
And so there's a question as to whether there should be some moderation on that front, and that will flow into the risk profile for the companies themselves, but also then the directors who may be said to have been involved in that alleged contravention.
00:34:21.119 --> 00:34:23.920
So then consultation's underway at the moment.
00:34:24.000 --> 00:34:27.280
It will close at the end of August this year.
00:34:27.519 --> 00:34:38.800
It remains to be seen whether much will occur substantively before the general election in New Zealand this November, which may affect the future of those reforms.
00:34:38.960 --> 00:34:44.400
But that's something that's potentially quite significant and people might want to have on their radar.
00:34:44.880 --> 00:34:46.079
Yeah, that that's important.
00:34:46.239 --> 00:34:49.599
We hopefully can check in with you again if there's movement there.
00:34:49.840 --> 00:35:12.960
And lastly, broader observations, optimistic or otherwise, about how the courts in our respective jurisdictions, because I know that you look closely at the judgments coming out of Australia as we increasingly are in New Zealand, how the courts and I guess companies who are functioning in both markets are rising to the challenge of dealing with increasingly complex class action litigation across both jurisdictions?
00:35:13.360 --> 00:35:31.360
Yes, I think firstly, and probably with a focus on New Zealand, as Sophie mentioned, there is now a body of appellate decisions in New Zealand that have given a level of procedural maturity, if I could call it that, to the New Zealand class action reject.
00:35:31.599 --> 00:35:37.280
They give some more meaningful guidance and clarity to plaintiffs and defestants.
00:35:37.599 --> 00:35:40.880
I think that is help New Zealand to come up the curve.
00:35:41.280 --> 00:35:50.639
What we've also seen, though, is that in New Zealand, no class action has ever gotten to a stage two of trial.
00:35:50.800 --> 00:35:55.280
And so it's important to have regard to what we see happening in Australia.
00:35:55.440 --> 00:36:03.119
And one of the things that we do see happening is a number of the class actions failing on the merits at trial.
00:36:03.360 --> 00:36:39.119
And I think one of the implications for New Zealand is I think when thinking about a future legislative codification of a class action regime, I think that initial phase of certification or giving the courts directions as to the bringing of a representative action or a class action is quite an important vetting mechanism because it's important at the outset to decide is this a proceeding that is truly suitable for determination on a collective basis and should it move forward with the permission of the court?
00:36:39.280 --> 00:36:48.960
I think some of the failure of claims in Australia, I think, to my mind at least, lend weight to the value of that initial filtration mechanism in New Zealand.
00:36:49.280 --> 00:36:50.639
Yeah, that's insightful.
00:36:50.719 --> 00:36:54.559
And I must say we've drawn a lot out of today's discussion.
00:36:54.800 --> 00:37:06.159
Although our systems come from different points of genesis, there's a lot of parallels between how the courts are dealing with class actions and a lot of parallels in terms of the legal and practical issues that arise.
00:37:06.400 --> 00:37:16.400
So your expertise and your discussion today in that space has been excellent and will really illuminate some of what's not yet fully understood to the Australian audience.
00:37:16.480 --> 00:37:23.119
And also, again, we're very thankful we've been able to collaborate with you and lean on you in different matters where we're working together.
00:37:23.280 --> 00:37:27.360
So thank you so much for joining us today and also being so generous with your time.
00:37:27.440 --> 00:37:30.719
We've got a lot out of that, and we hope to check in again in the not too distant future.
00:37:31.039 --> 00:37:32.320
Then our pleasure, thank you.
00:37:32.559 --> 00:37:33.519
Thank you very much.
00:37:35.920 --> 00:37:39.679
Thanks to the audience for joining us on this episode of On Just Terms.
00:37:39.840 --> 00:37:53.920
One of the themes that stood out from today's discussion is that while Australia and New Zealand have, to some extent, adopted different approaches to class actions, the issues facing corporates on both sides of the Tasman are becoming increasingly interconnected.
00:37:54.159 --> 00:38:07.679
Litigation funding, regulatory developments, cross-border claims, and evolving theories of liability mean that businesses cannot really view litigation risk through a purely domestic lens if they ever could.
00:38:07.920 --> 00:38:16.719
We also heard that New Zealand's class action landscape continues to evolve through the courts, even as debate continues around a formal legislative regime.
00:38:16.960 --> 00:38:31.280
Against that backdrop, boards and management teams should be paying close attention to governance and disclosure practices and emerging litigation trends, particularly in areas where class action activity is expected to grow in both jurisdictions.
00:38:31.519 --> 00:38:40.239
Thanks to EFA and my thanks to Sophie East and Jesse Wilson from Belgaly for sharing their excellent insights and perspectives.
00:38:40.480 --> 00:38:44.400
We look forward to seeing you on the next episode of On Just Terms.