The Big Picture: Class Actions

The Big Picture Class Actions

MAY 2025

Contents

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The Big Picture Class Actions

An evolving framework

04

A brief history of class actions in New Zealand

05

Shaping class actions through the courts

06

The arrival of the mass class action

07

Avoiding a claim

09

Litigation funders – the power behind class actions

10

Waiting for a Class Actions Act

12

‘Follow-on’ class actions

15

Our team

16

Our class actions practice

16

Endnotes

17 2

Class actions are now a part of New Zealand’s legal system, driven by litigation funding and with encouragement from the courts.

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The Big Picture Class Actions

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An evolving framework Globally, class actions are being used to pursue compensation from a range of sectors, to assign responsibility for alleged harm and to drive action. In New Zealand, class actions are now a popular vehicle for claims with a common theme but which may not have been viable to pursue by individuals alone, or that otherwise appeal to the commercial instincts of the litigation funders driving these cases.

In the past five years class actions have moved from being a threat on the horizon to a regular feature in New Zealand’s courts.

The establishment of class action lawsuits in New Zealand has happened with little fanfare, flying under the radar except for the headlines from a handful of cases. This lower profile is in part due to the absence of personal injury lawsuits under local laws, the source of the frequent punitive payouts seen in US courtroom dramas. It is also because the introduction of a dedicated Class Actions Act, recommended by the New Zealand Law Commission | Te Aka Matua o te Ture in 2022, hasn’t progressed under successive governments.

extent possible. Meanwhile, activity here is being driven by the availability of third-party litigation funding rather than a groundswell of consumer action.

Class actions have a role to play in offering access to justice. They are also costly and time consuming to litigate and defend. They can be used to leverage settlements from defendants who, even though they may have valid defences, are prejudiced by the sheer size of the claims they are facing and the lack of usual protections that apply in ordinary, non-representative litigation.

In The Big Picture Class Actions, we take a closer look at what that means: from what the key judgments tell us, to what can be learned from practical, hands-on experience managing class actions. What unique factors are emerging in New Zealand? What are the current trends, and what do businesses that might be vulnerable to class action activity need to consider?

In the absence of a statutory regime, the courts have proceeded to fill in the gaps in New Zealand’s class actions framework.

They are faciliating what is described locally as ‘representative actions’ to the greatest

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The Big Picture Class Actions

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A brief history of class actions in New Zealand 20081 HOUGHTON v SAUNDERS (FELTEX LITIGATION) New Zealand’s first class action is brought by 3,600 Feltex Carpet Company shareholders alleging that the prospectus issued by the failed company was misleading. This marks the advent of modern representative actions in New Zealand.

Shareholders have to ‘opt in’ to participate.

2013

2015

COOPER v ANZ BANK NEW ZEALAND LTD Some 13,500 customers of National and ANZ banks bring a class action regarding bank fees that they paid. This is New Zealand’s first mass consumer class action.

STRATHBOSS KIWIFRUIT LTD v ATTORNEY-GENERAL Kiwifruit growers file a class action against the Crown alleging negligence in allowing the bacterial kiwifruit vine disease Psa-V into the country. This is one of the few tort-based class actions to emerge.

2018

2019

ROSS v SOUTHERN RESPONSE EARTHQUAKE SERVICES LTD

CRIDGE v STUDORP LTD Two sets of homeowners file a class action against Studorp and James Hardie New Zealand alleging the ‘Harditex’ sheet cladding system was defective and caused their homes to suffer moisture damage. In 2016, the Court of Appeal allows representative plaintiffs to bring their claim on an ‘opt in’ basis, with the class eventually including another 144 homeowners. In 2024, the Court of Appeal upholds the High Court’s decision that while cladding manufacturers owe building owners a duty of care in negligence, James Hardie had not breached its duty.

CBL PROCEEDINGS

One of two class actions relating to unresolved insurance claims after the Christchurch earthquakes. The Supreme Court rules ‘opt-out’ class actions are allowed under New Zealand’s procedural rules, meaning claims can be brought on behalf of all persons who fall within a class without their explicit agreement – even if they don’t know about it.

Until now, class actions had only proceeded on an ‘opt in’ basis.

After the collapse of the CBL Corporation, CBL shareholders file two class actions against CBL’s directors and related trustees: one by institutional shareholders and the other by overseas institutional shareholders and individual investors.

Regulators separately bring three proceedings.

2020 FULLARTON v AROWANA INTERNATIONAL LTD Investors who brought Intueri Education Group shares during its 2014 initial public offering, or after, file a class action alleging IPO documents were misleading and Intueri had breached its disclosure obligations. The case settled in 2024, with the Court approving settlement terms in early 2025.

SCHOOL

CLOSED

2020 BODY CORPORATE NUMBER DPS 91535 v 3A COMPOSITES GMBH A claim is filed against the manufacturer and two New Zealand distributors of Alucobond cladding products, alleging Alucobond products are combustible (citing the Grenfell tower tragedy) and don’t comply with New Zealand Building Code requirements. Plaintiffs seek an ‘opt-out’ order, but both the High Court and Court of Appeal decline, with the latter saying it would likely result in inefficiency, poor use of court resources, and unjustified, disproportionate burdens on defendants.

2021 SIMONS v ANZ & ASB A class action is filed against ANZ and ASB banks on an ‘optout’ basis, alleging customers didn’t receive correct disclosure from the banks on their loans. It followed a settlement relating to these issues between the banks and the Commerce Commission.

In 2024, the Court of Appeal granted the litigation funder a ‘common fund order’ on the commission it could take from the class.

2022 WHYTE v THE A2 MILK COMPANY LTD Shareholders in milk company a2 file class action proceedings in Australia and New Zealand over statements the company made to the ASX and NZX concerning an earnings guidance. The New Zealand High Court provided guidance on managing class actions where there are parallel proceedings in Australia. The New Zealand case is stayed.

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2023 T&S CONSTRUCTION 2015 LTD v TOYOTA NEW ZEALAND LTD A class action is filed against Toyota alleging vehicles manufactured from 1 April 2015 to 31 May 2018 had diesel engines of unacceptable quality. Plaintiffs claim Toyota engaged in misleading and deceptive conduct in marketing and selling the vehicles. This follows a similar class action in Australia.

The Big Picture Class Actions

2025 JOHNSON & JOHNSON

HINO TRUCKS

New Zealand’s largest proposed class action to date (by size of the class). The plaintiffs purport to represent all purchasers of Johnson & Johnson branded cold and flu medication in New Zealand over the last 20 years.

They allege that the medication contains an active ingredient that is ineffective to relieve nasal congestion and that class members have suffered loss as a result.

Purchasers of Hino trucks file a class action against Hino Motors and its New Zealand distributors alleging they were misled regarding fuel efficiency and vehicle emissions claims.

This follows similar class actions against Hino in other jurisdictions.

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Shaping class actions through the courts

Unlike other countries, New Zealand doesn’t have a legislative regime governing class actions.

Class actions have developed purely as a result of guidance from the courts, rather than through parliamentary consideration or law making.

Our courts have done this based on a single rule contained in the procedural rules of court: High Court Rule 4.24. This allows a plaintiff (known as the “representative plaintiff”) to bring a claim on behalf of people who share the “same interest in the subject matter of the proceeding”.

It is the basis for class actions in New Zealand.

Initially our courts started with ‘opt in’ class actions, meaning a representative plaintiff could bring a claim on behalf of others with the “same interest” as them, provided that those others elected to be part of the claim.2 However, in 2020, the Supreme Court in Southern Response Earthquake Services Ltd v Ross said that Rule 4.24 also allowed ‘optout’ class actions. This means a representative plaintiff can bring a claim on behalf of all those with the “same interest” and those people are automatically part of the claim unless, and until, they choose to opt out.3 The Supreme Court said the opt-out approach will be appropriate in most cases and is likely to significantly enhance access to justice.

When courts consider whether to allow class actions to proceed under Rule 4.24, and on what terms, the Supreme Court’s statements of policy in the Ross case mean the focus has been on access to justice considerations for the plaintiffs. The Court of Appeal’s approach to litigation funding orders in Simons v ANZ Bank4 is a recent example. The Court of Appeal granted the litigation funder a “common fund order” – allowing the funder to take a percentage of the recovery of all opt-out class members – because it said this would enhance access to justice by providing certainty in the way that representative proceedings are funded.

That said, there are also some recent examples where the Court has declined to allow a class action to proceed under the rule, because it said the representative plaintiffs were not sufficiently representative of the proposed class members.5

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The Big Picture Class Actions

In 3A Composites GmbH, the plaintiff building owners sought to argue issues that weren’t raised on their own claims or the claims of any class members.

The Court of Appeal said this cast doubt on whether the representative plaintiffs sufficiently represented the proposed group of class members.

In Simons v ANZ Bank, the Court of Appeal limited the class against ANZ to only those people subject to the same limitation period as the representative plaintiff: otherwise ANZ would be restricted in the way it ran a viable limitation defence.

In Toyota New Zealand, the High Court recently held that the plaintiffs were unable to add new defendants where no representative plaintiff had a cause of action against the defendant.6

So, while our courts have been supportive of the development of the class action jurisdiction, and the role of class actions in facilitating access to justice, plaintiffs have to organise themselves so they don’t “overreach” when it comes to who they claim to represent, and in a way which doesn’t deny a defendant the ability to run viable defences.

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The arrival of the mass class action

Opt-in v opt-out There are two mechanisms for determining who forms part of a class action.

Opt-in proceedings require people who share the same interest as the representative plaintiff to proactively elect to become part of the class by a certain date. Otherwise, even though they might be eligible, they won’t be included in the claim.

Opt-out proceedings include all people who share the same interest in the class unless and until they take a positive step to remove themselves.

In recent years we have seen the arrival of the mass American-style class action in New Zealand, otherwise known as an ‘opt-out’ class action.

Initially, opt-out proceedings were considered too radical a departure from existing rules and expressly disallowed.7 That approach changed with the 2020 judgment in Southern Response Earthquake Services Ltd v Ross which remains the leading decision on opt-out class actions.

In practical terms, opt-out class actions allow for larger classes. Opt-out class actions may proceed without any positive action from class members, who may not even be aware of the claim. As a result, opt-out proceedings are particularly attractive to litigation funders. A prime example is the class action recently filed against Johnson & Johnson where the representative plaintiff seeks to represent all purchasers of Codral, Sudafed and Benadryl products in New Zealand in the last 20 years.

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The Big Picture Class Actions

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How an opt-out class action works

COURT APPROVAL

NOTICE REQUIREMENTS

REGISTRATION LATER

A representative plaintiff requires court approval to commence an opt-out class action.8 At that initial stage, the court will assess whether there is a common interest between the proposed class and whether members should opt in or opt out.

In opt-out proceedings, class members must be told about:

A class action is normally undertaken in stages.

• the commencement of the claim;

The first stage determines the issues common to all members of the class. If the plaintiffs are successful (in whole or in part), a subsequent stage (or stages) will address questions of individual relief for class members and any counterclaims by defendants. The class must essentially ‘close’ so that a class member can elect to have their individual issues assessed.

At this point, in an opt-out class action, individual class members may need to take positive steps to identify themselves.

The New Zealand Supreme Court has said in general the approach sought by the party bringing the claims should be adopted, unless there is “good reason” to do otherwise.9 The Court explained there may be good reason not to allow an opt-out claim, even if the plaintiff seeks it, where:10 • there is a real risk class members may be negatively affected (for example, where there are counterclaims against specific class members); • the size of the class is small; or • an opt-in approach may be required at a later stage of the proceedings.

That list is not exhaustive. Other potentially relevant considerations have not yet been tested in New Zealand. For example, a weak claim may favour opt-in over opt-out. The United Kingdom Supreme Court is currently considering whether the merits of a claim could determine whether a proceeding is opt-in as opposed to opt-out.11

• their right to opt out; • how to opt out; and • the implications of their decision to either opt out or stay part of the claim.

The form of notification and method are not prescribed, but the Court may have a role in approving notices.12 Practically, if the parties cannot identify who individual class members are (for example in a mass consumer claim), notices may be by way of public advertising.

Settlement can occur at any stage of an opt-out class action and class members must be given notice prior to settlement or discontinuance. In opt-out proceedings the court will also need to approve any settlement or discontinuance.13 Whether class members are given timely notice of the essential elements of the settlement will be relevant to obtaining court approval.14

A class member will also be required to identify themselves to receive the benefits of any settlement. Other jurisdictions require closure of an opt-out class before mediation or settlement,15 but the New Zealand courts have not yet addressed that issue.

COMMON FUND ORDERS Last year the Court of Appeal approved common fund orders to facilitate the funding of opt-out class actions.16 This is a significant development which we address later.

Opt-out class actions allow for larger classes – and class members may not even be aware they are part of a claim.

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The Big Picture Class Actions

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Avoiding a claim

1. Get disclosure right, to your customers and your shareholders.

2. Make sure what you say about your business and products is accurate (and not misleading by omission).

3. Follow up on your promises.

4. Monitor complaints from customers to identify any trends where customers are discontented about the same issues, and seeking a remedy.

What should businesses consider when it comes to the potential for class actions?

The rise of mass consumer class actions and ‘follow-on’ claims may appear daunting, but businesses can take action to mitigate the risks.

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5. Keep an eye on social media and understand what customers are thinking.

6. If you are resolving issues with a regulator, keep your eyes open to the risks of a follow-on claim. If possible, avoid language that could be used as a ‘hook’ by class action plaintiffs.

If a claim does occur, then understanding class action procedure and developing a strategy will be critical.

The Big Picture Class Actions

At higher risk?

• Companies that manufacture, market or distribute consumer products.

• Companies that provide consumer services.

• Companies or directors involved in equity capital raisings.

• Companies that are publicly listed and must comply with continuous disclosure obligations.

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Litigation funders – the power behind class actions

Where do litigation funders fit in?

Class actions are often long and hard fought, and there are significant legal costs involved for both plaintiffs and defendants. In cases where there are many individual plaintiffs with relatively small claims, it may not be economic for those consumers to bring a claim themselves.

Litigation funders are commercial entities that have no interest in the claims themselves but pay for some or all of the cost of bringing a class action in exchange for taking a proportion of the judgment or settlement for the claim.

Most commonly, a litigation funder will: • pay for all costs associated with bringing the claim (such as legal fees, experts’ fees and disbursements); • pay any financial security required by the courts (called “security for costs”), generally needed in funded litigation;17 and • provide an indemnity to cover potential costs exposure for the representative plaintiffs.

In return, if a case is successful, the litigation funder will recoup its costs and receive a portion of the recovered amount. It is a “high risk, high reward” model. If the class members win, or obtain a settlement, the litigation funder will get a cut. If the class members’ claim isn’t successful, the litigation funder has paid for proceedings but won’t get anything.

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The Big Picture Class Actions

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Who are the litigation funders?

Regulation or controls?

How litigation funders are shaping the class action landscape

A note of caution

The first New Zealand class action funded by litigation funders was the Feltex Carpets shareholder class action in 2008.18 Since then, a significant portion of New Zealand’s class actions have been funded, including our largest and most high-profile class actions.19

In New Zealand litigation funders are not specifically regulated in any way. In contrast, Australian litigation funders are required to hold an Australian Financial Services Licence.

In the United Kingdom there is a model of voluntary regulation, and members of the Association of Litigation Funders must abide by a code of conduct.

Litigation funders are the driving force behind class actions in New Zealand. The class actions that make commercial sense to funders will be pursued. But this may come at the cost of assessing the true merits or need for the litigation.

While litigation funding may have its upsides for plaintiffs, it is not without risk.

The Law Commission identified at least 11 funders operating in New Zealand in 2020, with both local and international operators present.20 The most prominent now are: • LPF Group (New Zealand): the largest locally-based litigation funder.

• Omni Bridgeway (Australia): one of the largest and most active litigation funders globally.

• Harbour Litigation Funding (United Kingdom): the largest privately-owned dedicated litigation and arbitration funder globally.

Each funder will have its own method for determining which litigation makes commercial sense to fund. It has been estimated that less than 10 per cent of cases considered by litigation funders pass an initial screening test.21

In May 2022, the Law Commission recommended regulation and court oversight of litigation funding in order to improve transparency and accountability of litigation funders and address key risks (including funder control over litigation, conflicts of interest, funder profits and funder capital adequacy).22 However, the suggested reform has not progressed to date.

Our courts do exercise some control over litigation funders with general mechanisms for managing litigation (such as strike outs and security for costs). They have also developed principles to ensure funding agreements won’t amount to an abuse of process and that there are no obviously unfair, oppressive or misleading aspects to the arrangements.23

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Funder-friendly court decisions have contributed to the growing influence of litigation funders in New Zealand. Allowing opt-out class actions has increased the class sizes,24 and therefore potential funder payouts. Coupled with this, the move to allow common fund orders means that funding agreements between a litigation funder and the representative plaintiff can bind all members of the class. In other words, in return for funding the case, the funder can take a cut of every class member’s proceeds, whether that class member signed an agreement with the funder or not. The Court has said this is necessary to provide funders with financial certainty.25 Given the funders’ financial incentives, the claims that will be most attractive to them will involve large plaintiff groups or large aggregate monetary claims. Consequently, there has been a rise of large consumer representative claims in New Zealand. Claims that are perceived to be ‘easy to prove’ are also likely to be attractive to funders, such as claims that ‘follow on’ from a regulator’s finding of misconduct. Notwithstanding their appeal to funders, it does not follow that these claims have the most merit.

The Big Picture Class Actions

• There is the potential for conflicts between a funder and a plaintiff’s interests. This is particularly so at settlement, where different considerations may motivate litigation funders with a commercial interest in the claim as opposed class members with a personal stake in the claim.

• Litigation funders may become unable to or unwilling to meet their financial obligations and that likely will result in the end of a claim. Successful defendants may be left with significant loss (likely greater than any security provided) and court resources will have been wasted.

Litigation funders are the driving force behind class actions in New Zealand, but to date they have enjoyed no regulation and limited oversight. It will be interesting to see if there is any political momentum to pull this back at any point.

A CAUTIONARY TALE:

In the Feltex litigation successful defendants faced 13 years of uncertainty and litigation costs, only for the funders to pull out and the claim to ultimately be struck out.26 11

Waiting for – a Class Actions Act Bell Gully

The Big Picture Class Actions

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Waiting for – a Class Actions Act

ew Zealand’s lack of a class N actions regime is an outlier.

Reform is needed – clear rules would bring certainty and reduce costs and delays in these complex, high-stakes cases.

The legislative journey New Zealand is an outlier among common law jurisdictions: it has no statutory class actions regime. Unlike Australia, Canada, the United Kingdom and the United States, there is no legislation or regulation setting out the rules for bringing a class action.

This is widely recognised as unsatisfactory.

Class actions are typically complex, drawnout and costly proceedings. They can often entangle class members, defendants and courts in years – sometimes decades – of litigation. There is an evident need for a rule book.

In May 2022, the Law Commission recommended a Class Actions Act as a “clearer, more certain and more accessible” source of law on class actions.27

The Act would: • set out the procedure for class actions from commencement through to settlement or judgment; • explicitly state the role and duty of the plaintiff representing the class; • prescribe procedures for concurrent class actions; • establish the test for certification of a class action (i.e., court approval for the class action to proceed); and • specify processes for potential class members to choose whether or not to participate in the class action (opting in and out).

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The then Government was supportive of the Law Commission’s recommendations in principle.28 In particular, it accepted that a Class Actions Act would provide clarity and could enhance access to justice.

However, the Government cautioned that it would take time to advance the reforms, and resourcing would need to be balanced against other priorities.

The 2023 elections saw a change in government. To date, the current Government has shown no particular appetite for picking up the Law Commission’s report. Class action reform is not the subject of government policy, nor has it been raised in Parliament by any MP in this term.

The Big Picture Class Actions

We don’t expect much progress to be made towards a Class Actions Act in the current environment, where the political focus is on economic growth and competition.

That is not to say that a Class Actions Act will never see the light of day. In Australia, 15 years passed between the referral of class action legislation to the Australian Law Reform Commission in 197729 and federal legislation coming into effect in 1992.30 We consider it a matter of time before class action reform advances – hopefully with more haste than in Australia.

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Five key points

High Court Rule 4.24 says nothing about issues of class formation, case management, costs orders or settlement. It has been “required to bear a weight for which it was not designed”.31 So, in the absence of a statutory regime, the New Zealand courts have incrementally developed the procedural rules on class actions as issues have come before them.

Five key points have emerged from New Zealand’s reliance on courts to fill the gap left by a Class Actions Act.

1

All the rules have been ‘up for grabs’. This has led to very prolonged litigation. Parties have disputed procedure in rounds of interlocutory (pre-trial) disputes – and then appeals.

Those arguments have spanned issues of class formation, certification, discovery, hearing procedure and funding arrangements. In the Feltex litigation, 13 years passed between the filing of the claim and its discontinuance – but only after 50 judgments were issued.

2 3

There is a low threshold for certification of a class action. Under the High Court Rules the proposed class must share the “same interest in the subject matter of a proceeding”. Very few prospective class actions have failed on this basis – with notable exceptions.32 If New Zealand introduced a robust certification process, that would alleviate what the Law Commission has recognised is a “significant burden” on defendants and the court system.33

The courts have generally created a plaintiff-friendly environment for class actions.

Where in doubt, courts have relied on the touchstone in the High Court Rules – the need to secure “the just, speedy, and inexpensive determination of any proceeding”.34 Practically, justice (for claimants) has tended to win out over speed and expense.

The Supreme Court has, indeed, confirmed that the court will generally adopt the procedure sought by the applicant unless there is good reason to do otherwise.35

4 5

Class action funding has been the subject of little regulation. The courts have generally not considered themselves regulators of litigation funders.36 They have, however, been enablers of litigation funding. Most recently the Court of Appeal permitted common fund orders, including at an early stage of a proceeding, to ensure that funders have certainty about the shared proceeds of a class action if the claim succeeds.37

Ultimately, class action rules remain uncertain. Very few class actions have resulted in judgment following trial. Some issues have only ever been tested in the High Court. Others have never been considered, either because they have not arisen in the cases brought to date (for example, class closure orders) or because the Court will not always intervene (for instance, in class action settlements). We consider procedural uncertainty has contributed to reduced class action activity in New Zealand, relative to comparable jurisdictions.

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The Big Picture Class Actions

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‘Follow-on’ class actions New Zealand corporates are increasingly regulated, and investigated, by government agencies. Those investigations frequently result in settlements, as corporates pragmatically seek certainty of outcome and an end to enforcement action.

In an environment of growing ‘follow-on’ or ‘piggyback’ class actions, such finality may be an illusion.

Increasingly, litigation funders in New Zealand are searching for opportunities to bring class actions that rely on past regulatory investigations or enforcement action. A self-reported breach or admission of liability can form the basis for a broader compensatory claim by customers or investors.38 Documents provided to regulators, even if supplied under compulsion, can be disclosed to prospective claimants and assist their assessment of whether to bring a class action.39 The past regulatory outcome need not be enforcement action: evidential or public policy considerations that may limit regulators don’t apply to private claimants.

They may seek compensation even when regulators decide not to act.

Follow-on class actions are, accordingly, an attractive proposition for a litigation funder.

They usually commence on a stronger evidential footing, may be targeted in scope (focused on any corporate admissions), and are run at reduced cost.

Historically, follow-on class actions have been rare in New Zealand. In 2020, the Law Commission report on the sector didn’t identify any representative actions that had Bell Gully

The Big Picture Class Actions

followed enforcement action by a regulator.40 That is changing.

A high-profile consumer class action has since been brought against two major retail banks, ANZ Bank and ASB Bank, alleging breaches of disclosure rules relating to home loans. It follows settlements reached by these banks and the Commerce Commission in 2020 (ANZ) and 2021 (ASB). Significantly, the Commerce Commission’s action wasn’t prompted by customer concerns or complaints, but by the banks self-reporting their systems’ errors. In the High Court, ASB argued that the class action was an attempt by the plaintiffs (or their litigation funders) to leverage ASB’s responsible decision to self-report. This did not persuade the judge to stop the class action from proceeding.41 Although New Zealand does not – yet – have an established practice of follow-on class actions, they are common overseas.

In Australia, the financial services sector experienced a deluge of class actions following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Several cases have since settled for considerable sums: both Colonial First State and AMP have paid settlements of approximately AUD$100 million.42 We advise corporates considering a self-report or regulatory settlement to keep class action risk top of mind.

Encouraged by success overseas, litigation funders will be following New Zealand regulators with interest.

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Our team Our thanks to Bell Gully lawyers Jack Worthington, Anna Patton and Isobel Ryan for their contribution to this publication.

Our class actions practice

Sophie East

Jesse Wilson

Alix Boberg

Sam Hiebendaal

PARTNER

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PARTNER

DDI +64 9 916 8668 MOB +64 21 899 619

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sophie.east@bellgully.com

jesse.wilson@bellgully.com

alix.boberg@bellgully.com

sam.hiebendaal@bellgully.com

Organisations that face class action proceedings in New Zealand need to navigate a landscape shaped by the courts, around claims that involved case-specific issues and significant procedural complexity.

In the absence of a formal class actions regime, our hands-on experience across a number of major class action proceedings offers both efficiency and advantage in understanding the right course of action.

As pioneers in this field in New Zealand, we have represented clients in some of the most significant class actions to come before the courts, offering the same strategic

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and commercial approach that has seen Bell Gully’s commercial litigation practice acknowledged internationally as the market leader.

We advise clients on the funding arrangements that arise in class actions, the implications of the make-up of a class, and of the court’s recent endorsement of ‘opt-out’ class actions, which will allow a claim to be brought on behalf of large groups that may include class members unaware they are part of the claim. We keep a close watch on trends and developments, to advise you on the emerging risks in your sector.

The Big Picture: Class Actions

INDEPENDENT RECOGNITION • Band 1 Dispute Resolution Chambers Asia Pacific 2025 • Tier 1 Dispute Resolution The Legal 500 Asia Pacific 2025 • Tier 1 Litigation Benchmark Litigation 2025 • NZ Law Firm of the Year 2020, 2021, 2024 Benchmark Litigation

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Endnotes 1. This is a sampling of class action cases, it does not purport to cover all class action cases filed in New Zealand. Bell Gully has, or has had, roles in a number of the cases outlined here including Houghton v Saunders, Cooper v ANZ Bank New Zealand Ltd, Fullarton v Arowana International Ltd, Body Corporate Number DPS 91535 v 3A Composites GMBH, Simons v ANZ & ASB, Johnson & Johnson and Hino trucks.

2. Houghton v Saunders (2008) 19 PRNZ 173 (HC).

3. Southern Response Earthquake Services Ltd v Ross [2020] NZSC 126, [2021] 1 NZLR 117 upholding the Court of Appeal’s decision: Ross v Southern Response Earthquake Services Ltd [2019] NZCA 431.

4. Simons v ANZ Bank New Zealand Ltd [2024] NZCA 330, [2024] 3 NZLR 485.

5. Body Corporate Number DPS 91535 v 3A Composites GmbH [2023] NZCA 648; Simons v ANZ Bank New Zealand Ltd [2024] NZCA 330, [2024] 3 NZLR 485.

6. T & S Construction 2015 Ltd v Toyota New Zealand Ltd [2024] NZHC 2483.

7. T & S Construction 2015 Ltd v Toyota New Zealand Ltd [2024] NZHC 2483, at [165].

8. Unless consent of all representative class members has been obtained (which is unlikely in a mass opt-out class action).

9. Southern Response Earthquake Services Ltd v Ross, above n 3, at [95].

10. Southern Response Earthquake Services Ltd v Ross, above n 3, at [97]–[99].

11. On 1 and 2 April 2025 the United Kingdom Supreme Court heard an appeal from the Court of Appeal’s decision in Evans v Barclays Bank PLC [2023] EWCA Civ 876, [2024] Bus LR 366. One of the issues on appeal was whether the Court was wrong to overturn the Competition Appeal Tribunal on the basis that it incorrectly relied on its provisional assessment of the

merits in determining whether proceedings should be certified as opt in or opt out. Judgment is awaited.

Actions and Litigation Funding (NZLC IP 45, 2020), at [14.20].

12. Credit Suisse Private Equity LLC v Houghton [2014] NZSC 37, [2014] 1 NZLR 541 at [131]; and Southern Response Earthquake Services Ltd v Ross, above n 3, at [57].

22. Te Aka Matua o te Ture | Law Commission Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa | Class Actions and Litigation Funding (NZLC R147, 2022) at [14.66]–[14.74].

13. Southern Response Earthquake Services Ltd v Ross, above n 3, at [83].

23. See Southern Response Earthquake Services Ltd v Southern Response Unresolved Claims Group [2017] NZCA 489, [2018] 2 NZLR 312 at [78]–[82].

14. Ross v Southern Response Earthquake Services Ltd [2021] NZHC 3497 at [67].

15. For example, in Australia parties can seek class closure orders that effectively convert an opt-out class action into an opt-in class action in order to facilitate mediation or settlement. If a class member does not identify themselves at this stage, they may not be eligible for settlement funds.

16. Simons v ANZ Bank New Zealand Ltd [2024] NZCA 330, [2024] 3 NZLR 485. The Supreme Court refused leave to appeal.

17. Saunders v Houghton [2009] NZCA 610, [2010] 3 NZLR 331 at [36].

18. The ‘Feltex’ litigation, see above n 1.

19. Including: ‘Feltex’ litigation, see above n 1; Strathboss Kiwifruit Ltd v Attorney-General [2019] NZHC 62; Ross v Southern Response Earthquake Services Ltd [2020] NZSC 126, [2021] 1 NZLR 117; and Simons v ANZ Bank New Zealand Ltd [2024] NZCA 330, [2024] 3 NZLR 485 at [133].

20. The Law Commission identified five domestic based litigation funders and six overseas based litigation funders. See Te Aka Matua o te Ture | Law Commission Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa Class Actions and Litigation Funding (NZLC IP 45, 2020) at [14.34].

21. Te Aka Matua o te Ture | Law Commission Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa Class

Bell Gully

24. Southern Response Earthquake Services Ltd v Ross, above n 3.

25. Simons v ANZ Bank New Zealand Ltd, above n 3.

26. Houghton v Saunders [2020] NZHC 1088 at [92].

Strike out upheld by the Court of Appeal: Houghton v Saunders [2020] NZCA 638. The Supreme Court refused leave to appeal.

27. Law Commission Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa | Class Actions and Litigation Funding (NZLC R147, 2022) at [2].

28. Government Response to Report of Te Aka Matua o te Ture | Law Commission on Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa | Class Actions and Litigation Funding (Presented to the House of Representatives, R147, 30 November 2022).

29. Australian Law Reform Commission Grouped Proceedings in the Federal Court (ALRC R46, 1988) at 1.

30. Federal Court of Australia Act 1976 (Cth), pt IVA. 31. Credit Suisse Private Equity LLC v Houghton [2014] NZSC 37, [2014] 1 NZLR 541 at [49] quoting Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41, (2006) 229 CLR 386 at [3].

32. See, e.g., Body Corporate Number DPS 91535 v 3A Composites GmbH [2023] NZCA 648 where the Court of Appeal held (at [90]) that representative orders

The Big Picture Class Actions

would be likely to result in “inefficiency, poor use of the court’s resources, and unjustified and disproportionate burdens on the respondents”.

33. Law Commission report, at [6.10].

34. High Court Rules, r 1.2.

35. Southern Response Earthquake Services Ltd v Ross [2020] NZSC 126, [2021] 1 NZLR 117 at [95].

36. Waterhouse v Contractors Bonding Ltd [2013] NZSC 89, [2014] 1 NZLR 91 at [28].

37. Simons v ANZ Bank New Zealand Ltd [2024] NZCA 330, [2024] 3 NZLR 485.

38. A finding of breach under consumer and financial markets laws may be relied upon in subsequent civil proceedings: see Fair Trading Act 1986, s 47; and Financial Markets Conduct Act 2013, s 487.

39. Information may be obtained pursuant to a request under the Official Information Act 1982, or on request to the regulator. In Financial Markets Authority v ANZ Bank of New Zealand Ltd [2018] NZCA 590, the Court of Appeal held that the Financial Markets Authority can disclose documents obtained through the exercise of its statutory powers to investors to allow those investors to assess whether to bring a claim against a bank. The Supreme Court declined leave to appeal.

40. That said, the Law Commission acknowledged that some class actions (Houghton v Saunders, Scott v ANZ Bank) had followed earlier investigations, and the class actions filed in relation to the collapse of CBL Corporation had been filed before, not as a follow on to, three regulatory proceedings.

41. Simons v ANZ Bank New Zealand Ltd [2022] NZHC 1836, [2022] NZCCLR 30.

42. Komlotex Pty Ltd v AMP Ltd (No 4) [2023] NSWSC 1378; and Krieger v Colonial First State Investments Ltd [2024] FCA 1402.

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