Page 67

L AW TA L K 9 2 9 · J une 2 0 1 9

of its kind on class actions in New Zealand. She defines a class action as: A legal procedure which enables a number of persons with similar claims (or parts of claims) against the same defendant to be determined in one suit. In a class action, one or more persons (the ‘representative plaintiff(s)’) may sue on his, her or their own behalf and on behalf of a number of other persons (‘the class’) where the class claims a remedy for the same or a similar alleged wrong as the representative plaintiff (‘common issues’). Usually, only the representative plaintiff is a party to the action. The class members are not generally identified as individual parties to the litigation but merely described. The class members are bound by the outcome of the litigation on the common issues, whether favourable or adverse to the class, although they do not for the most part, take any active part in that litigation. Ms Chamberlain’s research found that there had been 36 class actions filed in the High Court up to 1 March 2018.

The breakdown Before the 1980s there were just three class actions, then the 1980s brought in four. By the 1990s that figure had doubled to eight and by the first decade of the 2000s, it was 13. Between 2010 and 2018 there have been eight. Just four of these 36 class actions were litigation funded, but Nikki Chamberlain expects that funding figure will grow for a number of reasons. “First, from a practical perspective, litigation funding is now allowed due to the reduced use of the torts of champerty and maintenance. Secondly, there is a need for third party litigation funders in relation to certain types of claims, such as small damages claims, where it is not economically viable for the plaintiff class to fund litigation against often well-resourced defendants. Thirdly, although litigation funding clearly facilitates access to justice for the plaintiff class, it is also big business for the funder and their shareholders because the funder obtains a fee over and above reimbursement costs for funding the litigation,” she says.

The torts explained Ms Chamberlain explains that maintenance occurs where a third party assists a party in a civil proceeding to bring or defend that proceeding without lawful justification and damage is thereby caused to the opposing party in the proceeding. Champerty is a form of maintenance where the third party who gives the assistance does so on the basis that he or she receives a share of the damages awarded. As Todd on Torts says: “the law of maintenance and champerty seeks to prevent wanton and officious interfering with the disputes of others in which the intervener has no interest and where the assistance is given without justification or excuse” (8th edition, page 1061). Ms Chamberlain says there are a number of jurisdictions which have completely abolished the torts of champerty and maintenance, including England and certain states in Australia such as Victoria, South

▴ Nikki Chamberlain, University of Auckland Faculty of Law lecturer

Australia and New South Wales. “However, the torts still exist in New Zealand, albeit in a reduced form. In Saunders v Houghton [2010] 3 NZLR 331, the Court of Appeal accepted that litigation funding of a class action can occur where there is an arguable case for rights that warrant vindication, where there is no abuse of process, and where the funding arrangement is approved by the court. In relation to this last point, Justice Glazebrook stated in Waterhouse v Contractors Bonding Ltd [2014] 1 NZLR 91 that a plaintiff should initially disclose the identity and location of a funder and its amenability to the jurisdiction of the court. Nevertheless, without relevance to a further application and orders, the terms of the funding agreement did not need to be disclosed. However, in PriceWaterhouseCoopers v Walker [2017] NZSC 151, Chief Justice Elias issued a dissenting opinion concerned that the majority’s opinion would be seen as cementing the approach in Waterhouse without full argument. Her Honour reiterated that champerty and maintenance are still part of New Zealand law and she intimated that, without statutory regulation, there is risk of oppression and the courts therefore need to closely scrutinise terms of a funding arrangement to prevent civil claims being treated as negotiable investments. Interestingly, the LPF Group (a litigation funder), filed an official complaint against the Chief Justice with the Judicial Complaints Commissioner over what it claimed 67

Profile for NZ Law Society

LawTalk 929