Law commission

Class action laws are necessary for access to justice, says Law Commission

Class actions would need to be cleared by the High Court before moving forward, and they should not be permitted in all courts, the Law Commission said.

Abigail Dougherty / Stuff

Class actions would need to be cleared by the High Court before moving forward, and they should not be permitted in all courts, the Law Commission said.

A class action law would improve access to civil justice, the Te Aka Matua o te Ture Law Commission said.

About 40 countries have class action regimes, including Australia and Canada. New Zealand does not, although this has not prevented class actions from being pursued in court.

Cases brought on behalf of a large number of people in New Zealand include landlords taking legal action against James Hardie over a leaky building and kiwifruit growers suing the government for introducing the vine disease kiwifruit.

The live class actions include the case against ANZ and ASB brought by people with mortgages and personal loans who claim they were wrongly charged millions in interest and fees.

READ MORE:
* ANZ and ASB face multimillion-dollar class action lawsuit over failed loans
* Shocking end to James Hardie class action calls for checks on disputed lenders
* Law Commission’s class action review is a ‘step forward for people seeking justice’

Amokura Kawharu, chairman of the Te Aka Matua o te Ture Law Commission, says a class action law would improve access to justice.

Provided

Amokura Kawharu, chairman of the Te Aka Matua o te Ture Law Commission, says a class action law would improve access to justice.

In its report Ko ngā Hunga Take Whaipānga me ngā Pūtea Tautiringa Class Actions and Litigation Funding, the commission called on Parliament to draft class action law, although it refrained from recommending that tikanga Māori be included as guiding principle in class action law.

Instead, Maori tikanga, the customary rules for regulating human behavior, should be considered an integral part of the law-making process, the commission said.

Law Commission Chairman Amokura Kawharu said: “There are significant barriers to accessing civil justice in Aotearoa, New Zealand, including the costs associated with litigation.

“Class actions and litigation funding are not a magic bullet for these issues, but we believe they can both make important contributions.”

TVNZ

A $220 million class claims siding was sold without proper testing, but ended after just a few weeks with a settlement that was a victory for respondent James Hardie.

Class action law reform should cover litigation funding agreements, which were loans taken out by lawyers who ran class actions, but which gave funders substantial power over how a case was handled and their awarded a significant portion of the damages awarded.

Only “fair and reasonable” funding deals should be allowed, the commission said.

Courts should also oversee settlements to ensure litigants’ interests are protected in cases where the funder wants to settle a case, the commission said.

Class actions would have to be cleared by the High Court before they could go ahead, and class actions would not have to be allowed in all courts, the Law Commission said.

“We do not recommend that class actions be available in the District Court, Environmental Court or Maori Land Court. However, we recommend that the government consider developing class action rules for employment jurisdiction,” he said.

Opt-in and opt-out class actions should be permitted.

An opt-in class action requires individuals to actively opt-in to the class action, while in an opt-out class action individuals can be included by attorneys in a claim, unless they opt out.

Anthony Simons is one of the lead plaintiffs in a class action lawsuit against ASB and ANZ Bank.

LAWRENCE SMITH / Stuff

Anthony Simons is one of the lead plaintiffs in a class action lawsuit against ASB and ANZ Bank.

A public class action fund should be created that could provide funding to plaintiffs, the commission recommended.

The commission said class actions were unlikely to be used in proceedings involving a single claim filed on behalf of a class rather than numerous individual claims.

“For this reason, we believe that class actions are unlikely to be commonly used for Maori class disputes, which often involve a single claim on behalf of an iwi,” the commission said.

But the tikanga Māori concept of ea, which indicates a state of balance and the restoration of relationships, could be very relevant for a class action regime, the commission said.

He was referring to Tā Hirini Moko Mead’s take-utu-ea framework for repairing violations of tikanga, or responding to evil and achieving a state of equilibrium.

However, the commission said to incorporate Māori tikanga as a general guiding principle

could create risks and uncertainty; creating inconsistencies with other laws in which the Māori tikanga was not incorporated; and risking the Māori tikanga being raised inappropriately by litigants in order to gain procedural points.