Bell Gully’s Jenny Stevens, Partner; Sophie East, Partner, and Senior Associate Nick Moffatt discuss the Rules Committee’s call for submissions on proposed changes to the High Court Rules, which would assist in the bringing of representative actions. Submissions close 16 November.
Changes to the High Court Rules could soon be made, following announcement of a consultation by the Rules Committee which intends to further facilitate the bringing of representative actions (or “class actions”) in New Zealand.
The Rules Committee is a statutory body charged with developing, reviewing and amending the procedural rules used in New Zealand courts.
The short consultation paper, along with a consultation draft of proposed amendments to the High Court Rules, can be found here. The amendments are focused on the manner in which representative proceedings are commenced. In particular, by supplementing the existing Rule 4.24 (which governs representative actions), the amendments include:
1. A specific rule that, for limitation purposes, a representation order will apply from the date the statement of claim is filed regardless of whether the court makes an order on after that date;
2. A requirement that an affidavit by a party making an application for a representative order must include specific information, such as the existence and identity of any litigation funder and a proposal to ensure all potential class members have been identified and notified of their right to join the proceeding (“opt-in”);
3. Perhaps most significantly, a new provision that adopts principles developed in the Court of Appeal and Supreme Court relevant to determining if a representative order should be granted.
The way in which representative actions are currently commenced has largely evolved through case law, in particular the Saunders v Houghton case (the Feltex Litigation). The proposed changes intend to formalise and make that procedure more accessible.
These particular amendments are not intended to bring about significant reform to class action litigation. For example, the consultation paper specifically notes that the proposed rules do not address whether an opt-out procedure (where people are presumed to be part of the class unless they elect not to be), should be permissible under the High Court Rules. That is seen to be a matter for the legislature to address.
The amendments should, therefore, simply codify the existing case law requirements and position. Nonetheless, parties interested in the development of the law in this area – Bell Gully included – will be studying the proposed amendments and their implications carefully.
Submissions are due by 16 November 2018 and can be made by members of the legal profession or the wider public. Please feel free to contact the authors if you wish to discuss this article.
Partner Jenny Stevens works alongside clients to develop strategies to manage and resolve often very challenging and high profile cases. She is an experienced commercial litigator advising in a range of commercial disputes including large scale contractual disputes and negligence claims as well as cases involving breaches of confidence, competition law, consumer law, product recalls and insurance. Jenny advised Danone on all aspects of its dispute with Fonterra following the August 2013 whey protein concentrate botulism scare. This included representing Danone in New Zealand High Court proceedings, as co-counsel in an UNCITRAL international arbitration in Singapore, and in the related Government Inquiry into the crisis and the prosecution of Fonterra by MPI. In November 2017, Danone obtained an award in the Singapore arbitration that Fonterra pay it €105 million (NZ$183 million). Fonterra had provisioned only NZ$11 million for the dispute, reflecting what it described as its “maximum contractual liability to Danone”. This case is one of the highest profile and most complex cases in New Zealand. Contact Jenny at jenny.stevens@bellgully.com
Partner Sophie East advises clients involved in commercial litigation and arbitration, including complex contractual disputes and disputes involving issues of company and securities law. She advises clients facing regulatory investigations and proceedings, including by the Commerce Commission, the FMA, NZX and NZICA. Sophie has acted as defence counsel in several high profile class action proceedings. She also has extensive international arbitration experience including acting for international organisations, military and defence contractors, and sovereign states. She regularly speaks and writes on arbitration-related topics and is an elected council member of the Arbitrators’ and Mediators’ Institute of New Zealand. Sophie holds a Master of Laws from Harvard Law School and worked for four years as an Associate in the international arbitration team at White & Case in New York. Sophie is recommended for dispute resolution by The Legal 500 Asia Pacific 2016 and Asia Pacific Legal 500 2015. Contact Sophie at sophie.east@bellgully.com
Senior Associate Nick Moffatt is a specialist commercial litigator with expertise in insolvency and insurance. Nick has experience advising banks, liquidators, receivers and creditors on matters relating to insolvency and enforcement including the validity, priority and enforcement of security and taking recovery action in liquidations and receiverships. With a particular interest in voidable transactions and personal property securities issues, Nick navigates his clients confidently through this controversial and complex area. Nick has recently acted for KPMG as liquidators of Starplus Homes (In Liquidation) and has worked closely with banking clients on various disputes, including claims relating to cheque fraud and breach of retainer. Nick is currently assisting in an in-house counsel role three days a week at Southern Response Earthquake Services Limited in Christchurch where he has a particular focus on the management of litigated claims. Contact Nick at nick.moffatt@bellgully.com
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Disclaimer
This publication is necessarily brief and general in nature. Readers should seek professional advice before taking any action in relation to the matters dealt with herein.