Class actions – EQC & Southern Response

Class actions against EQC and Southern Response have been the subject of media attention in the past 3 years.  This has intensified recently with the proposed class action against Southern Response.  Here is the link to Grant Cameron’s page.  Here is the Southern Response page about the proposed class action.  There is no specific mechanism, or rule(s), by which there can be a “class action” in NZ.  Rules proposed in 2008 have never been implemented.  Recently the Court(s) have shown a willingness to permit representative actions under r4.24 of the High Court Rules.  This has enabled the “Feltex” and “Bank fees” proceedings.  The “Feltex” proceedings failed in the High Court and the Court ordered the representative to pay costs in excess of $5M to the successful defendants.  One or more person(s) sues as a representative of a group of person(s) having the same interest either with the consent of all affected people or with the permission of the Court.  Class actions are usually accompanied a “no win no fee” arrangement and a “litigation funder” that funds the costs of the process for a % recovery of any proceeds.  Insureds considering the class action need to consider whether the % foregone is a reasonable fee for what is done taking into account the current position and  what other service providers may charge for a similar work/outcome.  I expect Southern Response to fight the class action process hard and challenge every part of it.  So it is difficult to see how long the process may take.  Insured homeowners need to be conscious of the 6 limitation period for suing in the Court.