Rise of the class action

Last week the media reported that an additional class action against James Hardie (regarding its Harditex cladding system) was gathering momentum. If pursued this will add to the existing  $100 million class action claim that was raised against James Hardie earlier in the year (also in relation to this cladding system). If these claims proceed to Court they will join the Feltex shareholder class action, ‘bank fees’ litigation, and PSA Kiwifruit proceedings amongst others, which collectively represent a recent and sudden increase in the bringing of representative actions in New Zealand.

Relevance

This is of note as to date (unlike overseas jurisdictions where class actions are more common-place) New Zealand’s procedural rules remain largely silent on how class action claims should be dealt with by the courts. As such, there is a lack of clear rules to guide how such litigation should proceed. The absence of guidance gives rise to uncertainty, which in turn may lead to significantly higher litigation costs, as parties to a class action dispute will likely test the boundaries of what the High Court Rules will allow.

Watch this space

If these claims go ahead the James Hardie class actions are likely to contribute to the mounting pressure to revive the Class Actions Bill, a final draft of a Bill which was sent to the Secretary for Justice in 2009 but has stayed dormant since. Given the recent move to employ class actions in the construction setting, if revived and implemented this Bill will likely have implications for all forms of litigation including construction. In particular, as the current lack of a clear procedural path is likely to have deterred the use of class actions in the past, implementation of specific rules may elevate it as a viable course of action in the eyes of potential plaintiffs, especially those that would otherwise lack the resources to pursue litigation on their own.

2 thoughts on “Rise of the class action

  1. Pingback: James Hardie Court of Appeal ruling | SITE VISIT

  2. Pingback: Court of Appeal reserves James Hardie decision | SITE VISIT

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