The Law Commission is about to start a review of class action claims and it has the backing of lawyers who think the current law is inefficient, but is worrying businesses which fear legal action will become a sport.
Bell Gully partner Jenny Stevens has raised concerns that a review of class actions could make it too easy for groups to take claims against businesses. Photo: RNZ / Rebekah Parsons-King
No cases have succeeded in this country, although a small number are in the courts, including a claim by a group of 212 kiwifruit growers against the Ministry for Primary Industries over the PSA disease.
Some top lawyers believe there would have been more cases and payouts if the law surrounding class action was clearer.
Head of litigation at law firm MinterEllisonRuddWatts, Sean Gollin, said the law currently favoured corporations, not consumers.
"There's a real issue there from an access to justice perspective," Mr Gollin said.
"We see overseas, the utility of class action ... for the many people, consumers in particular, who otherwise wouldn't have the opportunity to bring their issues to court, just because of the economic cost of doing so."
The Law Society is backing the review and barrister Jason McHerron said the law around class action cases needed to be clearer.
"The law in New Zealand about class actions is based on a very general rule in the High Court rules that dates back to 1873. It's not really designed for modern class actions," Mr McHerron said.
"The courts have been dealing with each case one by one."
The Australian Law Reform Commission just reviewed its own system surrounding class action. It found they had become more prevalent and were mostly taken by disgruntled company shareholders.
The Australian commission recommended a number of amendments to the law, including extra regulation of those who fund class actions to make money down the line, known as litigation funders.
Bell Gully partner Jenny Stevens said New Zealand's Law Commission should consider that too.
She said the review of class action posed a new legal risk for companies, which were concerned a revised law would be too claimant-friendly and encourage litigation funders.
"Do we want a more permissive class action system in New Zealand? Are we concerned about the role of funders within that?" Ms Stevens said.
"These are big issues and I think they can expect business to take a keen interest."
Businesses were concerned that litigation funders would start trying it on with our legal system, in the hope of a multi-million dollar pay day, she said.
Ms Stevens' law firm has acted on behalf of several entities fighting class actions, including carpet manufacturer Feltex and the state-owned Canterbury earthquake claim settling firm, Southern Response.
The law did not block anyone from taking a company to court, she said.
