New Zealand

Although growth of the funding industry has been slower in New Zealand than in other jurisdictions, full or partial plaintiff funding is available for a wide variety of claim types.

The doctrines of maintenance and champerty, although not technically abolished, are now considered insufficient by themselves to substantiate abuse of process claims in New Zealand, with the Courts taking a cautiously permissive approach to third party funding and a nuanced approach in determining the validity of funding agreements.

The Courts view litigation funding as a means to level the playing field and provide access to justice, and they have set out the parameters within which the Courts would expect third party funding to function.

Key cases

Saunders v Houghton [2012] considered the level of disclosure in respect of the funding agreement and held the First Instance’s decision that the defendant’s interests were sufficiently protected by disclosure of the documents to the court only.

In Contractors Bonding Ltd v Waterhouse [2012], the Court of Appeal articulated general requirements about disclosure of funding agreements. These included giving formal notice to the court and the non-funded party that the litigation funder is involved and providing the non-funded party with certain key details of the funding agreement, including the identity and location of the funder and the funder’s financial standing.

In Waterhouse v Contractors Bonding Ltd [2013], the Supreme Court agreed that parties should disclose the use of litigation funders, the identity and location of that funder, and whether that funder is subject to the jurisdiction of the New Zealand Courts. However, it ruled that the Courts have no general role in regulating litigation funding agreements and that there was no automatic requirement for the funded party to provide security for costs. It also found that there is no requirement to disclose the financial means of the funder, or the terms upon which funding can be withdrawn.

Regulation

Currently there are no regulations for litigation funding in New Zealand, nor is there an independent body to regulate funders such as the ALF in the UK. In Houghton v Saunders, the Court of Appeal did consider the ALF’s code of conduct in making their decision.

The High Court Rules allow for representative actions (Rule 4.24). These actions may be funded by third parties although restrictions exist. In 2008, proposals were made to regulate funding in class actions but the Class Actions Bill and associated draft High Court Amendment (Class Actions) Rules never made it into law and so it continues to be regulated through the ‘representative action’ procedure.