The Government has accepted in principle the key recommendations of Te Aka Matua o te Ture | Law Commission on class action and litigation funding law reform, with policy work set to start in 2023. But don’t expect to see changes coming into effect anytime soon.

The Law Commission tabled its report in late June 2022 after a substantial review of the law relating to class actions and litigation funding, which took over two years. A summary of its key recommendations can be found here.

Government’s response

While the report contained 121 recommendations, it is not clear at this stage to what extent these will be adopted. The Government has said it accepts the following key recommendations ‘in principle’:

• a statutory regime for class actions (via a new Class Actions Act) will provide clarity and could enhance access to justice;

• abolishing the torts of maintenance and champerty would clarify the permissibility of litigation funding; and

• court oversight of litigation funding agreements in class actions should aid in ensuring the terms of agreements are fair and reasonable.

However, the Government noted that some areas would require further work, including policy and implementation considerations of the Law Commission’s more controversial recommendation in relation to the introduction of a public fund for public interest class actions.

Additional work is also needed on whether litigation funding oversight should be restricted only to class actions, and the impacts of both class actions and court oversight of litigation funding agreements on court resources and processes (when weighed against the increase in the number of active cases currently before the High Court).

Where to next?

The Government intends to undertake policy work to advance the principles of the Law Commission’s recommendations. However, this is expected to take some time with the Government stating:

Due to the technical nature of the issues and the need for legislative reform to give effect to the recommendations, advancing these reforms will take a period of time and resourcing this work will need to be balanced against other Government priorities.

Given other priorities currently facing the Government, it seems unlikely we will see any real progress ahead of the next election.

Special thanks to Rachael Machado for her assistance in writing this article.