Published: Wed, Jun 29th, 2011 by Michael Robinson
In an exciting development Turner Hopkins has teamed up with Australian litigation heavyweight Slater & Gordon to investigate the viability of legal action arising from finance company collapses.
The potential claims will target the corporate trustees of finance companies who are alleged to have failed in their duty to adequately monitor the activity of the finance companies and in their general obligation to protect the interest of the investors (as their beneficiaries).
As most people will be aware heavy losses were suffered by investors in the likes of Bridgecorp, Hanover Finance, OPI Pacific, Capital and Merchant, Strategic Finance, St Laurence and many other companies.
Our website (www.turnerhopkins.co.nz) outlines the case for victims of failed finance companies in New Zealand and invites investors to register their interest. Slater & Gordon is Australia’s largest law firm and specialises in financial claims and multi-plaintiff actions of this nature. Turner Hopkins has been working with Slater & Gordon in developing this project for the past year and a half.
Whilst Slater & Gordon has had significant experience in dealing with cases of this nature along with other class action claims (for example tobacco, asbestos, tainted blood and pharmaceutical claims) this type of action is unprecedented in New Zealand. To a large extent that is because New Zealand has no express provision for class action lawsuits. A draft class action bill and proposed changes to the High Court Rules have been prepared but are yet to be implemented. Nevertheless even in the absence of the rules being changed, a multiple plaintiff action of this nature will be able to proceed.
This claim comes on the heels of a settlement agreement reached in Australia in late March 2011 when Slater & Gordon acted for a number of investors in a failed finance company which obtained a successful settlement against the trustees of the Australian finance company Fincorp. Whilst Australian and New Zealand law differ in some respects, this case involved very similar circumstances as to what occurred in New Zealand. In our view it raises the real prospect of New Zealand victims being able to receive compensation from finance companies. The total losses incurred by over 20,000 investors in finance companies in New Zealand amounted to over two billion dollars. In the event that this action is successful it will result in investors being able to recoup some of those losses.
A unique factor in this project is that joining the proceeding is not likely to cost the investors anything. It is expected that the claims will be brought with the assistance of litigation funding in which a third party funder will meet the up front legal costs and provide the plaintiffs with protection against any adverse outcome. In return the funder would expect to receive an agreed portion of any successful result.
Another positive factor is that it is anticipated that the trustee companies involved are large and solvent and are likely to have significant insurance cover.
People who have lost money through finance company failures are encouraged to register their interest on our website or email any enquiries to firstname.lastname@example.org.