Litigation Funder Hits Paydirt Again . . How Will It Affect the Law Commission Review?

Litigation Funder Hits Paydirt Again . . How Will It Affect the Law Commission Review?John Bowie – The Mainzeal case was a win for litigation funder LPF Group, which hit the trifecta after succeeding in the PSA kiwifruit case and the earlier settlement in the PwC claim involving Dave Henderson’s property group. But it will also place litigation funding into sharp relief with the Law Commission’s imminent review of litigation funding.

The Law Commission is set to announce its review terms shortly.

The LPF-funded Mainzeal claim, which saw a $36 million judgment against directors awarded by Justice Francis Cooke, achieving the third major success for the litigation funding firm in the past couple of years.

After facing stringent criticism from everyone from the Chief Justice down, mainly emanating from the crocodile-teary-eyed insurance industry, the LPF success has shown that LawFuel Power List member Phil Newland’s operation has forever altered the country’s litigation landscape.

Along with fellow Power List member Jonathan Woodhams, the funder, chaired by former Supreme Court Judge Bill Wilson QC, has established its street cred on the litigation front with three compelling victories.

But more significantly it has also established the need for financially-challenged litigants to achieve their day in court for cases with merit.

The $450 million kiwifruit lawsuit against the government, the largest civil lawsuit every in New Zealand, resulted in a finding of negligence against MAF. Although the money award was not made, the Judge found that compensation was due to the kiwifruit growers.

LPF Group were entitled to up to 30 per cent of the $36 million Mainzeal judgment, but it was an action that BDO’s liquidators could not have afforded without them.

The 2017 $300 million claim against PwC as auditors of Christchurch developer Dave Henderson’s failed Property Ventures Group was settled on confidential terms, with LPF entitled to a fee of up to 25 per cent, according to reports.

The PwC case lead to dissenting opinion addressing litigation funding from Chief Justice Dame Sian Elias, which lead to a controversial complaint to the Judicial Conduct Commissioner by Phil Newland.

The Chief Justice’s decision said that the “extent of control over the litigation permitted to SPF under the funding agreement and the extent to which it remains in control of the funding” made her believe the funding arrangement could be unlawful.”

It is representative of the issues long-faced by litigation funders, frequently accused of champerty, stirring the litigation pot for profit.  

LPF’s Phil Newland has previously called for a public enquiry into how insurance companies operate with their litigation operations in New Zealand.

“The majority of the people who are seeking to get compensation and accountability through insurance companies have suffered significant losses, and can’t afford litigation let alone lengthy court battles without help from funders such as LPF,” he told LawFuel.

“The insurance companies, and the directors and organisations insured through them, know this, and take full advantage.

New Zealand still has laws relating to maintenance and champerty, although they have disappeared in other jurisdictions. Hence the announced ‘reactivation’ of the Law Commission review of litigation funding.

Law Commission president Sir Douglas White has identified the need for greater clarity around litigation funding and class actions in New Zealand, which he said can involve complex procedural issues.

Doubtless that is true. But the major successes in major litigation like those supported by LPF Group to date demonstrate that some litigation demands funders to achieve the justice that has hitherto been denied to claimants.

Litigation Funder Hits Paydirt Again . . How Will It Affect the Law Commission Review?>> LawFuel interview with Phil Newland



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