Supporting Access To Justice Imperative In Proposed Regulation

LPF Group, New Zealand’s largest litigation funder welcomes the consultation paper released today by Te Aka Matua o te Ture | the Law Commission which will assist in the development of a proposed regulatory framework for litigation funding and class actions.

Phil Newland, director of LPF Group said the consultation document is a positive step towards ensuring ordinary New Zealanders who have suffered significant financial loss as a result of wrongdoing can have their day in court, but cautions against regulation that throws the baby out with the bathwater.

“Access to justice is a fundamental right in our society and we have a unique opportunity to create a regulatory environment that provides certainty and makes accessing the court system easier, more efficient and treats both plaintiffs and defendants equally.

“Ordinary kiwis are often left feeling helpless when they have lost money as a result of wrongdoing - typically caused by well-resourced parties. A key barrier for people in accessing justice to seek compensation for financial losses suffered is the time and cost involved. Litigation funding helps overcome these challenges, yet the current system makes it extremely difficult for people who use litigation funding, instead favouring the defendants whose actions have caused the loss,” said Mr Newland.

“In the cases we fund, the defendants are typically funded through their insurance companies, yet they are not required to disclose this information or face the same level of uncertainty and legal challenges that the plaintiffs do. There is no logic why the rules for people using litigation funding shouldn’t also be applied to defendants who have insurance companies funding their defence.

“In addition to increased certainty and transparency, we are supportive of regulation around funders’ capital requirements and the need to have a local presence to demonstrate commitment to the New Zealand public. Regulation of this sort will address any valid concerns that litigation funding could be used by unscrupulous parties to frustrate access to justice or speculation through the bringing of unmeritorious claims by parties with nothing to lose.”

“Any regulation needs to be fit for purpose and we look forward to working with Te Aka Matua o te Ture | the Law Commission to implement a system that supports the fundamental right to access justice,” said Mr Newland.

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