Head of the class action

The Supreme Court has decided a class action against insurance company Southern Response can proceed on an opt-out basis. See their media release for more information

This means policy holders of the government-owned insurer who are affected by the issues raised by claimants Brendan and Colleen Ross will be covered by the case, unless they choose not to be.

It reinforces a previous decision by the Court of Appeal that policyholders would not have to opt-in in order to be party to the case.

Southern Response was set up to manage claims by former AMI policyholders for Canterbury earthquake damage.

It is noted that the Law Commission is currently reviewing the rules relating to class actions and litigation funding and a consultation document is due this year.

MinterEllisonRuddWatts has explored the legal implications of opt-out class actions for organisations. See their article

Also see our report Under pressure - D&O insurance in a hard market which includes a section on the future of class actions in New Zealand on page 5.