Product Liability 2009 - Arnold & Porter LLP

Simpson Grierson New Zealand
6.5 Is there a maximum limit on the damages recoverable
from one manufacturer e.g. for a series of claims arising
from one incident or accident?
There is no maximum limit prescribed in New Zealand law, but as
noted above the amounts awarded in New Zealand as exemplary or
punitive damages are modest by international standards.
6.6 Do special rules apply to the settlement of
claims/proceedings e.g. is court approval required for the
settlement of group/class actions, or claims by infants, or
otherwise?
The underlying general principle is that a plaintiff cannot be
compelled to continue with a court proceeding against the plaintiff’s
will. There are, however, a number of exceptions, e.g. where
discontinuance would be an abuse of the process of the Court. The
Court may set aside a step in a proceeding if an incapacitated person
did not have a litigation guardian when that step was taken and the
Court considers that the incapacitated person was unfairly prejudiced.
In relation to settlement of money or damages claims by or on
behalf of minors, the Minors Contracts Act 1969 contains provision
for Court approval to make settlements valid and binding. The Act
also enables the Court to impose conditions eg for all or part of the
amount paid to be held on trust for a period.
6.7 Can Government authorities concerned with health and
social security matters claim from any damages awarded
or settlements paid to the Claimant without admission of
liability reimbursement of treatment costs, unemployment
benefits or other costs paid by the authorities to the
Claimant in respect of the injury allegedly caused by the
product. If so, who has responsibility for the repayment of
such sums?
In some instances Government authorities can claim reimbursement
from damages awards and settlement payments paid to a Claimant.
The best example is the ability of the Accident Compensation
Corporation in such circumstances to make deductions from
amounts of accident compensation it would ordinarily pay, and to
recover from the Claimant amounts of accident compensation that
have previously been provided.
7 Costs / Funding
7.1 Can the successful party recover: (a) court fees or other
incidental expenses; (b) their own legal costs of bringing
the proceedings, from the losing party?
In civil litigation an unsuccessful party is ordinarily required to pay
a contribution to the legal costs and related expenses of the
successful party. A scale for calculation of contributions to legal
costs is set out in the High Court Rules. Although the courts still
have a discretion in relation to costs, the courts tend to rely heavily
on the provisions of the scale.
Court fees will ordinarily be recoverable by the successful party
from the unsuccessful party.
In criminal cases a successful defendant will normally recover little
if any of its legal costs.
7.2 Is public funding e.g. legal aid, available?
New Zealand parties to litigation can obtain legal aid if they are
ICLG TO: PRODUCT LIABILITY 2009
© Published and reproduced with kind permission by Global Legal Group Ltd, London
private individuals, have sufficiently limited resources, and have a
sufficiently strong claim or defence. Different schemes apply for
civil and criminal proceedings. Changes to the legal aid system are
proposed.
7.3 If so, are there any restrictions on the availability of public
funding?
A variety of restrictions limit the availability of legal aid. The
principal restrictions relate to the nature and financial resources of
the legal aid claimant and the strength of the legal aid claimant’s
claim or defence.
7.4 Is funding allowed through conditional or contingency fees
and, if so, on what conditions?
Lawyers in New Zealand may now enter into a conditional fee
agreement with a client in the circumstances and manner set out in
sections 333 to 335 of the Lawyers and Conveyancers Act 2006.
These new provisions came into force on 1 August 2008.
Where a lawyer enters into a conditional fee agreement with a
client, the lawyer must ensure that the client has been informed of
any other appropriate arrangements that may be available,
including, where relevant, the possibility of legal aid. The total fee
charged at the conclusion of the matter must be fair and reasonable
in accordance with Rule 9 of the Lawyers and Conveyancers Act
(Lawyers: Conduct and Client Care) Rules 2008. A conditional fee
arrangement must be in writing and must comply with the
requirements of Rule 9, including, but not limited to, specifying the
method by which the fee is to be determined, the condition(s) that
will amount to success and upon the occurrence of which the fees
or any part will become payable, the method by which the fee is to
be determined in the event that an offer of settlement or
compromise is made which the client declines to accept against the
advice of the lawyer, and that the client may give notice cancelling
the conditional fee agreement within 5 working days after it has
been entered into on the basis that the lawyer may charge a normal
fee for any work done during that period.
7.5 Is third party funding of claims permitted and, if so, on
what basis may funding be provided?
Third party funding of claims is now possible in New Zealand.
Although the tort of champerty has not been abolished altogether in
New Zealand, judicial attitudes have changed dramatically and the
Courts are more readily accepting that litigation funding is a reality
of commercial life. Following the Fostif decision of the High Court
of Australia, litigation funding is no longer seen as objectionable as
a matter of public policy, as the Courts consider they have ample
jurisdiction to prevent an abuse of Court processes and to address
exploitation of vulnerable litigants. Key reasons for the change
have been concerns surrounding access to justice and
acknowledgement that the costs of litigation are beyond the means
of many people - see Auckland City Council as Assignee v Auckland
City Council [2008] 1 NZLR 838, and Houghton v Saunders (2008,
but subject to appeal).
A funding arrangement will not be held to be an abuse of process or
objectionable as a matter of public policy simply because a
litigation funder has sought out a piece of litigation in which to
invest for profit.
WWW.ICLG.CO.UK 245
New Zealand