NEW ZEALAND Law and Practice Contributed by: Kirsten Massey and Chris Curran, Russell McVeagh
not to be. Conversely, if membership is determined on an opt-in basis, then individuals who are within the definition of the class will not be considered mem- bers for the purpose of the action unless they actively choose to opt in. Until Court of Appeal and Supreme Court decisions in Ross v Southern Response Earthquake Services Limited ([2017] NZCA 489; [2020] NZSC 126), class actions in New Zealand had typically proceeded on an opt-in basis. However, these decisions have con- firmed that opt-out proceedings are available under Rule 4.24 and should be made in appropriate cases. The Supreme Court held that the starting point is for the court to adopt the procedure sought by the appli- cant (opt-in or opt-out), unless there is a good reason to do otherwise. However, the court must consider the relevant considerations in light of what will best meet the objectives of the representative action in the particular case. Relevant considerations include: • impact on class members – if there is a real pros- pect that some class members may end up worse off, this may favour an opt-in approach; and • class size – an opt-in approach may be more appropriate where the class is small, although this is not determinative. The Supreme Court also recognised that proceedings that begin as opt-out (eg, allowing common issues to be determined at “stage one”) may need to become opt-in at “stage two” to avoid prejudice or unfairness (eg, to resolve the remaining individual issues arising on individual class members’ claims). An “opt-out order” will be given on conditions that include: • requirements for notice to be given to class mem- bers with an explanation of the right to opt out; and • a requirement for court approval of a settlement or discontinuance. Notification of potential class members is supervised by the court as a matter of case management on a case-by-case basis. Generally, advertising will be per- mitted if necessary. The court’s supervision of com-
munications with potential class members will vary in accordance with the circumstances of the case, but will be engaged where communications to the poten- tial class are misleading or potentially confusing. 3.5 Joinder Further plaintiffs can be added to a representative action, provided that their joinder complies with any representative order made by the court and the timing and terms as set by the court therein. As an aspect of case management, the court can set a date by which plaintiffs are required to opt in to, or out of, the proceeding. This date can be set at the same time as the representative order is made or at a later stage in the proceeding. 3.6 Case Management Powers of Courts Given the absence of rules governing class actions in Aotearoa New Zealand, representative proceedings are managed in the same manner as ordinary cases, under the existing procedural rules and the court’s inherent jurisdiction. Most complex proceedings in the High Court will have an assigned High Court judge for case management and, where possible, that same judge will continue to manage the proceedings through to determina- tion. Representative proceedings are typically subject to close ongoing case management, and the Court retains the ability to vary or rescind the representa- tive order where continuation of the proceeding in that form is no longer appropriate. Notwithstanding the absence of a formal class action regime, a reasonably well-developed set of principles for the management and conduct of representative proceedings has emerged in recent case law, with courts affirming a flexible and pragmatic approach and the potential for continued development in appro- priate cases. Given the nature and number of issues that often arise in class actions, the trial of the proceeding is often dealt with in stages, known as bifurcated or split trials. In particular, a split trial may be appropriate where the proceeding gives rise to both issues common to all
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