Lawyer plans class action against steel mesh suppliers

Adina Thorn
STUadd to my Stocks

Construction and building litigation specialist Adina Thorn Lawyers plans to launch a "class action" style law suit against steel mesh suppliers who have supplied products in the past four years that do not meet earthquake standards.

Ms Thorn is expecting to take a fully funded class action on behalf of building owners and is inviting registrations of interest.

The issue emerged in March when it was revealed that hundreds of thousands of non-complying steel mesh sheets had been supplied to builders throughout New Zealand from mid-2012.

The Ministry of Business, Innovation and Employment (MBIE) said it was investigating companies that had supplied steel reinforcing mesh to builders and construction firms that did not meet the grade 500E requirement, which relates to the ductility or flexibility of the steel concerned.

Meanwhile, Steel & Tube Holdings [NZX:STU] is being investigated by the Commerce Commission for making claims that its products had been certified as complying with standard 500E by using the logo of an independent testing laboratory, which had in fact not tested or certified the product.

MBIE’s existing investigation may result in fines for the companies that have supplied the non-complying mesh, Ms Thorn says, but this is not likely to deliver any financial reinstatement for the owners of affected buildings.

“This is a problem because, in the advent of a natural disaster, the use of non-complying steel mesh could compromise insurance claims, pose a risk to life and cause widespread financial losses. Its existence could also affect the future and present market value of the buildings concerned.”

She says the proposed class action is to be funded by London-based Harbour Litigation Funding, Britain’s biggest litigation funder.

Harbour is also funding Ms Thorn’s $250 million class action against the James Hardie group of companies in respect of plaster cladding products.

She says the existence of funding means owners of affected buildings can join the class action without incurring any out-of-pocket expenses, as Harbour will cover legal, expert, research, litigation, communication and administration costs, in return for a share of any proceeds recovered in the action. 

Postscript: Steel & Tube Holdings has given the commission an undertaking that it will only sell mesh that has passed independent testing.

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And Harbour and Ms Thorn will take most of the spoils if the litigation is successful.

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Perhaps you (and / or other potential litigants) would prefer to fund the litigation and take your chances on :-
Lawyers costs;
Litigation risk;
Risk of appeal before any pay-out is forthcoming - assuming that you pass square 1 and actually win in the lower courts.
If not - I would suggest that you stop throwing stones at the people that make this type of litigation a possibility.
Sometimes - the threat of litigation is the only deterrent to well-funded but otherwise unscrupulous operators riding rough shod over the little people. If litigation funders and class action lawyers are the only way to realistically achieve that threat, they deserve to be compensated for the efforts just like anyone else.
I guess it all depends on your viewpoint (victim or perpetrator) as to how you perceive this sector. As a liquidator who often has a desire to right the wrongs committed by unscrupulous operators, but more often than not with no financial support being offered by the parties (i.e. the creditors) that have potential to benefit from such actions, I value the introduction of litigation funding into the NZ market-place.

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Totally agree. But for the litigation funder, this wouldn't fly. Put your money where you mouth is or stop complaining.

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