Finance company trustees facing further class action

Another local law firm is gearing up to sue the trustees of failed finance companies in class action proceedings on behalf of thousands of investors left out of pocket.

As NBR reported recently, Christchurch lawyer Grant Cameron is already working on a class action case against Perpetual Trust over the collapse of Capital + Merchant Finance.

Now Auckland based boutique law firm, Turner Hopkins, says it is working with Australian law firm, Slater & Gordon, to investigate launching class action proceedings of its own.

Turner Hopkins partner Andrew Hooker says his firm in investigating potential claims against the trustees and other entities liable for losses suffered by investors following the collapse of finance companies.

He said Turner Hopkins has been working alongside Slater & Gordon for the past 12 months analysing these potential claims.

“The claims are expected to allege a breach of trust on the part of the corporate trustees appointed to monitor and supervise the activities of the failed finance companies and protect investors.

“If successful, investors may well be entitled to recover economic losses incurred by them as a result of these failings,” Mr Hooker said.

Any legal case would be funded and so people joining would not be required to pay any legal fees unless successful.

These types of arrangements are common in Australia but unusual at present in New Zealand, although they are tipped to become more common.

They allow cash strapped investors to sue when they would otherwise not have the financial resources.

Turner Hopkins has invited any interested investors to contact them to register their interest.

Slater & Gordon recently announced it had reached a settlement agreement with the trustees of the failed finance company, Fincorp.

At least seven New Zealanders are expected to benefit from the settlement, which could have wide ranging implications in New Zealand.

While Australian and New Zealand law differ in some respects, the Fincorp case involves very similar circumstances to what occurred in New Zealand.

Turner Hopkins says this raises the prospect New Zealand investors may be able to receive compensation from trustee companies following the collapses of local finance companies over the past few years.