Vol 15 (2018) - Issue 4

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How Far Can Litigation Funders Go? The New Zealand Case of PwC v Walker

Introduction

New Zealand has been a late bloomer in developing laws on litigation funding and representative actions. Without waiting for the law to catch up, the use of litigation funding arrangements has increased in recent years. The New Zealand Supreme Court decision in PwC v Walker exposes the potential limits of litigation funding arrangements – and uncertainties over their legality.
After a hearing in New Zealand’s highest court on whether certain litigation funding arrangements were an abuse of process, but before judgment, the parties settled their dispute. Nevertheless, the majority (Glazebrook, Arnold, O’Regan and Ellen France JJ) believed that the case involved matters of importance and so decided to hand down the decision they would have made and the reasoning they would have given, had the case not settled. Although the Chief Justice believed issuing a judgment was unwarranted, Elias CJ put her dissent on record in response to the majority.
The liquidators of Property Ventures Limited ('PVL'), a failed property development firm, brought a claim against the auditors of PVL alleging that they had been negligent and in breach of contract when auditing PVL. It was alleged that but for the auditor’s negligence, PVL’s operations would have been wound up sooner, avoiding PVL’s ongoing losses and deepening insolvency.