by Niko Kloeten
Phil Newland, director of LPF Group, told Good Returns his company had seen a definite pick-up in interest in the last few months, although he said it was too early to tell whether that would translate into increased business.
"We've been deluged by individual investors from a wide range of finance companies calling us and writing to us asking who they can talk to. They're frustrated at not knowing where they can turn to take action.
"Our response is relatively consistent - we are very interested in talking to the receivers and trustees of these companies so please contact them. You should be calling on trustees and receivers to take action on your behalf."
LPF operates on a "no-win, no-fee" basis, funding litigation costs such as lawyers' fees in return for a percentage of the outcome of each case. It generally only considers claims worth at least $1 million.
Newland said, "The challenge is not whether there's a wide range of low-hanging fruit legal action that could be taken since the finance companies went down a number of years ago, the challenge is who is motivated to take that action.
"In New Zealand it's difficult for people to organise themselves into class actions - they're very reliant on trustees or receivers to take action on their behalf."
He said trustees and receivers hadn't been "bashing down the door to bring litigation", but he said there could be a number of reasons for this; for example, they could be able to bring litigation "off their own bat" without the need to use a litigation funder.
"Our observation is litigation tends to be the last thing focused on rather than the first, so they may just be getting to that stage now."
He warned that it wouldn't be in the interests of finance company victims for too much time to be taken over litigation, for a number of reasons including statute of limitation periods which put litigation under pressure.
"There are always risks when things are done under pressure but the greater risk is not getting them done at all."
Niko Kloeten can be contacted at niko@goodreturns.co.nz
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