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Law firm puts out feelers for class action against cladding manufacturers

10 Mar 2015

Law firm Adina Thorn Lawyers is asking leaky building owners to join a proposed class suit against plaster cladding manufacturers, which it says could seek damages exceeding $100 million.

The law firm wants to pursue a product liability claim against the manufacturers of plaster and polystyrene cladding, including global building products maker James Hardie Industries, and is in talks with several international litigation funders who may be interested in backing the suit if it can gather momentum, principal Adina Thorn told BusinessDesk. The suit will be open to all types of property owners, including residential and commercial buildings, and multi-unit dwellings.

"We're pretty confident they owe a duty of care," Thorn said. "We've got all these experts, and we're talking to international funders, and hopefully, if we get the interest we think we're going to get and continue to get, then we'll be able to get sign-off from an international funder and bring this action."

The suit would be different from many leaky building claims in that it would target product manufacturers rather than the builders, architects and project managers. It would follow a similar case taken by the Ministry of Education against the makers of Shadowclad cladding sheets and systems used across the nation's schools.

Because the Education Ministry's suit is a negligence claim rather than one made under the Building Act, it isn't covered by the 10-year statute of limitations, which Thorn said had deterred property owners from taking action. Carter Holt Harvey, the final defendant in the ministry's claim, has asked the Court of Appeal to overturn a ruling throwing out its bid to strike out the action, including disputing the lower court's decision relating to the time limit.

Thorn said the potential suit would be a smaller percentage of the estimated 42,000 houses affected by weather-tightness issues, which is where the law firm has drawn its $100 million damages figure.

Owners of leaky properties have often been dissuaded from taking action because of the time, cost and effort of pursuing an entity through the courts, but if they participated in the planned action, it wouldn't cost them anything, she said.

"It's very, very difficult to get a funded class action in New Zealand," Thorn said. "This would be a really rare opportunity, if you own a plaster cladding building, to join something with bugger-all risk and you could get a potential recovery for nothing."

New Zealand hasn't seen many class suits with the law still undeveloped despite a 2011 select committee report into the finance company failures of the late-2000s recommending legislation to enable faster, better and cheaper actions. The government tasked officials to develop policy in 2012, though no legislation has yet emerged.

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