James Hardie faces class action

Adina Thorn says this could be New Zealand's second-biggest class action. Photo / Jason Oxenham

More than 500 New Zealand leaky-home victims, whose places have been clad in James Hardie materials, could lodge legal action in Auckland in the next few weeks.

Auckland specialist construction lawyer Adina Thorn, who is leading the Good Cladding class action against the ASX-listed manufacturer, said assessments had been made of about 500 claims which had been found to be eligible.

They were for repairs ranging from $100,000 to $17 million each, she said.

"I would expect to file a statement of claim in the Auckland High Court in about August. So far, 1200 questionnaires have gone out to people who have registered an interest in the case and we've got more than 600 responses. But not all have been found to be eligible," she said.

A representative of materials company James Hardie in Sydney, which made Harditex, Monotek and Titan board, said the company would not comment on the potential lawsuit.

Thorn said the case was proceeding as planned.

"This could be New Zealand's second-biggest class action ... "

Thorn, based in Eden Cres, said one of the biggest successes was to secure funding from one of Europe's largest litigation specialists, although she could not say how much money was involved.

Harbour Litigation Funding had agreed to back the case, Thorn said.

"With over 400 million [$891.68 million] of capital behind us, we are the UK's largest litigation funder and have invested more money, in more cases, than anyone else. We have extensive expertise in international funding as well as the UK and are currently operating in 12 international jurisdictions and four arbitral forums," Harbour says on its website.

Thorn said that gave her heart.

"People only fund things they believe in and they believe they're going to succeed against James Hardie," she said.

Paul Grimshaw of Auckland law firm Grimshaw & Co, which acts for about 6000 leaky-home owners, said that if the action succeeded, people overseas stood to benefit financially.

"Owners will need to look carefully at the terms they are signing up to.

"Litigation funders often take a percentage of any recovery. So if that is the case here, owners need to look at their net recovery once the funder is paid," he said.

"In other words, cases like this are often high risk, high reward for the funder - a hefty fee if they are successful and nothing if they lose." Grimshaw predicted a tough battle through the courts, saying the action would have to prove the cladding systems failed.

In another matter, James Hardie and CSR reached confidential settlements with the Ministry of Education in its $1.5 billion class action involving 880 leaky school buildings.

The ministry's action was against Carter Holt, James Hardie Industries and CSR to recoup the costs of a remediation programme at about 300 schools.