Lawyers eyeing class action for investors

Former CEO of Hanover Finance Mark Hotchi. Photo / Paul Estcourt

Auckland law firm Turner Hopkins is teaming up with Australia's biggest law practice, Slater and Gordon, to review the viability of taking a class action lawsuit against corporate trustees appointed to oversee the activities of failed finance companies such as Hanover and Bridgecorp.

These claims will be in the form of proceedings on behalf of large groups of investors in one or more of the failed finance companies, Turner Hopkins said on its website.

"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," it said. "Investors may well be entitled to recover economic losses incurred by them as a result," the firm said.

Turner Hopkins, which has been working alongside Slater and Gordon for the past 12 months in analysing potential claims, has secured the services of a Queen's Counsel and a number of accounting and financial specialists. The costs of bringing these claims will be met through litigation funding.

"This would mean that investors would not be required to make any payment at all for bringing this case," Turner Hopkins said.

Investors would not be exposed to any risk of adverse costs or other awards against them should the claim be unsuccessful, the firm said.

Turner Hopkins is seeking expressions of interest from investors who have sustained losses following the collapse of any of the New Zealand finance companies during the period between 2006 to 2009.

Bridgecorp collapsed in July 2007 owing $459 million. The following year, Hanover Finance froze repayments to investors owed $554 million.