Leaky homes mega-lawsuit: James Hardie gets $1.25m settlement payout, 'terrible day' for homeowners

Adina Thorn said the outcome was terrible for homeowners and showed how tough class actions in New Zealand could be. Photo / Jason Oxenham

The biggest leaky homes lawsuit in New Zealand history has been settled out of court.

And although aggrieved homeowners at one point reportedly sought $220 million, the target of the lawsuit has instead received a payout.

The Herald earlier today revealed the enormous class action was on hold.

This afternoon, the James Hardie group confirmed the case was settled out of court, and said it was pleased with the outcome.

But a lawyer for homeowners who sued James Hardie over its Harditex monolithic cladding system said it was a "terrible" day.

James Hardie said as part of the settlement, it would receive payment of $1.25 million from Harbour Litigation Funding.

Homeowners from the West Coast, Auckland, Te Puke and Wellington's Hataitai (pictured) testified at the biggest-ever leaky homes lawsuit. Photo / 123RF

The company said the settlement supported James Hardie's continued belief that the allegations lacked merit.

John Arneil of James Hardie Australia said the company behaved as a responsible manufacturer.

But he added: "We remain very sympathetic to homeowners negatively impacted by weathertightness issues."

Harbour funded the class action.

"There is a full and final settlement of all claims arising directly or indirectly in relation to litigation about the relation to the Harditex cladding product," James Hardie added.

"The case will be discontinued in its entirety."

Adina Thorn, who represented homeowners, this afternoon said it was a dreadful outcome for the many hundreds of homeowners involved.

"It's a terrible day for the homeowners - and that's where my focus is and always has been."

People suing the James Hardie group claimed Harditex cement and fibre cladding system caused problems including damp, mould and rot in their houses.

She said the outcome was effectively a three-way settlement and homeowners were caught between James Hardie and Harbour Litigation Funding.

Thorn said homeowners had been through a lot and today's news showed how tough it could be to launch class actions in New Zealand.

"We've been working on this for five to six years. It's a huge, huge loss for them."

The enormous class action at the High Court in Auckland was expected to last for several more weeks but was settled mid-way through a 17-week hearing.

Thorn said the settlement did not say anything about the qualities or properties of Harditex.

"The settlement was accepted by the representative claimants on behalf of the plaintiffs and following a process by an Independent Queen's Counsel."

The homeowners had not incurred any costs for taking part in the class action, Thorn added.

James Hardie said it had two remaining New Zealand weathertightness claims outstanding.

It said a ruling from the High Court in Wellington was expected on one of these lawsuits.

The other ongoing lawsuit, known as the Waitākere litigation, was scheduled to start in May 2023 at the High Court in Auckland.

"The Company believes it has substantial factual and legal defences to these claims and is defending the claims vigorously," James Hardie added.