Litigation funding in an insolvency context: a trans-tasman comparison and analysis
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Date
2024
Authors
Taylor, L.
Lombard, S.
Symes, C.F.
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New Zealand Universities Law Review, 2024; 31(1):185-214
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It is not uncommon for Australian and New Zealand liquidators conducting an insolvent liquidation to identify a right to sue against a viable defendant, but for there to be insufficient assets in the liquidation to fund enforcement action. One funding option open to Australian and New Zealand liquidators in this circumstance is entry into a commercial litigation funding agreement. We undertake a comparative analysis of the key components of the Australian and New Zealand regulatory frameworks governing liquidators’ entry into commercial litigation funding agreements to identify similarities and differences. These conclusions are used to assess the overall efficacy of each jurisdiction’s framework and how each might be improved. We identify some similarities but a greater number of differences in the Australian and New Zealand regulatory frameworks. We assess New Zealand’s framework as having greater uncertainty in its ambit which may have adverse consequences for New Zealand liquidators and funders given that several large litigation funders operate in both jurisdictions. We offer proposals tailored to each jurisdiction, but the identified differences between Australia and New Zealand mean that overall consistency in terms of legal frameworks and (it follows) outcomes will not be possible unless one jurisdiction makes an unlikely decision to embark on significant amendment of its corporate insolvency framework.
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Copyright 2024 Thomson Reuters New Zealand
Access Condition Notes: Accepted manuscript available open access