Guidelines for applications
|
The Trust's intention is to focus on claims where a business wrongdoing will otherwise go unremedied, or where the legality of an alleged wrongful act would not be tested if the Trust did not provide assistance. This may occur where an action raises questions of principle that ought to be fully explored, but that would not be worth pursuing by an individual plaintiff or a collection of plaintiffs on a strict cost/risk/benefit analysis.
In cases where shareholders could achieve the same result without the assistance of the Trust, the Trust would choose not to participate. The Trust's policy is to apply its resources to cases with compelling moral merit, ie where there is very clear dishonesty or impropriety. It would not consider supporting actions where success would rely on technical infringements or might be felt to be something of a windfall. |
Also see: |
In supporting specific actions the Trust does not seek to restore individuals' fortunes; rather it aims to foster honesty and an understanding of and respect for compliance with sound commercial law and integrity in business governance.
Types of business wrongdoing the Trust would consider pursuing may involve:
The Trust wants to target dishonest behaviour, not carelessness or poor judgement.
The Trust will also consider opposing or assisting in opposing proceedings which may have the effect of deterring investigation or reporting of actions to promote integrity in the governance of businesses or regulatory agencies in New Zealand. For example it would consider opposing a 'gagging' order or defamation action.
In some cases, the Trust is able to provide reassurance to plaintiffs pursuing legal action. For example, the Trust reassured the shareholder action group pressing insider trading claims arising out of the Fletcher Challenge takeover of Southern Petroleum in 1995. The group's managers were worried that the defendants might be dragging out the preliminary proceedings, thinking they could win by exhausting the plaintiffs. Faced with an appeal, the action group's managers were concerned about their liability for the defendants' costs should they fail to get the court to order the company to pay for the litigation. The Trust agreed to support the plaintiffs in the event of a loss at that stage. In the result the plaintiffs obtained the necessary order and further Trust assistance was not required.
If an action results in financial compensation the Trust would normally expect to share in the proceeds.
Decisions of the Trust on whether or not to support an application are final.
Types of business wrongdoing the Trust would consider pursuing may involve:
- insider trading
- unethical behaviour
- suspected fraud
- conflict of interest
- deliberate deception
The Trust wants to target dishonest behaviour, not carelessness or poor judgement.
The Trust will also consider opposing or assisting in opposing proceedings which may have the effect of deterring investigation or reporting of actions to promote integrity in the governance of businesses or regulatory agencies in New Zealand. For example it would consider opposing a 'gagging' order or defamation action.
In some cases, the Trust is able to provide reassurance to plaintiffs pursuing legal action. For example, the Trust reassured the shareholder action group pressing insider trading claims arising out of the Fletcher Challenge takeover of Southern Petroleum in 1995. The group's managers were worried that the defendants might be dragging out the preliminary proceedings, thinking they could win by exhausting the plaintiffs. Faced with an appeal, the action group's managers were concerned about their liability for the defendants' costs should they fail to get the court to order the company to pay for the litigation. The Trust agreed to support the plaintiffs in the event of a loss at that stage. In the result the plaintiffs obtained the necessary order and further Trust assistance was not required.
If an action results in financial compensation the Trust would normally expect to share in the proceeds.
Decisions of the Trust on whether or not to support an application are final.