James Hardie to 'vigorously defend' cladding quality in face of potential class action suit

Tuesday 11th August 2015

James Hardie will "vigorously defend" allegations against its Harditex product as Wellington law firm Parker & Associates tries to rally support for a class action against the global building materials supplier.

Parker & Associates yesterday filed a claim in the High Court in Wellington on behalf of Tracey Cridge and Mark Unwin, alleging James Hardie was negligent in its design, manufacture and supply of the Harditex cladding system. The law firm wants to form a group for a class action or test case on behalf of similarly affected homeowners. James Hardie said it has been notified of the claim, but backs the quality of its products.

"James Hardie has been notified of a single new claim and it intends to review the facts of this specific claim, as we do with all product related performance inquires," a spokesman said in an emailed statement. "However it should be understood that James Hardie stands behind the integrity and quality of its building materials products and will vigorously defend any allegations made against its products."

The potential 'leaky home' class suit would be the second this year after Adina Thorn Lawyers launched one against plaster cladding manufacturers, and follows from a Court of Appeal ruling that a Ministry of Education's claim against Carter Holt Harvey isn't subject to a 10-year limitation under the Building Act.

Parker & Associates said potential claimants have until the end of the year to join the claim before a 15-year time bar comes into effect, and will offer a free preliminary assessment for the first 500 applicants.

“Anyone whose property was built after 1990 using Harditex cladding and has suffered damage as a result of the alleged system defects, may be eligible to join the claim,” partner Dan Parker said. “Many homeowners will have no idea of potential problems with their properties and hidden damage without expert investigation.”

James Hardie has been involved in a number of leaky building cases in New Zealand, and as at March 31, held a US$2 million provision, net of third-party recoveries, against potential weather-tightness claims, and flagged it could face an extra US$500,000 of losses due to the uncertainties over the claims. It reported a US$4.3 million income benefit on its weather-tightness claims in the 2015 financial year due to a lower provision, increased rate of claim resolution, fewer claims at the end of the period, and a reduction in the number of claims received.

The building materials maker was initially named as a defendant by the education ministry in its suit against cladding manufacturers, and later reached a deal with the government agency, which the parties said would support the remediation of weather-tightness issues in existing school property and support future developments across the country.

New Zealand has yet to develop legislation for class actions, with representative suits evolving through court rules rather than legislation and leaving a lack of clarity around some of the procedural rules, which can lead to protracted litigation.

The government had expected to complete the policy work for the legislation in 2012, adopting one of the recommendations in a parliamentary select committee report into the spate of finance company collapses through the second half of last year, but has since put the work on the backburner.

BusinessDesk.co.nz

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