Litigation & Regulatory Quarterly Brief Q2 2026 – New Zealand

Our Q2 2026 Litigation & Regulatory Quarterly Brief provides a round-up of key legal and regulatory developments from the past quarter, for organisations doing business in New Zealand. We also consider emerging issues and trends that may shape business, compliance and risk management agendas in the months ahead. The Brief focuses on the matters we are discussing with general counsel, board directors and senior business leaders, and highlights what organisations should have on their radar as they plan for the second half of 2026.

If you would like to learn more about any of the insights or topics covered in this publication, please get in touch with the contacts below.

Rising shareholder activism

Shareholder activism is an increasingly common feature of the New Zealand corporate landscape. Boards and general counsel should treat it as an ongoing governance challenge, rather than a remote possibility.

We have explored the evolving tactics of activists, and the key governance, legal and communications strategies companies should consider when faced with an activist campaign. Read our article for insights on how companies can prepare for, understand and respond to the rise of shareholder activism in New Zealand: Responding to shareholder activism: practical steps for New Zealand companies | DLA Piper

 

The Gibson appeal dismissal: what this means for health and safety officer due diligence in New Zealand

Readers will no doubt be aware of the landmark Gibson case – the first time a senior executive of a New Zealand company was convicted under section 44 of the Health and Safety at Work Act 2015 (Act).

In March 2026, the High Court dismissed Mr Gibson’s appeal against his conviction and sentence for failing to exercise the due diligence required of an officer under the Act. This judgment is a significant development for officer due diligence in New Zealand, particularly for officers in large and complex persons conducting a business or undertaking (PCBUs).

Read our Employment team’s article on the practical takeaways from the Gibson appeal dismissal.

The recent escalation of the conflict in the Middle East has underscored the importance of proactive contract management. We have received a number of enquiries relating to affected contracts, particularly around force majeure, material adverse change (MAC) clauses, and frustration.

Reliance on these contractual mechanisms without independent legal advice may leave your organisation exposed. We have published guidance on other legal issues arising from the conflict, including:

• The Middle East conflict: Practical steps for businesses | DLA Piper
• When disruption hits: force majeure, MAC clauses and frustration under New Zealand law | DLA Piper
• Plan, don’t panic: how employers can prepare for fuel disruption in New Zealand | DLA Piper
• Managing fuel-driven cost and delay risk under NZS construction contracts | DLA Piper
• Middle East conflict unlikely to affect long-term strategic planning and growth | DLA Piper

Over the past quarter, there has been considerable activity in the class actions space.

In our December 2025 Quarterly Brief, we reported on New Zealand’s largest class action settlement under the Credit Contract and Consumer Finance Act 2003 (CCCFA), in which ASB Bank agreed to pay customer plaintiffs NZD135.6 million for breaches in relation to disclosure requirements under the CCCFA.

In May 2026, the High Court issued its decision in the class action against ANZ Bank New Zealand concerning similar alleged breaches under the CCCFA. The Court ruled against ANZ, finding that ANZ had breached its disclosure obligations under the CCCFA. ANZ is appealing the decision.

We summarise other recent developments in consumer and shareholder class actions below.

 

Consumer claims

Johnson & Johnson class action highlights expanding consumer class action landscape

The High Court’s decision in Gielen v Johnson & Johnson (New Zealand) Ltd [2026] NZHC 758 highlights a shift in the viability of consumer class actions in New Zealand, particularly for low-value claims.

The class action relates to cold and flu products containing phenylephrine, which overseas regulators have found ineffective when taken orally, despite being marketed for congestion relief. The Court allowed the claim to proceed as an opt-out representative action, recognising that individual claims were too small to pursue independently.

The Court also approved a common fund order at an early stage, supporting the commercial viability of the claim. As we discuss in our article, this class action suggests that claims based on product effectiveness and framed as economic loss are increasingly capable of supporting large-scale litigation.

The case signals heightened litigation risk for consumer-facing and life sciences businesses with large customer bases.

Read our analysis of what this development means in practice and how it may reshape litigation exposure: From cold relief to the courtroom: how effectiveness claims are reshaping consumer class actions | DLA Piper

a2 Milk Australian class action settled in principle

In early April 2026, a2 Milk settled the Australian class action concerning alleged misleading or deceptive conduct in statements made to the Australian Securities Exchange (ASX) and New Zealand Exchange (NZX) regarding its revenue and earnings forecasts.

a2 Milk agreed to pay AUD62 million in final settlement, and the action has now been discontinued. The New Zealand opt-in class action against a2 Milk for the same alleged breaches was stayed in 2023 pending resolution of the Australian proceedings.

The Australian settlement may affect the New Zealand action. Further updates will follow as the New Zealand proceedings progress.

 

Shareholder claims

Fintech FNZ faces USD4.6 billion proceeding in the Wellington High Court

Approximately 200 current and former employee-shareholders have filed a high-value class action against FNZ Group, alleging various breaches of the Companies Act 1993.

The shareholders allege that the FNZ board executed three equity raises in 2024 and 2025 that transferred USD4.6 billion of wealth from the employee-shareholders to FNZ’s institutional shareholders.

FNZ remains incorporated in New Zealand under the Companies Act 1993, which is why the proceedings must be brought here. The parties attended a two-day hearing in mid-May 2026 to resolve whether the case is properly heard in New Zealand, as the employee-shareholders claim, or in London by way of arbitration, as FNZ’s institutional owners and most of its directors’ claim.

If the Court allows the class action to proceed, this will be the highest-value class action to be heard in New Zealand.

Southernwood v Brambles – a landmark development in Australian securities class actions

In Southernwood v Brambles (No 3) [2026] FCA 418, the Australian Federal Court found that Brambles engaged in misleading or deceptive conduct and breached its continuous disclosure obligations by maintaining earnings guidance without a reasonable basis.

The company repeatedly reaffirmed its FY17 guidance and FY19 targets despite lacking reasonable grounds. When the guidance was withdrawn, Brambles’ share price fell, causing shareholder losses.

The Court held that this contravened Australia’s Corporations Act 2001 (Cth) and resulted in quantifiable loss, and awarded damages. It is the first Australian class action decision to establish both liability for continuous disclosure breaches and quantifiable shareholder loss.

This decision is likely to increase confidence among plaintiff firms and litigation funders, and may encourage similar claims in Australia and New Zealand.

 

Litigation funding and adverse costs

Undisclosed litigation funder held jointly liable for adverse costs

The District Court reminds defendants that where a claim appears uneconomic, it may be worth asking who is really funding and directing the litigation. Judge David J Clark has delivered a timely reminder that litigation funding is judged by substance, not labels, and that a failure to be up front may sound in adverse costs (Batchelor v Hattotuwa [2026] NZDC 14574).

The underlying dispute was a claim of defamation by Julian Batchelor against TVNZ and Dr Sanjana Hattotuwa. After it emerged that Mr Batchelor’s legal fees were being funded by a third party, the District Court found that third party was, in reality, an undisclosed litigation funder (Batchelor v Hattotuwa [2026] NZDC 8881). Arguments that the support was merely altruistic did not avoid the disclosure obligations identified by the Supreme Court in Waterhouse v Contractors Bonding Ltd. Judge Clark confirmed that where proceedings are funded by an unrelated third party, the funder’s identity, location and amenability to New Zealand jurisdiction must be disclosed.

However, that was not the end of the matter. When the substantive proceeding was ultimately dismissed, the Court was particularly critical of the deliberate concealment of the funding arrangements in assessing liability for costs, holding that the defendants had been deprived of protective steps they could otherwise have taken. The non-disclosure was found to be an abuse of process.

Perhaps more significantly, the Court held that the District Court has inherent power (as opposed to inherent jurisdiction) to award costs against non-parties to prevent such abuse of its processes. Applying the Dymocks Franchise Systems v Todd (No 2) principles, as endorsed in Waterhouse, Judge Clark concluded the funder’s involvement extended well beyond passive financial support. The result was a costs award (subject to an uplift) against both the unsuccessful plaintiff and the funder on a joint and several basis.

Key takeaway: When faced with aggressive or seemingly uneconomic litigation, it may be strategically valuable to interrogate whether there are any third-party backers. This decision reinforces that courts will look beyond formal parties to the commercial reality of litigation. Where a third party is funding and influencing proceedings, defendants may have grounds to seek disclosure of the funding arrangements and, in appropriate cases, pursue the funder directly for costs. The courts can also be expected to take a failure to disclose the true identity of the funder seriously.

The second quarter was busy in the regulatory enforcement space, with a number of new fines and settlements arising out of investigations conducted by the Financial Markets Authority (FMA), the Commerce Commission and the Reserve Bank of New Zealand (RBNZ). We summarise the key enforcement activity in New Zealand during the quarter below.

 

Regulatory roadmap: FMA’s Financial Conduct Report 2026/27

The FMA has released its 2026/27 Financial Conduct Report, setting out its regulatory priorities across New Zealand’s financial services sector.

The report signals a more sector-focused supervisory approach, with key cross-sector themes including conflicts from remuneration structures, product design, complaints handling, and fraud detection and prevention. It also highlights growing regulatory focus on custody, wholesale offer disclosure, insider conduct, consumer credit, and the use of artificial intelligence (AI) in financial advice.

Read our latest insight for a summary of the key takeaways and what regulated organisations should be considering for the year ahead.

 

A year in enforcement: key regulatory fines in New Zealand in 2026 to date

A summary of the key regulatory fines imposed by New Zealand regulators is below.

 

The key legislative developments this quarter are:

 

1. FMA becomes responsible for the CCCFA from 1 July 2026

From 1 July 2026, the FMA is responsible for the Credit Contracts and Consumer Finance Act 2003 (CCCFA). The roles of the Commerce Commission and the Ministry of Business, Innovation and Employment (MBIE) in relation to the CCCFA have transferred to the FMA.

The FMA has indicated that its initial focus will be engagement with industry as it takes on this additional responsibility, with businesses expected to see what this means in practice over the coming months.

 

2. New Insurance (Prudential Supervision) Amendment Bill released in April

At the end of April 2026, the RBNZ released a draft Insurance (Prudential Supervision) Amendment Bill (IPSA Bill).

The IPSA Bill proposes stronger powers for the RBNZ under the Insurance (Prudential Supervision) Act 2010 (IPSA), including in enforcement and standard-setting. It also proposes changes to who is captured by IPSA and amends the settings for approving transactions.

Submissions on the IPSA Bill are due by 7 July 2026. We analysed the potential changes and their potential impact on insurers in our recent article: Key points for insurers in the new IPSA Bill.

 

3. Multiple AML/CFT law changes passed in May

Two Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Bills passed their third readings in the House in May, and the changes came into force from 1 July 2026.

Reporting entities under New Zealand’s AML/CFT regime should note:

• The Department of Internal Affairs (DIA) is now the sole AML/CFT supervisor in New Zealand, taking over the roles of the FMA and RBNZ.
• The DIA also has new functions as AML/CFT supervisor. These include providing timely and up-to-date guidance to reporting entities, and engaging with reporting entities to identify and mitigate any unintended consequences of the AML/CFT regime.
• The DIA can issue enforceable rules and notices regarding specific AML/CFT practices, such as prescribing requirements for customer due diligence. Consultation with affected persons is required before any rules or notices can be made.

The DIA may commence, continue, or enforce any proceeding relating to the previous supervisory functions of the FMA or RBNZ, with the agreement of the FMA or RBNZ as relevant.

This section covers climate-related and environmental, social and governance (ESG) developments relevant to organisations doing business in New Zealand and Australia.

 

Government proposes to amend Climate Change Response Act 2002 to restrict climate-related tort claims

The Government has introduced the Climate Change Response (Tort Liability) Amendment Bill, which would amend the Climate Change Response Act 2002 to prevent courts from imposing tort liability for climate change-related damage caused by greenhouse gas emissions.

The proposed reform would apply to both existing and future proceedings. This would halt the landmark Smith v Fonterra litigation, New Zealand’s first climate change tort claim seeking to hold six major private companies liable in tort for climate change-related damage.

Mr Smith has since filed judicial review proceedings challenging the Government’s decision, alleging that the Government consulted the companies defending the case but not him, and failed to adequately consider how any resulting climate-related harm would be addressed if existing climate-related causes of action were removed. He and a group of non-governmental organisations (NGOs) have also raised the matter with the UN Special Rapporteur on Climate Change.

The Labour Party has announced that it would repeal this legislation if elected at the November 2026 general election.

 

FMA releases latest climate-related disclosures insights report

The FMA has published its third climate-related disclosures insights report, based on a review of 62 climate statements from the second reporting period.

The report focuses on four key areas: improvements since earlier reporting, physical risk disclosures, financial impacts and transition planning, and greenhouse gas (GHG) assurance.

While the FMA notes improvements in reporting structure, governance, and GHG disclosures, it also identifies ongoing gaps including incomplete filings, inappropriate referencing, and limited detail on offset use.

Read our detailed article on the report here: FMA raises the bar on climate reporting: what reporters need to know | DLA Piper

 

Judicial review succeeds against NZ Super Fund in ethical investment challenge

In Nazzal v Guardians of New Zealand Superannuation [2026] NZHC 681, the High Court found the Guardians of New Zealand Superannuation’s ethical investment policies to be ‘unreasonable and unlawful’.

The Court held that the Guardians’ framework lacked clear standards and procedures to meet statutory obligations, including safeguarding New Zealand’s international reputation. While no divestment was ordered, the Guardians have been required to revise their framework, signalling closer judicial scrutiny of statutory investment duties.

Our recent article, High Court clarifies expectations for NZ Super Fund’s responsible investment policy, discusses this case in more detail.

 

Changes proposed to Australian sustainability reporting regime

Australia’s sustainability reporting framework continues to evolve, with the Australian Federal Budget proposing changes to reporting thresholds, assurance settings, and further guidance on the ‘proportionality’ regime, including the assessment of ‘undue cost or effort’.

These developments reflect a broader trend seen internationally, as sustainability reporting regimes are refined over time in response to market and regulatory feedback. As with financial reporting, a gradual maturation of standards and practices can be expected.

Our article, Changes to Australia’s sustainability reporting regime: what you need to know, outlines the proposed changes in greater detail.

 

Modern Slavery Bill progresses to select committee

The Modern Slavery Bill has now passed its first reading and has been referred to the Education and Workforce Committee, following Labour securing National’s support to prioritise the Bill as part of negotiations on the New Zealand–India Free Trade Agreement.

The Bill has broad cross-party support, with the exception of ACT, and the Government intends to pass it before Parliament rises ahead of the 2026 election. The select committee is due to report back on the Bill by 31 August 2026.

Our article, Bipartisan deal accelerates new modern slavery regime for New Zealand, outlines the key features of the Bill and the practical steps businesses should consider in response.

 

XRB consults on future direction of climate reporting

The External Reporting Board (XRB) has launched consultation on a draft climate reporting roadmap that proposes a new climate reporting standard, NZ IFRS S2, based on the globally adopted IFRS S2 framework.

The proposed standard would align New Zealand’s reporting requirements with international standards, support harmonisation with Australia’s regime, and maintain relevance to New Zealand’s legislative and regulatory environment. Consultation on the draft roadmap closes on 30 September 2026.

The XRB has also launched a consultation on proposed amendments to NZ CS 1 Climate-related Disclosures that would align New Zealand’s scope 3 greenhouse gas emissions disclosure requirements more closely with international standards.

The proposals would allow climate reporting entities to exclude certain investment-related emissions from scope 3 disclosures and incorporate existing XRB guidance on emissions exclusions into the standard as mandatory application material. Consultation closes on 29 July 2026.