MinterEllisonRuddWatts predicts four factors to shape litigation in 2023

  • Firm news

    09 February 2023

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Climate change litigation risk and ‘greenwashing’, regulators’ increasing focus on broad conduct expectations and businesses’ social licence to operate rather than bare legal compliance, the increasing challenges of cyber risk, and the effects of slowing global economic activity and increased costs upon companies on the verge of insolvency and their directors are likely to be four key drivers of litigation in 2023. 

With activists around the world increasingly turning to the court system to hold accountable those perceived as directly or indirectly contributing to climate change, this trend is expected to grow and be reflected in activity in New Zealand’s courts. A stronger regulatory focus on greenwashing claims about environmental or social aspects of products and services can also be expected, given consumers’ interest in the accuracy of these claims and high-profile regulatory action overseas in this area. Claims to be ‘zero carbon’, ‘low emissions’ and ‘socially responsible’ will increasingly come under inspection. 

Partner and co-leader of MinterEllisonRuddWatts’ Litigation team, Jane Standage says we can expect to see a similar crack-down on greenwashing by New Zealand regulators as seen in Europe and Australia recently. 

“There is no doubt that greenwashing will be front of mind for New Zealand regulators. Regulators are already scrutinising greenwashing claims, putting in place a variety of legal frameworks and guidelines to make ESG claims more transparent and accessible, and enforcement actions and complaints in this area are likely to be on the rise in 2023 and beyond,” says Jane Standage. 

Cyber claims will remain in the spotlight, with the threat of malicious actors breaching commercial and government entities’ cyber defences continuing to escalate. Entities that hold sensitive data or control payment flows are particularly at risk. Government agencies, investment funds, medical providers, professional services firms and insurance companies are attractive targets. 

Partner Andrew Horne believes that cyber attacks will remain a significant source of losses and will continue to give rise to complex legal claims as well as insurance claims. Obtaining cyber insurance will pose increasingly complex challenges for insurers, brokers, and insureds. 

“What we are seeing now is an increase in cyber insurance cost alongside a reduction in cover by insurers. Insurers rely on predictability to accurately assess risk and set appropriate premiums. When it comes to cybercrime, they are chasing a moving – and volatile – target,” says Andrew Horne. 

“Cyber insurance continues to offer real value to insureds, especially in conjunction with good organisational ‘IT hygiene’. With insurers asking detailed questions about a customers’ IT systems and effectively declining those with inadequate security, cyber insurance cover is quickly becoming a mark of quality for organisations – insurers are choosing only to cover organisations with good technology security practices.” 

For more detail on New Zealand’s litigation landscape, read MinterEllisonRuddWatts’ Litigation Forecast 2023.