Disputes Tribunal Amendment Bill

We come first to the Disputes Tribunal Amendment Bill and to Part 1. This is the debate on clauses 3 to 7, “Amendments to Disputes Tribunal Act 1988”, and Schedule 1. The question is that Part 1 stand part.

A very good morning, members. Great to be here and to be discussing this important Disputes Tribunal Amendment Bill.

In summary, the changes that are being effected by this Government are: increasing the financial threshold from $30,000 to $60,000, and a number of other aspects in regards to that. The primary purpose of these changes is to improve access to quick and low-cost disputes resolution so that people can resolve those disputes and those claims as fast as practicable.

The assessment, in terms of the range that has been set, was considered by an independent group and has informed the setting of where that threshold is. It is the view of the Government that this is an appropriate level in which to maximise the benefit from that. With that, I very much welcome questions from the floor.

Thank you, Madam Chair. We are absolutely supportive of increasing the jurisdiction of the Disputes Tribunal to $60,000—and a shout-out to all those hard-working dispute tribunals referees who resolve numerous civil disputes.

I guess my questions really revolve around missed opportunities and also safeguards, I suppose, because $60,000 is a lot of money, in short. One of the challenges here is—and it was raised with the Minister of Justice relatively informally and discussed at the Justice Committee, but to no avail. One of the challenges is that Disputes Tribunal referees are often lawyers but are not required to be lawyers. In fact, the legislation itself refers to a suitable qualification such as law, medicine, or dispute resolution, or words to that effect. I’ve always found that to be a little odd. One of my questions to the Minister in the chair, the Hon Simon Watts, is whether it was considered appropriate to have people not qualified in law making legal decisions that in fact significantly affect people’s property rights and wealth, because $30,000 is a lot of money for many people—in fact, if you think of the lowest-income New Zealanders, those on perhaps jobseeker benefits, it’s pretty much the whole lot. I’m a little concerned that we’re increasing the powers of the Disputes Tribunal—which is appropriate—but not increasing the safeguards in a commensurate manner.

The first question is on the qualifications of Disputes Tribunal referees. Should we have Disputes Tribunal referees who are not legally qualified determining disputes which are $60,000? That’s a decent annual income for some people. You know, it’s a really genuine question. Section 7 of the Act deals with qualifications.

The second question is this—and I’ve got a tabled amendment in this regard. It’s around the fact that disputes in the Disputes Tribunal are resolved with regards to the law but not on the basis of the law. That is to say, a Disputes Tribunal referee, you’ve got this dispute around, say, a car—although that would go to the motor vehicle Disputes Tribunal, so I can’t use that one—a dispute around a boat worth $60,000. The Disputes Tribunal referee can look at the law and say, “Well, I know the law of misrepresentation and I know the law of contractual mistake. I’ve taken it all into account, but I’ve decided, in this case, not to apply it.” So you lose. Now, that’s what the legislation says. You look at the law, you think, “Does that lead to a result I think’s fair?” When you’re getting into this space, you can’t have people, you can’t have referees, applying their own views of fairness. We need Parliament’s view of fairness, which is called the law.

On the Table, we have an amendment that says that when you get over $30,000, that doesn’t apply—your sense of fairness doesn’t apply; the law applies. I think that’s a really useful change to make it clear that the law of New Zealand is the base moral code in civil disputes, not the reckons, however informed they may be, of our good Disputes Tribunal referees. So there’s two points, perhaps, to start.

Thank you very much to the member Duncan Webb for the question. I think the point that’s being raised in the context is whether the referees are qualified to make decisions in regards to the higher value to which the thresholds have been adjusted. I mean, it is very much the view of the Government that the existing appointment criteria that is in play is sufficient for requiring those suitable candidates to ensure that they are appointed as referees. It also maintains the flexibility.

To be specific about the number of individuals that we are talking about, we are talking around 62 individuals that fulfil these roles. Of those, approximately 58 are lawyers and have the qualifications of that context, and the remaining four, in the main, have greater than 10 years’ experience in this area. So it is the assessment of the status quo that seems to be appropriate in the context of the personal attributes, knowledge, and experience of those referees, and on that basis, we’re comfortable with where it’s at.

Thank you, Madam Chair. I thank the Minister for responding to that question, but I think the question that the Hon Dr Duncan Webb is raising is a really good one. The Green Party does support his amendment on this bill—particularly the one around clause 7(b), new section 18(6A) of the principal Act. I think that’s a really important safeguard for what this bill is trying to achieve.

I just want to check with the Minister in terms of what we’re seeing in the regulatory impact statement around the policy intent of this bill. I want to specifically focus on what we see in Part 1, which has multiple sections around increasing the threshold from $30,000 to $60,000. Part of the reason for this is so that we are able to ease some of the burdens around the function and some of the issues that we’re seeing in terms of the District Court. But, again, like what the Hon Dr Duncan Webb mentioned, the Disputes Tribunal does fulfil a very different role in comparison. What we’re also seeing here is, in terms of the limitations and constraints as expressed in the regulatory impact statement, that the scale of the problem is unknown in terms of the increase of threshold from, let’s say, $30,000 even up to $100,000.

I guess my first question to the Minister is: if the scale of the problem is unknown, what expectations would the Minister have—maybe via the officials—that this is something that is genuinely going to serve the purpose as intended by this legislation of increasing that threshold from $30,000 to $60,000? That’s my first question.

I also want to check with the Minister whether, as part of, again, the regulatory impact statement, other things have been considered and have been ruled out as a result of this as well.

Thank you, Madam Chair, and I really appreciate the opportunity to ask some questions of the Minister, because I, of course, do agree with moves that are taken to ensure greater access to justice, which I think is a good thing.

My first question is a bit of a general one and it’s in relation to the Law Society submission, which talked about the value of increasing access to justice. However, their view was that it doesn’t set aside the need for a more comprehensive review of access to tribunals and the Disputes Tribunal in particular. They made a number of proposals for change. Their suggestion was that there was a need for a first principles assessment of the tribunal. The first question is a general one about whether that was considered at any stage.

The second question is in regard to the threshold itself. Obviously, colleagues have spoken to the needs for safeguards as we increase the threshold, but when the Rules Committee was considering improving access to civil justice, their report suggested an increase to $70,000. I wonder whether that was based on data in regard to the abandonment of a portion of the value of a claim, or whether the data demonstrates that actually that abandonment portion really fell up to the $60,000 threshold, which was the basis for going with $60,000.

Then also, in relation to the Law Society’s submission, they noted that there was an issue in terms of narrow appeal grounds and that the Rules Committee proposal had suggested both an increased threshold but also that there was potentially a need for an appeal right to exist as well—whether that was something that the Minister had considered, even if it was a limited appeal right of some regard.

Then my last question for now is in relation to clause 5, which amends section 14, and that concerns the abandonment of a portion of the value of the claim to bring it in line within the jurisdiction of the Disputes Tribunal—so within the band of the new $30,000 to $60,000. My question is really a monitoring one: is there is an intent to review the new abandonment provisions to see whether there’s justification to shift the threshold even higher in terms of what, I believe, the Rules Committee had suggested, either going to $70,000 or to 100,000? Thank you.

Thanks, Madam Chair, and thanks to members for those questions. In regards to the questions by the member regarding clause 5—and also broader questions in regards to increasing the financial threshold higher than $60,000—that was considered; however, in the context of the public interest, we were not of the view that the Disputes Tribunal model was appropriate to be hearing higher-value cases. It is appropriate, obviously in the view of the Government, to increase it from $30,000 to $60,000, but not beyond that.

On points raised in regards to the Rules Committee, submitters to that Rules Committee, as part of the Disputes Tribunal model, noted that it may not have suited to hear higher-value claims, where parties would benefit from a right to appeal and legal representation. In that context, I believe that answers it.

There were other questions, initially, from Dr Lawrence Xu-Nan in regards to threshold changes. I’ve provided that overview in my opening statements, as to why we have moved from $30,000 to $60,000 in regards to efficiency. That covers off those questions.

Thank you, Madam Chair. I don’t think the Minister has yet addressed my question relating to section 18 of the principal Act in respect to which there is an amendment on the Table. I’ve just grabbed a copy of the bill. Section 18(6) says, “The Tribunal shall determine the dispute according to the substantial merits and justice of the case, and in doing so shall have regard to the law but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.” Now, my view is that once you’re getting into this kind of number, the legal rights and obligations are pretty handy, and we should be actually applying them. I have no doubt that 95 percent plus—maybe 99 percent—of the time, that’s exactly what tribunal referees do. But I don’t think we should have a forum where you can just say, “I reckon that the substantial merits and justices of the case are this.”, because the substantial justice and merits of the case are what the laws says it is, not what a Disputes Tribunal referee thinks it is. I’d appreciate the Minister’s response on whether he thinks you should be able to decide civil disputes for up to $60,000 on a basis other than the law.

My next point actually flows from that, and that’s on appeal rights. The small claims tribunal was started off for $500 disputes, and it was a quick-fire, no-appeal dispute resolution. That was fine at that level, but now we’ve got up to this level, we’ve got a question about what appeals are allowed. Section 50 of the Act deals with appeals, and the only ground of appeal is that the proceeding was conducted by the referee in a manner that was unfair to the appellant. Now, that’s a way of saying a breach of natural justice. It’s not that the decision is unfair, not that the legal conclusions are unfair, not that the factual findings are unfair, but that the proceedings were conducted in a way that was unfair. A classic example is where the respondent rings up and says, “I’ve had a car crash. I can’t make it on time.”, and the referee doesn’t adjourn. It proceeds without hearing from them and decides against them. They didn’t get a fair hearing.

That’s a classic example of being proceeded unfair and a good ground of appeal. What about if they get the law wildly wrong? What about if they say, “I’ve had a look at the law of misrepresentation, and I think it says this, and, therefore, you lose.”, and they just got it wildly wrong? That’s a classic error of law. As long as they have regard to the law, it doesn’t matter if they get it right or wrong. In this section, as long as they look at the law and go, “I’m going to look at the law of misrepresentation.”, an error of law is not a basis for an appeal, because what subsection (2) of section 50 says is “the Referee fails to have regard to any provision of any enactment that is brought to [their] attention.” You can have a regard to it and entirely misconstrue it, but it’s not a ground of appeal. Now, I’ll tell you what. If I had a referee who just had a bad day and got the law wildly wrong and then said, “You owe that fellow $60,000.”, I think I should have a right of appeal to someone who is able to correct that error.

Now, findings of fact are different. “I’ve listened to you both. I think I believe you and not you.”—that’s a finding of fact. I can accept that you can’t appeal on those things or that it’s a much higher threshold for appeal, because findings of fact are always going to have an element of the first-instance decision maker having a better opportunity. But making a gross error of law—turning your mind to it and getting it wrong—should be a grounds of appeal. That’s what my tabled amendment deals with. It provides that that for claims over $30,000, an error of law should be a ground for appeal.

Now, if the Minister would like to stand up and say, “No. Even though they make an error of law and get the law wildly wrong, I think it’s OK for someone to get a windfall of $60,000 and the other person to lose out entirely unjustly and at variance with the law to the tune of $60,000.”, I’d be interested to hear that, but I’d much prefer him to say he’d support my tabled amendment.

Thank you, Madam Chair. Thank you, Minister, for your response to my questions, and I also do think that the previous speaker who raised some really important questions. Yes, the Minister has mentioned it, but the threshold as noted is not a small amount, and we see in the regulatory impact statement. It’s quite a substantial increase from recent years and actually since the history of the threshold for the Disputes Tribunal.

One of the things that the Minister mentioned, and I just want to pick up on what the Minister said before, is in terms of the threshold being set at $60,000 in terms of also—I think the Minister mentioned—the public interest. I really want to get the Minister’s thoughts around what we see in the regulatory impact statement for paragraphs 55 to 57, which is that there is what would be, I guess, the negative implications of increasing that threshold in terms of the public’s confidence in the Disputes Tribunal and also the impact to natural justice.

As we heard from the previous speaker, the Hon Dr Duncan Webb, because of the significant increase in amount, this may have implications around natural justice if the error of law and misrepresentation is not considered thoroughly, which then will have the adverse effect of eroding public confidence around this. It would be really good to hear from the Minister on that in combination with what we’re seeing as reported in the regulatory impact statement.

Now, another thing I would like to pick up on is Schedule 1, which is the sections attached to clause 7 in Part 1 of the bill. One of the things around Schedule 1, inserting into Schedule 1AA new Part 3, “Provisions relating to Disputes Tribunal Amendment Act 2024”, is that clause 3(2)—noting that there might be conversations later on around the commencement date, but the commencement date is said to be three months after the Royal assent. Subclause (2) says “If the claim has not been disposed of before the commencement date, the person may not, on or after the commencement date” amend or withdraw the case. Basically, this allows people a three-month period where you may get people withdrawing their case, which is currently with a threshold of $30,000 and reapplying for up to $60,000. Is there an anticipation by the Minister or by the officials of the extent that this may happen? That would be my second question to the Minister on Schedule 1.

Thanks again, members, for those questions. Just in response specifically to new clause 3(2) of Schedule 1AA, inserted by Schedule 1, primarily, the change there is to stop someone from, in effect, amending a claim during the process in order to allow them to take benefit from the changes that are going—so it means that claims that are already in play need to continue under that model. So that’s the response around clause 3(2).

To the points raised by the Hon Duncan Webb in regards to decision-making mandate, appeal rights, and other components, at a fundamental level, the decisions that are made are obviously a core aspect of the model that is being implemented and intended in terms of the principles around fairness, common sense, and efficient decision-making. Now, the referees, in this case, are required to make decisions in accordance with the substantial merits and justice of the case while also having regard to the law, as opposed to having to administer the law and give effect to strict legal rights or obligations. So, therefore, by making any changes, that could risk undermining the tribunal’s access to justice benefits such as timely resolution or finality of the decision—then that is the reason in that context.

Why are the appeal rights limited? The primary consideration there is that limited appeal rights, in principle, provide finality for the parties. However, there are mechanisms—you used an example of coming in, bad day, how would that play through? Well, appeals from the Disputes Tribunal to the District Court are obviously at play. There is judicial review by the High Court also. But in an instance of an individual such as the case, the party to a claim, or a person who is party to a claim, who is unhappy with the outcome is able to apply for one rehearing. So I think in the context of the issues raised, practically, that’s the process through.

We do not support the tabled amendment in regards to clause 7(b), and to be honest—I’ll cut to the chase—clause 7(a) and clause 9 as well, but in regards to clause 7(b) specifically, we don’t for the reasons outlined.

The counterfactual to Dr Lawrence Xu-Nan’s points around access to justice: well, the reality is that by not increasing the threshold from $30,000 to $60,000, the assessment is that there is potentially about 2,000 claims that would not have access to justice. The benefit of increasing the threshold means that more New Zealanders have access to justice, and the counterfactual of not increasing it means that those people would not. I think, irrespective of position, more people having access to low- and affordable-cost justice is a position that we want to be in.

The Hon Dr Duncan Webb’s tabled amendment inserting new section 50A is ruled out of order as being outside the scope of the bill.

The Hon Dr Duncan Webb’s tabled amendment inserting new subsection (6A) in section 18 is ruled out of order as being outside the scope of the bill.

Part 1 agreed to.

Part 2 Amendments to other enactments