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Chapman Tripp predicts increase in cross-border disputes

05 April 2017

Chapman Tripp says a changing world trading order will see greater numbers of international disputes in 2017, with New Zealand cases testing the boundaries between international and domestic law.

The law firm has released Dispute resolution in New Zealand: Trends and insights, which looks at New Zealand dispute resolution in 2017.

It says there is a risk of increasing friction as the private sector, which increasingly relies on seamless global supply chains, is forced to adapt to the new status quo.

"We expect this will give rise to more contract, insurance and insolvency disputes and litigation testing the machinery of cross-border dispute resolution - the enforceability of dispute resolution clauses, disputes over jurisdiction, attempts to obtain evidence in support of foreign proceedings and to enforce foreign judgments or artibtral awards against assets in New Zealand."

Other trends which the firm identifies include:

Increasingly proactive regulatory intervention: The firm notes that recent judicial statements indicate some concern with the penalty levels being required by the Commerce Commission to achieve settlements - meaning that a contested penalty hearing should remain a real alternative to, and constraint on, any negotiations with the Commission.

Practical implementation of the new health and safety regime: Prosecutions brought by WorkSafe in 2017 are expected to give businesses a better indication of the approach WorkSafe and the courts will take to the question of breach and the level of sanctions.

The continuing evolution and popularity of mediation and arbitration as an alternative to litigation: An increasing trend towards statutes making use of ADR is noted, although Chapman Tripp says that ironically increased use of ADR is likely to lead to increased litigation to determine the precise working of these laws.

Continuing attempts to expand third party liability for commercial claims: Recent appeal cases have opened the door to a product liability theory by which manufacturers can be held liable to third parties despite contractual limitations in their contracts of supply to customers.

Ongoing exploration of the use of class actions and third party funding: While class actions and third party funding mechanisms have the potential to significantly improve access to justice, change in this area so far has been fairly modest and incremental, Chapman Tripp says. "We expect that will change, given their increasing adoption and regulation in comparable jurisdictions such as the United Kingdom, Singapore and Australia."

Bedding-in of judicature modernisation reforms, such as specialist commercial panels of judges, and the increasing use of electronic documents throughout the court system.

More insolvency litigation as interest rates rise or global uncertainties leach into the New Zealand economy: A possible faster-than-expected economic slow-down making credit harder to access could mean increased informal workouts, insolvencies and/or debt recoveries.

A continuing volume of insurance cases arising from major natural disasters: Further litigation is expected from Christchurch around the relationship between the obligations of EQC and those of private insurers.

Public law actions arising out of the 2017 election and through increased resort to judicial review to challenge public decisions with commercial dimensions. "Every election year public and administrative law principles get tested".

Last updated on the 16th September 2019