HONE HARAWIRA (Māori Party—Te Tai Tokerau) Link to this
Tēnā koe, Mr Assistant Speaker, tēnā tātou te Whare. I understand that the object of this bill is to make the Arbitration Act work better, to make it easier for people to use arbitration to resolve disputes. As a member of the Māori Party I am glad to say that, at first glance at least, the bill seems to have some significant advantages over the current Act. One of those is in the area of consumer protection, where until now, consumer protection guarantees could take effect only when both the consumer and the business agreed to it. The bill now enables parties in dispute to appoint an arbitrator, and that cannot be a bad idea. Then there is the matter of confidentiality, where the bill now allows all information to be kept confidential unless decided by a court order or by agreement. A big plus from our point of view is that without the formal direction of court protocols, arbitration can allow for the greater recognition and use of tikanga Māori in dispute resolution processes. So that is a good start from our point of view.
But in order to see whether the legislation may work, we need to look back at the Māori experience with regard to arbitration, which, in fact, has been experienced by Māori ever since the signing of the nation’s foundation document, the Treaty of Waitangi. Given the location of this debate and, indeed, Parliament itself, it is appropriate that we look at Wai 145, Te Whanga-nui-a-Tara me ōna Taki report, for a context of Crown-Māori experiences of arbitration. That story begins in August 1840, with arbitration between the New Zealand Company and those purporting to represent Port Nicholson Māori. The case involved a dispute between the land claims commissioner of that time, Mr Spain, and Māori of Port Nicholson. Commissioner Spain, it seems, was anxious to finish a land inquiry under the terms of the Land Claims Ordinance of 1841, so he recommended that Māori simply be paid—and I quote, and I would like everybody to take note of this one—“the amount of compensation that I may declare them entitled to receive”.
So naturally, in contemporary times the Wellington Tenths Trust said that the Crown had favoured settlers over Māori in connection with land disputes at Port Nicholson. And just as unsurprisingly, the Waitangi Tribunal found that the Crown had imposed an arbitration regime that was intended to extinguish any Māori claims to title without an inquiry into whether a valid sale had occurred. The Waitangi Tribunal further found that the Crown had breached Treaty principles by, one, failing to properly consult with Māori before switching from the inquiry to a form of arbitration, two, using an arbitration process without Māori’s informed consent, and, three, failing to ensure a fair process was used by the arbitrator. That culminated in the view that Māori were ripped off by the arbitration proceedings.
I know that other parties do not always appreciate the Māori Party’s passion for mentioning past New Zealand experiences as a way of helping us to understand where we may be headed in the future, so I thought I would throw in a comment from the Spanish author of Reason in Common Sense, George Santayana, who gave us that great quote: “Those who cannot learn from history are doomed to repeat it.” In the Māori world we have many such sayings that remind us that we know our future because we understand our past. In other words, we learn by experience. Me titiro whakamuri kia mārama ai te haere ō mua. “Look back to the past and get a clear vision for the future.”
Our brief look into that snapshot of the history of Te Whanga-nui-a-Tara—and there are many, many other such examples in Aotearoa—teaches us to be wary of any traps we may encounter in arbitration today. Arbitration is supposed to be about resolving disputes by common agreement. That means, of course, that both parties should also have the opportunity to properly determine the rules for that arbitration. But if Māori have learnt anything from the Port Nicholson experience, it is that regardless of the promise, history has proven that arbitration is often driven by one party, and disputes, far from being resolved, end up being magnified. We also know that of the 1,274 unfiled disputes noted in the Ministry of Justice’s 2004 report, arbitration was used in only 6 percent of the cases. Such is the background that sets the stage for creating new processes to make arbitration work.
Because of the wisdom that comes from that experience, the Māori Party intends to introduce an amendment to this bill specifically to deal with any disputes over Māori land, which we believe should be dealt with in the Māori Land Court rather than by arbitration. There are already precedents for moving Māori land disputes out of the general courts, and I cite issues arising from both the Fencing Act and the Property Law Act. We know that arbitration is sometimes used by Māori to deal with lease rental disputes on Māori land, but we believe that the Māori Land Court will deal far more effectively with Māori land disputes in a more user-friendly way, because of the court’s awareness of tikanga Māori and how that tikanga affects Māori attitudes towards land. The current process is weighed down by having too many lawyers involved and by the cost of having to bring in hotshot arbitrators, both of which make it a decidedly Māori-unfriendly process. What we want to do with our amendment is simply refer to the Māori Land Court any proposed arbitration matter involving Māori land or general land owned by Māori as defined in Te Ture Whenua Maori Act of 1993.
Despite the low uptake of arbitration, and despite the tragic history of arbitration processes being determined by the Crown without consultation with Māori and without their informed consent, the Māori Party remains, perhaps foolishly, optimistic that all things being equal, arbitration may just be a very effective dispute resolution process. This bill will let the parties decide whether arbitration is the most appropriate form of dispute resolution, and, when determining the best forum, the parties can still, if they wish, refer the dispute to the disputes tribunal. So we are pleased to see that options are available, and that both parties are equal partners in determining arbitration. The precedent established by Wai 145, Te Whanga-nui-a-Tara claim, reminds us of a situation where the Crown failed to put in place a fair process for arbitration, failed to consult over the terms of arbitration, and failed to determine whether arbitration was even acceptable to Māori. Where that happens an injustice arises, and society carries the cost of that injustice until such time as it is properly resolved.
So we move forward on this bill, having been clearly forewarned. We look forward to the varied experience of Māori litigants, claimants, mediators, judges, lawyers, and others who will help to refine the bill through the select committee process. The bottom line for everyone must be that if this bill helps to reduce the number of disputes that go before the courts and the cost of that exercise, then it has to have been successful. We will support the Arbitration Amendment Bill being referred through to the select committee, with a cautionary endorsement from Santayana that those who do not learn from history will, indeed, be doomed to repeat it. Kia ora.
NICKY WAGNER (National) Link to this
The Arbitration Amendment Bill is designed to improve the operation of the Arbitration Act 1996. Arbitration is an effective method of dispute resolution, which involves the settlement of a dispute by an independent person appointed mutually by conflicting parties. The use of arbitration has increased markedly over recent years, and although there are no statistics on the total number of arbitrations, the number of defended civil cases filed in the High Court dropped by 40 percent between 1999 and 2003. This would seem to indicate that parties prefer arbitration before proceedings reach court, and anecdotal evidence tells us that the cost and the speed of arbitration are attractive.
The amendments in this bill are designed to encourage further the use of arbitration as a means to resolve disputes privately in New Zealand. National fully supports this aim and the use of arbitration as a means to streamline and manage the cost and timeliness of dispute resolution in civil proceedings. The use of arbitrators who have technical skills or qualifications adds another valuable facet to this method of dispute resolution.
The bill’s amendments to the Act are based on the recommendations made by the New Zealand Law Commission’s report of 2003. Although in that report the Law Commission concluded that the 1996 Act was generally working well, several problems were identified that, if addressed, could significantly improve the operation of the law. As most arbitration is for private commercial or contractual disputes, confidentiality is considered to be one of arbitration’s major attractions. But the Law Commission identified two issues concerning confidentiality—the default rule and the open justice issue—that the commission recommended should be refined.
The default rule is concerned with the original section 14 of the 1996 Act. Under the Act, all arbitral proceedings are closed and confidential but for two exceptions. The first exception is where the parties otherwise agree. The second exception permits disclosure of such information to a professional or other adviser of any party if the publication, disclosure, or communication is contemplated by the Act.
These present exceptions are very narrow and do not permit disclosure of information to interested parties—for example, a professional or other adviser of one of the parties—disclosures required by law or by a competent regulatory body but not contemplated by the 1996 Act, or disclosures for other legitimate reasons, such as the filing and prosecution of any application to a District Court or to the High Court. The Law Commission considered the clause “if the publication, disclosure, or communication is contemplated by the Act” to be unduly vague and it required clarification—a task for the select committee.
The open justice issue concerns the idea that confidential provisions should not extend to proceedings outside the arbitration process and, in particular, to subsequent court proceedings. The bill clarifies that as a general rule arbitral proceedings are private and confidential, while court proceedings are to be conducted in public. But exceptions may occur and applications could be made to the court. This is another area that needs select committee scrutiny, as it is important that we find the right balance between party autonomy and open justice.
Finally, another area that needs close scrutiny involves the provisions for selecting an arbitrator in cases of conflict between the parties, as confidence in the arbitrator selected is fundamental to the process. National supports this bill in its attempt to improve the 1996 Act and as a first step in the process to find the most cost-effective and efficient way to resolve disputes. Thank you.