I move, That the Disputes Tribunals Amendment Bill be now read a first time. At the appropriate time, I intend to move that the Disputes Tribunals Amendment Bill be referred to the Justice and Electoral Committee for consideration, and that the committee report finally to the House on or before 31 May 2009, and that the committee have authority to meet at any time while the House is sitting except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).
This bill fulfils part of the small-business relief package announced by the Prime Minister on 4 February this year by expanding the jurisdiction of a disputes tribunal to reduce the amount of time small businesses are tied up in District Court battles. The Government is very keen to smooth the way for these businesses, so we will encourage the use of the disputes tribunal, which provides a simple, cost-effective, and fast forum for resolving small civil disputes. The tribunal provides access to justice for New Zealanders through a more conciliatory approach to justice, rather than the traditional adversarial court system.
The Disputes Tribunals Amendment Bill will increase the maximum claim levels of the disputes tribunal. The current maximum claim levels are $7,500, or $12,000 where both parties agree, but these were last reviewed by the previous National Government in 1998. This bill will increase these levels to $15,000, or $20,000 where both parties agree. This will improve access to the disputes tribunal for individuals and small businesses, reducing costs for up to 3,600 additional cases annually. Many of these cases would currently be dealt with in the District Court, with its higher associated costs, including the cost of legal representation. The reduced costs for these cases will be more proportionate to the value of their claim than if they had been dealt with by the District Court. This increase in the maximum claim levels will therefore free up valuable time and money for small businesses and individuals.
The decade or more that it has taken to increase maximum claim levels of the disputes tribunal has increased the gap between cases that can be taken to the disputes tribunal and those that are financially viable to be taken to the District Court. In other words, this bill will improve access to justice for individuals and businesses pursuing cases that would otherwise have fallen through the cracks. Part 1 of this bill amends the Disputes Tribunals Act 1988 to reflect the increased maximum claim levels. Part 2 contains a number of consequential amendments to reflect the change in statutes that confer jurisdiction on the disputes tribunal.
I ask that the Justice and Electoral Committee consider this bill in a shortened period of time, to allow the new maximum claim level to be implemented quickly, thereby assisting small businesses across the country to resolve their disputes during the tougher economic climate we now face. We need to lighten the load on small and medium sized businesses so they can get on with the business of producing goods and services. Expanding the jurisdiction of the tribunal also fulfils National’s election promise to increase the jurisdiction of disputes tribunals to reduce pressure on District Courts. This increase in jurisdiction levels is a first step, and we do not rule out making further increases to the threshold. I commend this bill to the House.
I think it is fair to say that New Zealand has a long history of dispute resolution that is freed from the rigours of the rules of evidence and from the formalities of the rules of common law. Labour sees the Disputes Tribunals Amendment Bill, which increases both the default and the by-agreement jurisdictions of the disputes tribunal, as a logical extension of that history. We will support the bill going to the Justice and Electoral Committee, where our members on that committee will listen carefully to the evidence to determine what our final position on the legislation ought to be.
I referred in my introductory remarks to the long history this country has of these forms of dispute resolution. I respectfully refer the House to Peter Spiller’s excellent book on disputes tribunals in New Zealand, because the history is well set out there.
It is nice to see Dr Worth in the Chamber. I say “Namaste, sir!” to him.
I note that the Supreme Court was established in New Zealand in 1841. It heard the important cases—the big cases—of high monetary jurisdiction, but it did so according to the rules of evidence in the English courts. As early as in 1844 the legislature of New Zealand set up another body called the Courts of Request. They were set up to hear claims for the easier and speedier recovery of small debts. Lawyers and advocates were not permitted to appear in these courts, and their decisions were final, in respect of law and fact. Then, in 1846, Resident Magistrates’ Courts were established for the simpler and speedier administration of justice. They were required to give judgments according to the concept of equity and good conscience. The Courts of Request were abolished in 1858, and the Resident Magistrates’ Courts were renamed the Magistrates’ Courts after 1893. They became the only redress for dealing with small claims.
The lawyers in the House will know that the equity and good conscience jurisdiction remains in the District Courts, which is what the Magistrates’ Courts became after the Beattie commission in 1981. It is interesting to note that the jurisdiction continues in other fora, such as the Employment Relations Authority and the Employment Court. It is intended to allow the courts to hear the claims of a litigant according to their moral and equitable rights without the application of the rigours of the rules of evidence.
Spiller records in his book that by the 1970s there were doubts about the Magistrates’ Courts’ ability to do justice in cases of small claims. He identifies four reasons for this: first, representation by lawyers was costly; second, laypeople felt overwhelmed by the legal process; third, adversarial processes were unsuitable for the settlement of small claims; and, fourth, the equity provision was at the discretion of the presiding magistrate. These concerns coincided with general desires in the community for the promotion of better access to justice. It is no accident that the citizens advice bureaux and the community law centres in their current form date back to this time.
Legislators in this Parliament looked abroad for examples of other low-level tribunals. There were the North American small claims or small debts courts, which existed in Canada and the United States from the early decades of the 20th century. In this part of the world, Queensland, then Victoria, then the other Australian states and territories led the way. At the 1972 election, Labour, in its manifesto, promised to give favourable consideration to the setting up of small claims courts after having studied similar projects in other countries.
In 1975 Labour’s Attorney-General, Dr Martyn Finlay, introduced a small claims tribunal bill. The legislation passed into law in 1976. The first referees were appointed on 3 June 1977 in Christchurch, New Plymouth, and Rotorua. The original jurisdiction of the tribunal was $500. From 1980 the tribunals were established elsewhere, and by October 1985 they existed in 36 centres. The $500 limit was raised to $1,000 in 1985 by Labour’s next Attorney-General, Geoffrey Palmer, who also reformed and updated the system significantly via the Disputes Tribunals Act 1988. The jurisdiction was extended, and this included raising the monetary limits to $3,000 by right, and $5,000 by consent—the first time that an as-of-right versus by-agreement dichotomy was introduced into the system.
As the Minister in charge of the bill, Simon Power, said, legislation in 1998 and 1999 raised the monetary limit to the presently applicable levels—$7,500 as of right and $12,000 by consent. I think it is correct to say that, at that time, credit contract and hire purchase claims were also included in the jurisdiction of the tribunals. By 2003, 54 referees were stationed around New Zealand, servicing 59 centres. The current bill is designed to extend the jurisdiction of the disputes tribunals from $7,500 by right, or $12,000 with the consent of the parties, to $15,000 or $20,000, respectively. There are consequential amendments to the Consumer Guarantees Act, the Credit Contracts and Consumer Finance Act, the Fair Trading Act, the Fencing Act, the Minors’ Contracts Act, and the Retirement Villages Act.
I said in my introductory remarks that Labour would support the introduction of this legislation and its referral to a select committee. We do so because of our proud tradition in this area. As I have shown, it was a Labour Attorney-General, Finlay, who first introduced the legislation setting up small claims tribunals, and it was his successor, Palmer, who introduced the legislation transforming them into their current form—the disputes tribunals.
It is clearly sensible to continue to update the jurisdiction of a tribunal, but I ask the Minister to consider the following matters as members on this side of the House consider their position on the bill. If we are going to be amending legislation such as the Consumer Guarantees Act and the Credit Contracts and Consumer Finance Act, why not look at inserting provisions in that legislation that, for example, would regulate the imposing of usurious interest by pay-day lenders? I have signalled I think that ought to be done by this Parliament, and I will seek to do it by a member’s bill if there is no other such legislation before the House. And why should we not think about an unlimited upper limit on the jurisdiction of the tribunals if the parties so agree? What is wrong with parties agreeing to seek access to justice in an informal forum like this, and agreeing—provided that the agreement is made by informed consent—that there should not be an upper limit on the monetary claim? Why should we not be able to do away with lawyers altogether, in that sort of situation?
I can see by the Minister’s smile that he will consider this seriously. [ Interruption] If I could just be heard over the rabble opposite, I will ask the Minister why we should not solidify the promises that have been made to community law centres as to funding this year. Why should we not announce a solution going forward, given the hard times that New Zealand is going into, and given that many low-income earners with claims of over $15,000 will be forced to use the ordinary courts, because they will not be able to get agreement from the other side that $20,000 ought to be the limit? Those low-income earners will have to use legal aid and have recourse to community law centres, at a time when the funding of those centres remains uncertain despite the undertakings that have been given to date by the Government.
So Labour members on the select committee will be looking for solutions to the matters I have just raised, but, as I have said, we will support sending the legislation to the select committee because, on its face, it addresses an important issue—the updating of the jurisdiction of the tribunals, which should happen. We should always keep the monetary levels of jurisdiction of our courts and tribunals under review as circumstances change. But there are important issues as to consumer protection and access to justice that remain unaddressed by this legislation and that must be faced at some point by this Parliament.
I rise in support of the Disputes Tribunal Amendment Bill, of course. It is interesting to note the words of the previous speaker, Charles Chauvel. It is a bit of a worry for me that he made so much sense I found myself agreeing with him, so maybe I should change my point of view! But a number of the points he made are very valid, and one of them is the need to continually reflect on the tariffs and tenures of the various courts and tribunals we operate in. The disputes tribunals are ones that allow easy access to justice, because people are allowed to come before the tribunals without the presence of lawyers. It is not that lawyers are all bad; it is just that most lawyers are quite expensive. So a couple of parties that have a dispute are allowed to argue that dispute in front of an adjudicator, and one of the rules, of course, is that there is no legal counsel in the room as those parties argue before the adjudicator. The only real contest is that there must be a dispute.
The tribunal is not a facility, for instance, for the collection of bad debts. It is not somewhere a person can go to obtain a summary judgment on the fact that money has not been paid or that money is owed. There must be a dispute to put before the tribunal. Obviously, the use of the tribunal comes at a very low cost. I think that for the sum of $40 an action can be started. A person can go to the court and fill out the forms in triplicate. The forms are then served on the other party, and the parties end up with their day in court. But over time the upper threshold has been so low that any real dispute that is causing angst has not been able to find its place for a hearing within the disputes tribunal process. If that ceiling is too low, people are forced to go before the District Court and all of a sudden one tends to find an inequity of arms. The person with the dispute—for instance, against the house builder, the garage mechanic, or the provider of goods and services—has far less financial grunt than the person on the other side of the contest, and before the District Court the business owner usually has access to counsel. The person in dispute does not have access to legal aid for that particular argument, and its cost and charges can then be put over his or her house property, for instance, in recognition of the cost of legal aid at that time.
The cost of the dispute before the court may well be taken against the person on the sale of that property some years down the track. So it is good to see that the Government is taking the opportunity here to raise the ceiling to $15,000, or to $20,000 by consent of all parties. The point made by the previous speaker was that maybe there should be no lid or ceiling on it. The problem with that would be, I guess, the skill level, the history, or the legal experience of the adjudicator. For instance, if the sum was $150,000, then some serious jurisprudence might be made there, and that is a bit of a concern for the people who would look at the adjudicator and ask where the skill base was and whether it was appropriate to have a person not legally qualified and judicially recognised sitting on a case involving those sorts of figures.
Disputes tribunals provide cheap, simple, and fast access to justice. In Hāwera, where I live, people who have filed papers in the local court can appear before the disputes tribunal within a couple of months. That is very speedy justice when compared with appearing in a courthouse, and, as I said earlier, the filing fees are significantly lower. Therefore, raising the ceiling will close the gap between claims that fall within the jurisdiction of the disputes tribunal and claims that are financially viable to bring before the District Court. I guess it would be fair to say that even a relatively straightforward dispute before the District Court could cost someone in the vicinity of $8,000 to $10,000, and that would be seen as relatively cheap, comparatively. If there was a $15,000 debt a person could spend a heck of a lot of whatever satisfaction that person may have received, on trying to satisfy legal costs. Whatever costs are awarded through the District Court are never sufficient to meet the actual bill sent by legal counsel.
National campaigned quite heavily in the area of raising the ceiling in respect of disputes tribunals, so it was obviously something that anyone working within the justice system had recognised as being needed for quite some time. There is significant backing for this move, right across the justice system. National is working to increase the cash flow and make the enforcement of debts easier for small and medium sized businesses. We often find the ability within the disputes tribunal mechanism for businesses to be able to enforce a debt that is in dispute, as well as the means by which a dissatisfied customer can exercise his or her right to argue the dispute in front of an adjudicator.
This legislation has been required for some time. Access to justice in this country frequently boils down to access to the financial wherewithal to be able to bring a cause of action. It is very important, in the interests of justice, that access to an adjudicator and to justice is provided as cheaply and speedily as possible. It is interesting to note that the previous Government did not increase the jurisdiction during its entire 9-year term, and the last increase was made by a National Government in 1998, just a year before it left office. It is a shame that the previous Government did not see as a priority the need to have a check and to see how things were progressing. For instance, we can look at the rate of inflation over time and see that that ceiling is creeping down all the time. As we are now moving into a time of recession, it is important to note that there has to be a way to bring these matters before an adjudicator quite quickly.
A former colleague of mine who works in the document service business in South Taranaki has brought to my attention the fact that in 1999 he served 90 default notices, and through to August 2005 that number had grown to 247. If we looked at last year, we could see that the number was well over 350. That means that more and more people have been enticed into debt, and although the disputes tribunal is not a mechanism for satisfying unpaid debts, where a dispute arises there is a real need for people to be able to come before an arbitrator to state their case, to do it cheaply, and to do it in a timely fashion. Thank you, Mr Assistant Speaker.
I rise to concur with the previous speaker from the Government, Chester Borrows. Labour has some areas about which we would like to see further questions raised by the select committee, but we are happy for the Disputes Tribunals Amendment Bill to be considered by the select committee. My colleague Charles Chauvel raised some very good points in his speech. I will not dwell on them, but I have some additional questions that I think it would be useful for the select committee to consider.
The disputes tribunal, as it currently stands, was established in 1988, and it has come to be regarded as a well-respected body and one that serves a very important purpose in New Zealand’s legal system. Two of the aspects that make the disputes tribunal such a well-respected body are, first, its accessibility and, second, that it contributes to our overall status as not being an overly litigious society, which is an important point and a situation that I think we would wish to preserve in New Zealand.
What differentiates the disputes tribunal from our other court processes? It is important to point out these differences, in order to test the suitability of the shifts in the claims levels that are being proposed in this bill. The first difference is that the referees’ decisions are based not on law but on the merits and justice of a case. That is an important point to make. The second difference is that the grounds for appeal are limited and can be met only if the proceedings were conducted in a prejudicial manner. I will go back to that point later in my speech. The third difference is that the disputes tribunal does not allow legal representation of parties. Again, this contributes to the fact that this regime is an accessible regime, not an overly litigious one. The fourth difference is that referees are not required to be legally qualified, although many of us will know that a large proportion of them are qualified. Finally, the proceedings are held in private and the discussions are not published, which I think contributes to the openness of the discussions that are had when two parties are going through the dispute process.
It is important to put a little bit of reality into this discussion and to start talking about the kinds of situations where the disputes tribunal is used. That will demonstrate to us the impact of these changes. The first point I make is that the tribunal is able to be used regardless of whether a party has put in writing or stipulated in a contract that no responsibility will be accepted or has explicitly said that a situation cannot go to a tribunal. That will not necessarily hold. This means that the disputes tribunal is always available to parties where they may fall under the criteria captured by the tribunal.
What are the criteria? The kinds of claims that can be made to a tribunal include if work has not been done properly if a person has contracted someone to conduct work on his or her house—and the amount charged for work done—and if goods purchased are not the ones asked for. These are all circumstances where everyday citizens who are going about their daily business may incur some kind of injustice that could be righted through the disputes tribunal.
The criteria also include damage to property and loss of property. Even if, for instance, someone lends something to his or her neighbour, this may be captured by the criteria. Hire purchase agreements or someone denying that he or she owes money when an account comes in for settlement are other areas that may be captured by the criteria. This is where the small-business aspects of the disputes tribunal come in, but it is important to remember that this bill has implications not just for small businesses but for private citizens. We have to keep that in mind when we are looking at quite a substantial shift in the claim levels. It is a reasonable leap to go from $7,500 to $15,000 if we are talking about private citizens, and from $12,000 to $20,000 where there is at least some agreement around that amount. Also, there are areas where it is quite explicit that the tribunal cannot traverse.
One of the things we should keep in mind when this bill goes to the select committee is the disputes tribunal’s accessibility. Currently, a number of fees are set around going to the tribunal, but they are quite low—and for good reason. If a claim is for less than $1,000, the fee that a private citizen or a party is likely to incur is about $30. If the claim is for an amount of $7,500 or more, then the fee goes up to $100. We need to keep the accessibility of the disputes tribunal in mind. If we are going to take a leap of up to $20,000, is the Minister undertaking that that regime will stay the same? It is my hope that it would.
I would also like to cross-reference again the remarks made by my colleague Charles Chauvel about legal aid. Many private citizens may choose to seek advice from a community law centre when faced with a dispute, and we must consider the accessibility of those services when the maximum claim levels are ramped up. They are going to be lifted, and given that there is no right to have a lawyer in the tribunal when a case is heard, it may be advisable that the citizens have some kind of legal advice if the claim levels are going to be lifted so heavily.
I will reiterate the reason why that is particularly important. In the disputes tribunal, the grounds for appeal are extremely limited. One can, for instance, make an appeal only if one believes that the proceedings were conducted in a prejudicial manner. It is the process one can dispute but not necessarily the outcome. That is particularly important if we are considering private citizens accessing this procedure and a maximum claim amount of $20,000. That is not an insignificant amount for a private citizen.
Generally, we have seen that these amounts that have been set down where the disputes tribunal does have jurisdiction have been suitable. They have been fitting to the types of cases that have gone through the tribunal. It will be up to the select committee to consider in more detail whether an amount of $15,000 or $20,000 will attract the same types of suitable cases, or whether we might be going beyond the realms of what cases we previously considered the disputes tribunal should be considering.
Why is it important to make sure the cases are relevant? It is important not only because the grounds for appeal are limited but also because if a person has a limited right to appeal, the consequences of a ruling are significant. If, for instance, a distress warrant is issued to a bailiff or a collections officer, then those officers can come to a person’s property and demand full payment, if a ruling has been made against that person. They may seize personal possessions—and rightly so if a ruling has been made against that person—but if there is a lack of money or assets, the creditor can then apply to the courts to start bankruptcy proceedings.
That may not be a situation we would see frequently when we are talking about claims around the $7,500 mark, but at the $20,000 mark, and with a significantly larger number of cases being taken to the tribunal, as the Minister has talked about, we may very well see that occurrence happening more often. The select committee should consider that situation. Perhaps the select committee would like to question officials on the proportion of current cases where that situation arises, and whether that is a favourable outcome. The select committee must consider what both the Government and the select committee would wish to achieve in a regime that allows very little right for appeal and has very strong consequences for those who are involved and who have very little legal representation at the time.
Given all those things, it is still important to consider the merits of continuing to ensure a balance between having an accessible system and avoiding excessively litigious processes in our justice system. That balance is something we should continue to defend. It is something we have seen undermined in this House up until now, particularly in the first 100 days of the current Government. We have always, particularly when Labour was in Government, strived to ensure that workers’ rights were intrinsically included in legislation and were not something that had to be established through testing of the courts. We have had measures like the 90-day bill and the cancellation of pay equity, and we have the potential privatisation of accident compensation. We have already seen in Australia that experiment leading to a significantly larger number of cases being disputed directly with private insurance companies. In the United States model, one would have no right to dispute any single case in that situation.
We must continue to ensure that New Zealand does not become a litigious society. We have not seen that approach to date with the policies brought forward by the National Government, which wants to see everything tested through the courts. I look forward to the select committee striking the balance between accessibility and assessing the merits of an individual case. Thank you.
The Green Party is happy to support the referral of the Disputes Tribunals Amendment Bill to the select committee. We find the rationale for the bill to be entirely fair and reasonable, given the fact that the levels for claims were set over 10 years ago. We do have some interest in noting the three different options that are set out in the explanatory note of the bill. It will be our intent to pursue those further, and other concerns as well, in the select committee. But it is sufficient for the moment just to affirm that the Green Party supports the bill’s referral to the select committee, and we will look forward to pursuing it there. Thank you.
I rise to speak to this first reading of the Disputes Tribunals Amendment Bill on behalf of the ACT Party. It is pleasing to see that this very sensible bill has good cross-party support in the House. The ACT Party endorses the comments of just about every speaker to date. The disputes tribunal operates as a cheap and effective means of redress for disputes, such as consumer-to-business disputes, business-to-business disputes, or person-to-person disputes, such as neighbouring fence issues and the like.
Under the Disputes Tribunals Act referees are able to consider the merits of a case in reaching a decision. That is one of the advantages of using the disputes tribunal—the referees are not obliged to follow the letter of the law if doing so would, for instance, result in a perverse judgment outcome.
As we have heard from other speakers, disputes heard by the disputes tribunal are currently limited to the amount of $7,500, but disputes up to the level of $12,000 may be heard if both parties consent. This piece of legislation allows for the lifting of the level of claims to $15,000, or to $20,000 with the agreement of both parties. That is a very sensible and pleasing move that, as I said, the ACT Party is pleased to support.
The move is part of the Government’s small-business relief package, and the ACT Party fully supports that, as we have made very clear. It is aimed at improving the business environment by reducing the impact of taxes on firms’ cash flows by improving firms’ access to credit and reducing business compliance costs.
The decision to increase the financial limit is also good news for consumers, and it is important that we consider their rights. Community law centres and groups such as Consumer New Zealand and the Principal Disputes Referee have suggested for some time that the current limit is inadequate and should be raised. The limit is currently resulting in consumers and small businesses missing out on access to redress as many claims are valued higher than the limit, and many consumers and small businesses are not in a position to take those claims to the District Court, as they would have to do if the disputes tribunal did not exist. The Small Business Advisory Group and the Arbitrators and Mediators Institute have also advocated for a much higher limit. So it is good to see good general support for this move. In fact, I would have been supportive of raising the level even higher so that many other cases would not have to go through the court process and through the legal system.
The principal referee of the disputes tribunal, Dr Peter Spiller has had quite a lot to say about this. He said he has directly communicated to the Ministry of Consumer Affairs that he strongly supports a large increase in the limit, and I think he has raised some very good points. Dr Spiller considers that the value of the limit has been undermined by inflation and rising court costs and that these have not been taken into consideration as the limits have stayed put.
There is a growing gap between the upper limit and the point at which it is financially feasible to take cases to the District Court. Dr Spiller has also advised that, increasingly, claimants are actually having to abandon part of their claims to bring them within the jurisdiction of the disputes tribunal, as they cannot afford to take their claims elsewhere.
Before the bill goes to the select committee and is considered by the members of that committee, there is one other issue that I would like to raise here, and I have written a letter to the Minister of Justice in this vein. Publication of decisions of interest from the disputes tribunal currently is not allowed. I would like the select committee to at least consider that point. The representatives of community law centres have expressed a view that there should be publication of these decisions. They note that the majority of consumer disputes with traders are taken to the disputes tribunal rather than being resolved by other means—for example, through the courts. Currently, the proceedings are private, and, as a result, it is difficult for the community law centres and other groups to show to those who use their services examples of how cases have been successfully resolved and how cases might best be approached. These representatives have said they do not necessarily need the publication of all decisions; instead they suggest that the Principal Disputes Referee could perhaps be given the ability to describe cases that are of interest and have their basis in consumer legislation. I think that is a very valid point. This would generally affect cases involving the Credit Contracts and Consumer Finance Act, the Credit (Repossession) Act, the Consumer Guarantees Act, and the Fair Trading Act.
Consumer problems are the most common type of legal problem faced by New Zealanders, and the disputes tribunal is the primary forum for hearing consumer grievances. So I think that it is a valid point to raise at this time. I would like the select committee to consider this, and I have also written to the Minister of Justice in this vein.
I have asked the Minister of Justice to consider making a direction under section 57 of the Disputes Tribunals Act, and he is very is reasonable. I am sure he is taking that into consideration. I have asked him to consider making a direction under section 57 asking the Principal Disputes Referee to periodically publish reports of cases that he considers would provide useful information to consumers, traders, and the general public.
As I have already made very plain, the ACT Party supports the Disputes Tribunals Amendment Bill. We strongly support raising the disputes tribunal monetary limit to a higher sum. In fact we would have been happy to look at a higher level—
Well, we look forward to that. We strongly support raising the disputes tribunal monetary limit to a higher sum, as it will help satisfy those issues and will allow greater access for consumers to a cheap and expert disputes resolution forum.
It is good to take a call on the Disputes Tribunals Amendment Bill. I do not feel too bad about taking the call off Lynne Pillay as I am sure we will be saying very similar things and both making good points about this bill. It is a very small bill of about two or three pages, so I am sure that the Minister in charge of the bill, Simon Power, wants me to speak equally briefly and efficiently. The bill contains a powerful idea, and that is access to justice and the gap between—
As I say, great minds think alike. The problem is the gap between where we, as citizens, are able to go to the disputes tribunal—currently for claims of up to $7,500 without consent—and where it is feasible and economic to go to the District Court. As we all know, this bill expands the jurisdiction of the disputes tribunal. Of course, as a lawyer, and having talked to many lawyers over the years, I can say that something that people and lawyers have been particularly concerned about in the past has been quality issues in the disputes tribunal. Lawyers used to say flippantly that one could flip a coin to see how a case would go, but that is no longer the case. Peter Spiller, the Principal Disputes Referee, has done an excellent job tidying up the disputes tribunal’s act, and there is considerably more certainty there now.
I do not think that we should overestimate the extent to which even in court cases there is a large amount of uncertainty in the process, even in the best of cases. I remember a Queen’s Counsel once saying to me that even if the case is 100 percent watertight on paper, one still only has a 70 to 75 percent chance of winning the case. Even in court cases, certainty can be overrated, and it is good that we have now a District Court where quality issues are being addressed; it does a good job.
The threshold, as I say, has been lifted. Frankly, we have a situation in New Zealand at the current time where any lawyer worth his or her salt who is advising a client would be very clear to the client that for a dispute of any amount less than $30,000—some would say more than that—going to court is decidedly uneconomic. The uncharitable might say that part of that is because lawyers complicate matters through discovery, through pleadings, and so on, but, as I say, there is a gap between where the disputes tribunal finishes and where it is feasible and economically viable to go to court. So for that reason alone it is very good, indeed, that we are raising that barrier. I thank you, Mr Assistant Speaker, for your wise choice in letting me take the call.
It is a pleasure to stand and take a call on the Disputes Tribunals Amendment Bill. I am sure members have heard from my colleagues that Labour is supporting this bill going to the select committee. I think it is very important for the public to come and have a say on this bill. It is certainly quite a simple bill, as Simon Power—not Simon Power; he is sitting over there—as Simon—
Simon Bridges. There is a Simon thing in the National Party. As Simon Bridges said, it is—
It is very hard. It is the Simple Simon approach to bills in this House. This bill is actually quite simple, yet still quite complex in what it does. It raises the maximum claim levels of the disputes tribunal from $7,500 or $12,000, to $15,000 or $20,000 respectively. That has to be with the consent of both parties. I think that is really relevant to this bill. The change is with consent, it is a common-sense way, and—as members opposite have said—it is about access to justice. The bill provides a way whereby, instead of going through the full court process, there is, by consent, access to justice to address these issues.
If we look at when the disputes tribunal amounts were last set, we see that it was in 1988. At that time, as I said before, they were $7,500 or $12,000. Since 1988 there has been considerable movement in terms of inflation and in terms of the costs. I have to be quite honest here in terms of the costs of access to justice, in terms of people looking at a dispute that may not be huge, and in terms of looking at what the remedy would be—what the solution is—versus what the cost would be if they were to engage legal assistance. I note that even though through the disputes tribunal the vast majority of cases use referees—people who are legally qualified—there is no actual requirement to do that. I think that is very important. It means that if people do not have funds to remedy what may be deemed a minor dispute in monetary terms, they will have access to that.
If we look at the original claim level of $7,500, we see that in this day and age that amount falls far short of the mark of a reasonable amount if one were engaging legal counsel. The bill increases that amount to $15,000 or an upper limit of $20,000, and that is certainly more realistic. The levels were last changed two decades ago and in that time there has been considerable movement. I see Mr Assistant Speaker acknowledging that fact.
Members on this side of the Chamber support the bill going to the select committee, and we think it is important for the public to have their say. In terms of the regulatory impact statement, we note that other consideration was given to alternative options. The first option was no increase to the maximum claim level at all but, as I said earlier, there was agreement that that would just retain the current inadequate situation and make no allowance whatsoever for inflation. As I said, there are rising costs associated with litigation, and there are a variety of reasons for that. In terms of access to justice, it is all about the viability of taking a case to the District Court for low-value claims. If it is not viable, because the legal costs outweigh the cost of what the remedy would be, then we see that justice is not served. So that first option was not seen as viable or sensible.
The second option would increase the maximum claim level to $25,000. That would allow the disputes tribunal still to be at a greater level to provide a cheaper and faster service, but it is my view, and the view of expert advice, that those protections would need to be strengthened, because of the amount of money at stake. I hasten to add that many people would not wish voluntarily to go through this system with those high stakes.
In terms of the bill, it is very sensible. I really look forward to the select committee having the opportunity to hear submissions, because it is something that many, many organisations and members of the public would wish to have a say on, and I commend the Government for that. Many times, more important bills have not had the opportunity to go to a select committee. I think that is very sad and I know that we can all recount a number of bills that have had quite detrimental—
Exactly! But it would seem now, in the next 100 days, or whatever, that there is more of a responsible approach being taken by the Government and more opportunity for the public to have their say. I, along with other parties in the House, am very pleased to stand in support of the bill going to the select committee so that the public can make submissions and have their say.
I know the time is short, but it is a very warm pleasure to hear Ms Pillay offer her commendation to us, and I respectfully and humbly accept that commendation.