At the Bar December 2012

At The Bar December 2012

Lucy Reed LinkedIn for Lawyers NZBA’s Wits Win Trophy at Quiz Night Clive Elliott Reports From Dublin

INSIDE THIS ISSUE Pg 2 - Call for New Zealand to Expand International Commercial Arbitration Work Pg 4 - Report on International Bar Association’s Annual Conference in Dublin

Call for New Zealand to Expand International Commercial Arbitration Work

By Catriona MacLennan

Pg 5 - London Declaration Pg 6 - Get up and Speak up Seminar Provides Advice for Young Advocates Pg 8 - NZBA Team Runner-Up at Legal Research Foundation’s Quiz Night Pg 9 - New Zealand Centre for Human Rights Law, Policy and Practice off to Flying Start Pg 10 - Xmas Function Photos Pg 11 - Law Commission’s Review of the Judicature Act Pg 12 - How Lawyers Can Make Use of LinkedIn Pg 13 - NZBA Expresses Access to Justice Concerns in Submission on Civil Fees Review

Lucy Reed, Daniel Kalderimis, Juliet Moses

Pg 14 - Criminal Procedure Changes Due to Take Effect Pg 15 - Use of Digital Dictation Technology for Barristers Pg 16 - Professional Indemnity Insurance Pg 16 - The Continued Impact of Disasters on the Insurance Market Pg 17 - New Members of the New Zealand Bar Association Pg 17 - Telecommunications Services for Businesses Pg 18 - Submissions Sought on Review of Joint and Several Liability

EDITOR CATRIONA MACLENNAN Tel: 0064 9 378 0964 Email: catmac@orcon.net.nz EDITORIAL COMMITTEE Clive Elliott Tel: 0064 9 309 1769 Email: elliott@shortlandchambers.co.nz Melissa Perkin Tel: 0064 9 303 4515 Email: melissa.perkin@nzbar.org.nz Design and layout by Kirsten McLeod Tel: 9 834 2224 NEW ZEALAND BAR ASSOCIATION Tel: 0064 9 303 4515 Fax: 0064 9 303 4516 Email: nzbar@nzbar.org.nz Web: www.nzbar.org.nz P O Box 631 Auckland 1140

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Petra Butler, Gerard Curry New Zealand had very good potential to develop a pool of international arbitrators over the next decade, said Freshfields Bruckhaus Deringer partner and international commercial arbitrator, Lucy Reed. Ms Reed is the global leader of Freshfields’ international arbitration group and was ranked as a top-tier international arbitration practitioner by Chambers USA 2011 and as a leading lawyer in international arbitration in The Legal 500 US 2011.

She visited New Zealand in November 2012 and sat down with At The Bar for a wide-ranging interview. Ms Reed said that she was impressed with the quality of the young New Zealand law graduates who had joined the international

diaspora. Freshfields had benefited from having some of them work for it and she had been extremely impressed with how well-educated and trained they were.

She expected that some of them would in future return to New Zealand and join others, such as barrister David Williams QC and Professor Campbell McLachlan QC, as leaders in international arbitration.

Ms Reed said that she sought out common law-trained, Englishspeaking, neutral arbitrators who were not from the United States or the United Kingdom and accordingly looked to New Zealand, Australia and Canada for suitable people.

“I’m really looking forward to having a bigger pool from New Zealand.

The basics are there. It’s just a matter of young New Zealand lawyers gaining the gravitas and experience to be selected.”

Ms Reed said that New Zealand was also well-placed to expand its involvement in the field because the use of arbitration was growing in Asia. She had relocated to Hong Kong earlier this year to drive expansion of Freshfields’ international commercial arbitration work in Asia. Ms Reed said that most lawyers specialising in international commercial arbitration were currently based in London, Paris, New York, Washington or Dubai but an increasing amount of

work was being generated in Asia.

Freshfields’ international commercial arbitration work focuses particularly on the energy and telecommunications sectors but the firm is also known for its work in investment treaty arbitration.

One of Ms Reed’s areas of focus is international arbitration involving South Korean public and private parties. Cases with which she has been involved include that of ConocoPhillips in its multi-billion dollar ICSID arbitration against Venezuela for confiscation of its investments, as well as a dispute involving an Asian government in ICC arbitrations relating to breaches of a share purchase agreement in the insurance sector. She also acted in the Republic of Turkey’s successful defence of three multi-billion dollar ICSID arbitrations brought under the Energy Charter Treaty by alleged investors in Turkish power generation projects.

Recent cases on which her group has worked include an arbitration relating to mining investments in Indonesia, a dispute involving a gas pipeline in the Middle East and a case brought by Chinese investors against Mongolia.

Ms Reed said that most parties in international arbitrations selected arbitration as the method for resolving their disputes because they did not trust the court systems in each other’s countries.

They also wanted the benefit of specialised judges who were familiar with commercial issues.

Ironically, however, she said that familiar criticisms made about courts were now also being heard about international arbitration.

These included that arbitration was expensive, that it was time-consuming and that it was becoming more discovery-laden than the court system.

Ms Reed said that investment treaties were a significant issue for New Zealand at present. This country had not traditionally been keen to agree to mandatory arbitration but the Trans-Pacific Partnership likely would require mandatory arbitration. She said that New Zealand at present had only three Free Trade Agreements with mandatory arbitration clauses, while the Netherlands had more than a hundred treaties mandating arbitration.

Australia had recently announced that it would not in future enter into treaties with mandatory arbitration. Ms Reed said that that had been a result of the dispute between the Australian Government and tobacco giant Philip Morris about plain packaging of cigarettes.

However, she remained optimistic that international arbitration was a workable dispute resolution process

despite its flaws.

“States should be working to improve it, not walking away from it.”

Ms Reed said that she and others would watch with interest what New Zealand and other nations involved in the TransPacific Partnership did with the investment arbitration chapter.

Ms Reed previously chaired the Institute for Transactional Arbitration and serves on the London Court of International Arbitration and the International Chamber of Commerce’s Arbitration Commission. She has been the president of the American Society of International Law. Ms Reed sat on the Eritrea-Ethiopia Claims Commission and directed the Claims Resolution Tribunal for Dormant Accounts in Switzerland. The latter was a tribunal set up to match dormant bank accounts with victims of World War II or their families so that the money in the accounts could be returned to them. Ms Reed said that an audit had uncovered thousands of bank accounts that had not been touched since World War II and a neutral arbitration process through the tribunal had been selected as the method of dealing with the issue.

Approximately 30,000 accounts had been uncovered and a claims process and arbitrators had worked through a legal process to match the accounts with families. By the time the process was completed in 2010 through a United States class action process, Ms Reed said that some $750 million had been paid out relating to dormant Swiss bank accounts.

“I got involved with that because I know how to do mass claims processes from my time with the Iran-United States Claims Tribunal.”

Before joining Freshfields, she was the first general counsel for the Korean Peninsula Energy Development Organization between 1995 and 1998. Ms Reed got her start in international work when she worked for the United States State Department. During that time, she served as the United States’ agent to the Iran-United States Claims Tribunal.

Ms Reed is the co-author of the Guide to ICSID Arbitration and The Freshfields Guide to Arbitration and Clauses in International Contracts, both of which are aimed at inhouse counsel.

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Report on International Bar Association’s Annual Conference in Dublin, 30 September 5 October 2012

By Clive Elliott

The 49 individual member committees focused on legal practice activities will continue to operate in the LPD and 10 committees focused on public and professional activities will now operate in the SPPI -in effect there will now be largely equivalent structures in each Division.

Intellectual Property and Entertainment Law Committee Officers’ Retreat – Askeaton Friary (near Adare).

The 2012 annual conference was held at the Dublin Convention Centre on the famous Liffey River in Dublin. It was the International Bar Association’s largest conference ever, with well over 5000 attending. Nobel Laureate and economist, Professor Joseph Stiglitz, was the keynote speaker at the opening ceremony. He discussed the Eurozone crisis and the world’s wider financial woes, in the process questioning whether austerity measures were the answer. The conference was then formally opened by Ireland’s Prime Minister, Enda Kenny, who told the audience that the Irish were a widely dispersed people of well over 70 million. Most Irish people lived abroad but those who remained were welcoming and inquisitive.

He encouraged delegates to engage with the locals because the Irish genuinely enjoyed people. That was good advice. The Irish economy is pretty sick at the moment but the people remain as warm as ever and are upbeat and optimistic.At the IBA Council meeting on 4 October, I represented the New Zealand Bar Association and the New Zealand Law Society.

Two matters involving formal motions were passed by unanimous votes. First, there was a motion made by the Credentials Committee to expel the Syrian Bar Association from the IBA. That was on the basis that the Association was contravening both the United Nations Basic Principles on the Role of Lawyers and the IBA’s Standards for the Independence of the Legal Profession. The second major motion involved the Review Committee’s recommendations to restructure the IBA. Essentially, a new Section on Public and Professional Interest (SPPI) has been established.

This means that there will be two main divisions - the existing Legal Practice Division (LPD) and the new PPID.

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In terms of the Forum of Barristers and Advocates, there had been some debate as to the part of the IBA this committee would in future be placed in. The Review Committee’s report had proposed that Barristers and Advocates could form part of the Dispute Resolution Section or a subcommittee of the Bar Issues Commission. However, the Barristers and Advocates Forum (as it is now called) has been set up as one of the so-called “Interest Groups” in the SPPI, along with the Judges’ Forum, Senior Lawyers’ Committee and others.

International Council of Advocates and Barristers (ICAB) I attended the ICAB Council meeting on 4 October. As the New Zealand representative, I updated the Council on planning for the upcoming World Bar Conference in Auckland in 2014. Miriam Dean CNZM QC was formally appointed as new co-chair. Congratulations to Miriam.

Daniel (Dan) O’Connor also resigned from the Council as Honorary Secretary.

That evening I attended, on behalf of the Bar Association, a dinner hosted by the President of the Irish Bar Council at the historic Fitzwilliam Lawn Tennis club. At the ICAB Council meeting the wording of the London Declaration was approved. The Declaration (see full text below) stresses the importance of the independence of courts and of the referral Bars in defending the independence of the courts and in affording access by the public to them.

Intellectual Property Dinner at Wilde The Restaurant – Dublin.

in 2002, a resolution was agreed upholding the vital importance of professional independence. At the emergency session held in London on 1 July 2012, it was agreed to re-issue the Edinburgh Declaration in updated form as follows:

London declaration London in 2012 has been the location for a number of internationally significant events. Among these was the World Bar Conference which took place from 29 June to 1 July 2012. Representatives of the Bars of many common law jurisdictions convened in the Temple to discuss the theme Advocacy past, present and future – constant value for a modern Bar. This conference under the auspices of the International Council of Advocates and Barristers (ICAB) was the latest in a series held in different centres every two years.

One of the principal themes of the conference was the importance of upholding the independence of the judicial system, including of course the independence of the barristers and advocates who practise in that system. The Conference heard, in the course of an emergency session, of the threats to that independence which are posed in a number of jurisdictions, including Zimbabwe (where the threats pose fundamental rule of law issues) but also South Africa and the Republic of Ireland (where regulatory issues threaten the independence of the legal profession).

At the very first World Bar Conference held in Edinburgh

Dan O’Connor In September Daniel (Dan) O’Connor, who is well-known to many of our members, was appointed as Deputy President to the Queensland Industrial Relations Commission (QIRC). The QIRC is an independent tribunal established to Dan O’Connor conciliate and arbitrate industrial matters in Queensland. Dan practised as a barrister in the Supreme Courts of Queensland, New South Wales and Victoria, as well as the High Court of Australia. He has been chief executive of the Bar Association of Queensland since 1994 and has been very active in a range of other Bar activities throughout this period. Dr John de Groot, president of the Queensland Law Society, welcomed the announcement of the appointment, saying the QIRC was a busy court which would also welcome the appointment. Dan has been

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That the independence of courts is essential to the functioning of democracies, and that the independence of the legal profession in turn is essential to the independence of the courts.

2.

That the referral Bars, the organised bodies of the profession of barristers and advocates, have a particularly important role to play in defending the independence of the courts and in affording access by the public to them.

3. That the participating Bars commit themselves to supporting, in all ways open to them, legal practitioners in all countries where their capacity to practise and organise themselves freely and independently is under threat.

4.

That the participating Bars shall take practical steps to coordinate and advance the work of Bars around the world for the protection of human rights and for the enhancement of pro bono legal services for the poor and the vulnerable.

5. The participating Bars shall also continue to work to defend the independence of the profession of barrister and advocate.

Noelle Mcgrenera QC Stephen Hockman QC ICAB Co-Chairs.

an active supporter and advocate for the New Zealand Bar Association and his generous assistance and support over the years have been invaluable and greatly appreciated. We wish Dan all the very best in his new judicial career.

BARRISTER William Martin Chambers, Auckland

www.nigeldunlop.co.nz

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Get up and Speak up Seminar Provides Advice for Young Advocates Oral advocacy could only be mastered in the school of hard knocks, said barrister Gillian Coumbe. She told the joint New Zealand Bar Association/ Auckland Women Lawyers’ Association seminar Get up and speak up on 27 September 2012 that it was Gillian Coumbe important for junior advocates to seek out opportunities to practise their skills. In a paper titled Don’t just sit there, Ms Coumbe said that advocacy encompassed the conduct of a civil case from start to finish. However, it was the oral presentation of the case in the courtroom that ultimately defined the advocate.

“Mastery of the exciting art of oral advocacy requires constant practice and effort: “Years of toil, nights of stress and days of danger.” On the job training should therefore begin early in your career. Otherwise, you will not have time to make all the necessary mistakes.”

Ms Coumbe said that Australian research showed that women advocates were under-represented in speaking and lead roles in the courts, especially in commercial and appellate cases. Observation and impression suggested that the same was true in New Zealand.

Ms Coumbe said that the opportunity for novice advocates to do minor court appearances on their own provided essential experience. Such solo experiences should begin on day one, with the complexity of the cases gradually increasing over time.

“However, the best way for young lawyers to learn good advocacy skills is to supplement these solo appearances with a role as junior to a leading counsel. The opportunity to watch how things should be done, and ask questions, is invaluable. Much can be learned from closely observing and copying (or occasionally cringing and avoiding as former Australian Judge Michael Kirby put it).”

For the first year or two, said Ms Coumbe, the junior’s role in court might be a largely silent one. However, silence should be the exception rather than the rule, for the following reasons –

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• without a speaking part, the best opportunities to learn and improve were lost. Inheriting a “top barrister” gene was not essential as good advocacy could be learned.

Studying the many papers listing handy hints on oral advocacy could assist, as could observation of senior counsel and attending training courses but there was no substitute for direct experience • only by speaking up could novice advocates really learn how to handle difficult situations such as unexpected developments or vigorous (and occasionally hostile) questioning by Judges. Ms Coumbe said that the forensic skills of senior counsel did not transmit themselves to juniors by some process of osmosis. Juniors needed to experience for themselves and be tested in the hard and public school of advocacy • doing part of the oral presentation with a more experienced counsel provided an invaluable opportunity to receive feedback about one’s performance. It also offered the chance for the fledgling advocate to seek guidance and advice before getting to his or her feet • although challenging, oral advocacy could be the most satisfying and exciting part of the case. By not speaking, advocates denied themselves much job satisfaction • habitually silent juniors would eventually acquire reputations for silence. This meant that they would be seen as able assistants but not as leaders. A silent advocate might write brilliant submissions and handle the preparation of the case superbly but the reality was that most of the credit would go to the advocates who presented the case. Those who did not speak up at all might be permanently consigned to the supporting role of second violin • taking a wider view, if more women did not speak up, it would take longer to close the gender gap at the Bar table.

Silence made it harder to change the traditional briefing patterns (especially in commercial and appellate litigation) that were based on the misconception that good advocacy – and especially the lead role – required “male traits.”

Ms Coumbe said that good advocacy required excellent communication skills combined with intellectual rigour, confidence and a certain fearlessness. Gender was, and should be, irrelevant.

Ms Coumbe went on to discuss how novice advocates could obtain speaking parts. She said that the best method was by asking for them. Her early experience at Russell McVeagh in the 1980s had been that the partners were very receptive to sharing the oral presentation. In turn, that reassured clients.

Starting out in advocacy might initially involve leading a few minor witnesses or presenting the secondary arguments.

“Once you have senior counsel’s confidence it will be taken for granted that you will speak. But in the early days you may need to be insistent. Sometimes my allocated speaking part was in danger of being squeezed to vanishing point. Once, in the Court of Appeal, my senior counsel, who was in full flight addressing the Bench, turned and asked “Shall I just keep going ?” I replied “No, I want my go”.”

In addition to pre-allocated speaking points, Ms Coumbe said that additional opportunities often arose in the course of a hearing. For example, new, unexpected issues might arise and an already-overloaded senior counsel might ask the junior to address them.

Antonia Fisher, Gillian Coumbe, Eliza Walker, Vivienne Crawshaw and Rachael Reed

“Even if you have to work all night, even if it is a difficult argument and you anticipate a rigorous time from the Bench, say yes. If senior counsel offers you an out – “I’ll do it if you don’t feel able to” – don’t take it. Grab the opportunity, however daunting.”

Ms Coumbe observed that it was more difficult today than in the past for counsel in civil litigation to obtain the regular experience of the courtroom. All the more reason, she said, to seize all opportunities.

Ms Coumbe acknowledged that the “terrors of oral advocacy” were very real in the beginning. She had anticipated her first appearance in court, only a few days after admission, with dread. However, she said that anxiety before a hearing was perfectly normal – and indeed necessary. Those feelings of apprehension became more manageable with experience and steps could be taken to increase confidence. These included being thoroughly prepared and considering investing in professional voice training. Ms Coumbe said that voice training had numerous advantages, including enhancing clarity, tone, enunciation and projection.

Discussing the transition to a leading role, she said that this took time and should be a natural progression.

The groundwork could be laid by making the most of the junior’s role through taking on increasingly significant speaking parts. However, it was unwise to appear only in junior roles. It was important from the outset to have cases in which one could appear by oneself. Novice advocates should create opportunities, perhaps by pro bono work, and should be ready to step up to the senior role if the opportunity arose. Ms Coumbe concluded by advising junior advocates not to place limits on themselves. They should step up and reap the rewards of a satisfying career.

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Judge Sarah Fleming, Gillian Coumbe, Chief High Court Judge, Justice Helen Winkelmann, Chief Justice Dame Sian Elias

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NZBA Team Runner-Up at Legal Research Foundation’s Quiz Night The New Zealand Bar Association’s team was the runner- up at the Legal Research Foundation’s biennial Quiz Night held on 17 October 2012. The winner of the new Alpha cup trophy for individual excellence was Justice Peter Woodhouse, who scored a remarkable 19.5 out of 21 in the individual quiz.

For the second time running, the winner of the teams’ quiz Intelligence trophy was Name Suppressed, a team comprising High Court judges. The NZBA’s team, Bar Humbug, was the runner-up and took home the Quite Smart trophy. The Association’s team members were Miriam Dean CNZM QC, Stephen Mills QC, Jenny Cooper, Gillian Coumbe, Mark Tushingham, Dermot Ross, Peter Spring, Jane Anderson and Melissa Perkin. The Legal Research Foundation described the NZBA’s team as “a collection of sharp wits.”

Members of the team were Miriam Dean, Stephen Mills, Jenny Cooper, Gillian Coumbe, Mark Tushingham, Dermot Ross, Peter Spring, Jane Anderson and Melissa Perkin.

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New Zealand Centre for Human Rights Law, Policy and Practice Off to Flying Start

By Kris Geldhill, Director, New Zealand Centre for Human Rights Law, Policy and Practice Oxford University’s Vinerian Professor of English Law, Andrew Ashworth, launched the New Zealand Centre for Human Rights Law, Policy and Practice with a public lecture in March 2012 at Old Government House in Auckland, attended by judges, senior practitioners, academics and students. Located at the University of Auckland’s Faculty of Law, the centre has been established to examine human rights in a changing world and aims to support discussion between academia, civil society, the legal profession and policy makers on human rights topics, domestically and internationally.

The first several months have been extraordinarily busy. A stream of public lectures examining cutting edge issues has been hosted, including Widney Brown, Legal Counsel to Amnesty International, addressing the prospects for an arms control treaty and Esther Brimmer, President Obama’s Assistant Secretary of State for International Organizations, discussing the United States engagement in human rights issues in the Pacific.

The centre was also at the forefront of the creation of the New Zealand Human Rights Lawyers Association (HRLA – see www.hrla.org.nz), launched in June 2012 with a lecture

by Manukau District Court Judge Jonathan Moses on the importance of being a lawyer active in human rights, with barrister Grant Illingworth QC providing some supplementary comments. Among other things, the HRLA hopes to take on and pursue critical human rights cases to the Human Rights Committee of the United Nations. It is already working on its first case and intervening in domestic cases will also be considered. The HRLA and the centre, together with the Human Rights Foundation, were involved in presenting a seminar on the practicalities of taking a case to the United Nations Human Rights Committee.

As a university body, engagement in research is a central function of the centre, though it is hoped that this can be research that can be used by the legal profession and others.

The main methodology used to generate research is the establishment of the Human Rights Working Paper Series.

The series is organised into more than 30 thematic and geographic series and edited by academics and assisted by student associates. The working paper series aims to publish short papers addressing theoretical and empirical human rights issues, providing a forum for the publication, discussion and debate of these issues. Submission guidelines are on the centre’s “Research” homepage. Papers from practitioners are welcomed.

The working paper series also seeks to provide a repository of human rights documentation and so should provide a starting point for research on a particular issue. Each series has a number of pages attached, presenting cutting edge podcasts, video lectures, newspaper commentary, reports by NGOs, international organisations, and governments relating to the particular human right in question, as well as relevant journals and links to other centres and institutions.

Many of the academic editors of the working paper series are from the University of Auckland, some from the Law School but

many from other departments, as the centre has been keen to ensure that it builds the possibility for cross-disciplinary approaches to human rights standards. In addition, the centre has a significant number of such academic members from other universities in New Zealand and elsewhere.

In due course, a programme for visiting scholars will be established. The centre has recently appointed its first Research Fellow. Rosslyn Noonan, best known as the Chief Commissioner for Human Rights for a decade, will be associated with the centre in a research capacity: naturally, her talents will also be used in other ways.

There is also a forum for speedier and less academic debate. Attached to the working paper series is the New Zealand Human Rights Blog, providing for timely comment on contemporary and other human rights issues.

This student-led initiative will be supplemented by case summaries of leading human rights cases, both arising under the New Zealand Bill of Rights Act 1990 and from other jurisdictions: the hope is that this will build into a ready reference point for important cases.

Also planned for students is a human rights careers hub.

This will have profiles of New Zealand graduates who have gone to work in human rights fields, and the aim will be to alert students to the possibilities and to provide them with contacts who can offer peer support and guidance.

The centre hopes to develop a range of additional human rights-related courses that can be offered to students, including a version of the clinical legal education programmes that have become a central feature of the law school experience of students in the United States. The plan here is to place students within civil society organisations to help them participate in the United Nations human rights monitoring process by the provision of reports to the relevant United Nations body, or to participate in making submissions on legislation passing through Parliament. There are opportunities for practising lawyers to get involved in this to offer mentoring support.

In terms of events on the drawing board for next year, these include a conference on the theme of access to justice and a further one as part of the Constitutional Review on the questions of the way that human rights standards are part of the constitutional framework in New Zealand and the way they should be. The guest speakers will include Professor Michael O’Flaherty who, amongst other appointments, is the Vice-Chair of the Human Rights Committee of the United Nations and the Chief Human Rights Commissioner for Northern Ireland.

The New Zealand Centre for Human Rights Law, Policy and Practice aims to build on New Zealand’s past position as a leader in human rights by placing human rights, again, at the centre of public discussion. New Zealand played a significant role in the formulation of the Universal Declaration of Human Rights, has been an early adopter of many human rights standards, but occasionally lags behind. The centre is off to a healthy start in its task of returning discourse on human rights to a central position.

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Christmas Functions - Christchurch and Wellington

David O’Neill, Catherine Bibbey, Suzanne Robertson, Hon Peter Penlington QC, Simon Moore SC

Austin Forbes QC, Marcus Elliot, Jane Montgomery, Rachel Dunningham

Justice William Young, Clive Elliott, Justice Lester Chisholm, John Hardie

Robyn Mackie, Kerry Cook, Helen Coutts, Peter Egden

Jonathan Eaton, John Hardie, Simon Moore SC

Simon Shamy, Malcolm Wallace, Dale Lester, Associate Judge Rob Osbourne, Rachel Dunningham

Craig Ruane, Associate Judge John Matthews

Sam Maling, Stefan Kaminski

Justice Douglas White, Justice Helen Winkelmann

Jonathan Haig, John Upton QC, Kevin Sullivan

Chief Justice, Stephen Mills QC

John Morrison, Graham Taylor

David McLay, Mike Lennard

Matthew Sherwood-King, Nigel Fyfe

Sir Geoffrey Palmer, Paul Chisnall, Morgan Slyfield

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Law Commission’s Review of the Judicature Act The Law Commission’s Report, Review of the Judicature Act 1908: Towards a New Courts Act (NZLC R126) was tabled in Parliament on 27 November 2012.

The Judicature Act 1908 is an integral part of the New Zealand legal landscape. However, many parts have become redundant or outmoded and the proposed reorganisation, consolidation and modernisation of the Act are overdue. Accordingly, the New Zealand Bar Association (the “Association”) supported this review. We concentrated our submissions on three key areas: judicial specialisation, vexatious proceedings and wasted costs; these being particular areas in which its views were solicited by the Commission.

Specialisation in the High Court The Association submitted that the trend in the legal profession was towards greater specialisation and that in many countries the same trend was being experienced with the judiciary; with judges increasingly being expected to identify areas in which they had specific abilities and interests and to obtain and maintain the necessary level of skill and expertise in those fields.

It was argued that this greater focus on the maintenance of skills, learning and expertise leads to greater efficiencies, improved levels of expertise and in most cases better outcomes for litigants, clients and the public.

The Commission accepted that a sufficient need has been made out for the establishment of a commercial panel in the High Court but it was not convinced that a commercial panel, or indeed other particular panels, should be created by legislation. Rather, the view was taken that legislation should empower the Attorney-General, with the concurrence of the Chief High Court Judge, to establish panels in the High Court by Order in Council. Further, the Commission recommended that the make-up of the panels should be a matter for the Chief High Court Judge. It also concluded that it may be desirable to have more flexible rules produced for the benefit of the commercial panel work, a matter which could be dealt with by the Rules Committee.

The Commission recommended that in terms of defining the scope of the commercial panel the definition utilised in the Commercial Court in London would be a useful starting and suggested that intellectual property could usefully be added to that list. It felt that at this time there was not really a case for a separate IP panel even though a number of submissions supported this - on the basis of its importance to the New Zealand economy.

The Commission suggested that the commercial panel could act as a pilot project as to how a panel system would best work and that the Chief High Court Judge should be required to report on its operations to the Attorney-General, 24 months after its establishment.

The Commission also pointed out that the Ministry of Justice should provide better data on caseloads in the higher courts and to include this information in its future Annual Reports.

Finally, it was recommended that the Commercial List be discontinued.

Vexatious Proceedings The Association made a lengthy submission on this vexed area. The Commission accepted that a graduated system of orders for restraining vexatious civil proceedings should be introduced and that the new statutory regime should replace rather than supplement s 88B. . The Commission also accepted that the courts should be entitled to take into account interlocutory applications and appeals brought by the litigant when considering an application for a civil restraint order. This is welcomed.

Some differences arose as to who should have standing to apply for an order. The Association proposed that the Attorney-General should only have standing (but not exclusive standing) at the intermediate and final stages of the system and that the courts should be able to initiate orders on their own motion. In addition we proposed that a party to the vexatious proceeding and a person who had a sufficient interest in the matter should be able to do so.

The Commission accepted our submission that the courts should be able to initiate an application for a civil restraint order themselves, and that a party should also have standing to do so, but did not accept our proposal to extend standing to make an application to “other interested parties”.

Likewise, the Commission accepted our submission that where a person against whom a civil restraint order has been made subsequently seeks leave to issue or continue a proceeding then (a) the application for leave should normally be dealt with on a without-notice basis and (b) the applicant should be prohibited from serving the application on any person unless so directed by the Court.

We also contended that the problem of querulous (i.e. unduly difficult and often obsessive) litigants needs to be addressed.

The Commission indicated that while it had considerable sympathy for the position that lawyers find themselves in when dealing with problem litigants that this was really outside its terms of reference. It did however note our acknowledgement that the graduated civil restraint order system would cover querulous litigants and hopefully assist in dealing with them.

Wasted costs The Association expressed its concerns about the proposed wasted costs regime (i.e. costs made against lawyers themselves) and indicated it would only support the inclusion of such a provision if it preserved the current limits and indeed confined it yet further. We proposed a number of specific changes and limitations.

The Commission accepted our view that alignment of civil proceedings with the Criminal Procedure Act 2011 should not be the overriding objective and that any possible shift away from the established jurisprudence should be treated with real caution. Ultimately, the Commission concluded that it should not recommend there be a wasted costs provision in the new courts legislation.

This is just a very brief summary of some of the areas the Bar Association focused on. It is pleasing to have seen a number of our key recommendations taken on board. This is an important Report and a close read is recommended.

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How Lawyers Can Make Use of Linkedin

By Kirsten Hodgson Lawyers who are new to LinkedIn or haven’t actively used it typically say one of three things when they talk about it – • “I keep getting invites from people to join them on LinkedIn. What is it and is it worth it?”

• “I’m on LinkedIn but I haven’t got any work from it” • “I’m on LinkedIn but I’m not sure what I should do now.”

It’s important that you find out Kirsten Hodgson what LinkedIn is and ways in which you can use it, so that you can make an informed call about whether it can help make your practice more successful. In March 2012, LinkedIn had 150 million members globally. By August 2012, that figure had risen to 175 million users. In March 2012, there were over 500,000 New Zealanders on LinkedIn. That’s an eighth of our population. By March 2012, the number of Australians on LinkedIn had surpassed three million.

LinkedIn is not a fad. At this point, it is one of the most effective electronic means the professional services sector has at its disposal to connect, network and build online relationships with existing and future clients. This may change if a new (and better) platform is developed in the years to come, but right now, if you’re targeting business people then LinkedIn is the best bet for fast, cost-effective online networking.

LinkedIn is a giant network on which many of those to whom you want to talk are present, including clients, prospects, referrers, journalists and other opinion leaders.

The 2012 in-house counsel new media engagement survey, conducted by Greentarget, Zeughauser Group and Inhouse Counsel Magazine, clearly demonstrates the increase in adoption and usage amongst general counsel. Can you afford to ignore a channel that, if used well, will enable you to connect with ‘hard to reach’ people?

There is no up-front cost to using the basic LinkedIn platform.

However, if you find that you want to use it to a greater degree, there are various pricing options that will give you more features, including better analytics and access to others. The free account is likely to be sufficient for 95 per cent of you. There are, of course, hidden costs – internet usage, your time spent on LinkedIn and so on. However, if you are clear about what you’re looking to achieve, then this will be time well spent.

Lawyers can use LinkedIn in the following five ways to build

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their practices – • by raising their profiles and positioning themselves in their fields • research and planning • building their knowledge bases in their areas of expertise • strengthening relationships with existing clients and referrers • attracting more of their ideal clients.

Case studies of lawyers who have used LinkedIn in this way can be read at http:// http://lawfirmsandsocialmedia.com/freechapter/.

Once you’re clear about how you will use LinkedIn to help you achieve your business development and marketing goals, you might wish to follow my five-phase process to leveraging the platform.

Phase 1 involves setting up a compelling LinkedIn profile that clearly positions you Phase 2 is about connecting with others Phase 3 involves engaging with others Phase 4 looks at taking relationships offline Phase 5 covers measuring your performance The speed at which you move through each of these phases will vary.

It is important to have all your ducks in a row so that you are well-placed to take advantage of new work opportunities when they do arise. If your profile clearly positions you, if you are connected with people in your target industry sectors, if you regularly engage and share valuable content, then others are more likely to want to meet you offline.

If you have a clear sense of what it is you’re looking to achieve and if you measure how you’re doing, using metrics that matter to you, you’ll probably find integrating social media with your existing business development and marketing initiatives helps them to fly. *Kirsten Hodgson has over 13 years of legal marketing experience both in-house (at Clifford Chance in London and Minter Ellison Rudd Watts in Auckland) and as a consultant to lawyers and barristers throughout New Zealand. Her book LinkedIn for Lawyers: Connect, Engage and Grow your Business was published by LexisNexis in September 2012. For more information see her resource centre (http:// lawfirmsandsocialmedia.com).

NZBA Expresses Access to Justice Concerns in Submission on Civil Fees Review Court fees were a barrier to justice and needed to be justified rigorously, the New Zealand Bar Association said in its submission to the Ministry of Justice on the review of civil fees. The ministry in September 2012 released an 89page discussion document titled Civil fees review – A public consultation paper.

The NZBA responded in a submission dated 9 November 2012.

The Association said that its starting point was the proposition that courts and tribunals provided a public service with benefits.

While individuals and corporations could, in some cases, be said to obtain a private benefit from the use of courts and tribunals, the overall benefit was to the public and society as a whole.

The submission said that the observation in the Foreword to the consultation paper that litigants obtained “personal gain” by using the courts was subject to a major qualification. This was that, in the majority of cases, a plaintiff was seeking redress for wrongs already done and damages or other relief for injury already suffered.

“There is no component of “gain” in this: for a successful plaintiff the courts are a means to the restoration of the plaintiff to the position it should occupy according to laws largely made

by Parliament. For a successful defendant the court validates the defendant’s position. Again, the concept of “gain” has limited relevance. The concept of “gain” only has clear validity in the area of public interest or benefit: it is necessary in the public interest that society is not merely provided with laws but, also, with the machinery to effectively enforce them.”

The submission said that the Association’s view was that the document’s suggestion that litigants were in it for personal gain was a wrong premise and the paper’s authors had jumped straight to the business of garnering greater fees without first considering the much more fundamental questions either of why the state provided courts, or the true rationale for the judicial arm of government. The NZBA said that it took as its starting point the premise that fees were a barrier to justice and needed to be rigorously justified. The submission noted that, in the United Kingdom, the courts had in 1997 upheld a challenge to the setting of court fees and declared Article 3 of the Supreme Court Fees (Amendment) Order 1996 unlawful.

The Association said that it believed that it was imperative that any increase or expansion of fees be held to the minimum levels possible so as to avoid issues of access to justice. The submission said that, while it was accepted that there was a cost in providing courts and tribunals, that cost was not significant in the context of overall government expenditure and did not justify an increase in fees.

The NZBA noted that page 7 of the consultation paper detailed the extent to which each jurisdiction currently recovered costs through court fees, together with the ministry’s suggestions on the extent to which the costs should be recovered from fees in the future. However, the submission observed that no information had been provided as to how it had been

determined that the cost recovery for a particular court was currently at a particular level. More importantly, said the Association, no explanation had been provided as to how the proposed future costs figures had been derived.

“For example, how does the ministry arrive at the suggestion that cost recovery through court fees should now be 37 per cent ?

Or that cost recovery in the District Court should be 33 per cent?

Or that cost recovery in the Court of Appeal should be 15 per cent? No principled justification is provided for why these higher percentage figures are appropriate, or how they have been calculated.”

The Association said that its position was that no increase in court fees was appropriate unless there had first been careful analysis and an impact assessment. As the consultation paper did not provide such analysis or assessment, the NZBA said that no increase in fees should be implemented until that information had been gathered and made available for scrutiny and comment.

The submission detailed the public benefits of the court system and court proceedings and said that these should be taken full account of, with fees not being set at a level that would seriously diminish or undermine those public benefits. The Association noted that an economic analysis commissioned by the New Zealand Law Society in 2004 had demonstrated that the then-fee for filing proceedings was more than 500 per cent of the cost associated with filing.

In relation to the proposals to increase fees for District Court proceedings, the submission said that most of the increases suggested were modest and moves towards standardised fees were constructive. However, the submission detailed specific concerns about the proposals relating to High Court fees, including concerns about introducing hearing fees for settlement conferences, proposed high levels of fees for substantive hearings and prepayment of fees. The Association set out details of hearing fees in Australian states, noting that they were much lower than the proposed charges in New Zealand.

The NZBA stated that it was firmly opposed to the suggestion that counterclaimants should be required to prepay hearing fees. In the – admittedly extreme – case of a 20 day hearing with both a defendant and a third party making counterclaims, the submission said that $192,000 would have to be paid into the court’s trust account in advance. This might deter defendants from pursuing other than very large counterclaims, said the Association.

“This measure becomes even more oppressive when the proposed refund/forfeiture system is factored in. If the parties settle less than 21 working days or more prior to the hearing, a large proportion of the prepaid hearing fees will be forfeited.”

An example of that would be that, in a case in which the parties gave notice of settlement 15 working days before the hearing, 50 per cent of the $192,000 in fees would be forfeited – a figure of $96,000. The submission said that this would be a large windfall for the Crown and was difficult to justify on any principled basis.

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Criminal Procedure Changes Due to Take Effect Major changes to criminal procedure would be made when the bulk of the Criminal Procedure Act 2011 took effect, said University of Auckland Faculty of Law Professor, Warren Brookbanks. He told a 27 October 2012 seminar organised by the New Zealand Bar Association that there had been many changes to criminal law since he had last presented a wide-ranging update.

Parts of the Criminal Procedure Act 2011 had come into force, including a legislative framework for sentence indications, changes to the law relating to the suppression of names and evidence and a power for the Court of Appeal to dismiss appeals for non-compliance with procedural orders.

Professor Brookbanks said that stage II of the act must come into force within two years of the act’s assent, if not earlier.

Those sections encompassed the majority of the act’s reforms and significantly altered criminal procedure in New Zealand.

In relation to search and surveillance, he noted that the Search and Surveillance Act 2012 had taken effect on 1 October 2012.

Professor Brookbanks described the new law as a monolithic statute which aimed to codify the law on search and surveillance in New Zealand. He said that Part I of the act stated its purposes as being to modernise the law, including taking account of and regulating the use of new technologies. Part 2 dealt with police powers in relation both to warranted and warrantless searches of places, vehicles and other locations.

Professor Brookbanks noted that the Public Safety (Public Protection Orders) Bill had been introduced to Parliament on 18 September 2012 by Police Minister Anne Tolley. He observed that the legislation had not yet had its first reading and was designed to target no more than four to five people a year. It proposed to impose a regime of preventive detention for offenders who had completed their sentences but were considered, at the point of release, to be at high risk of imminent and serious sexual or violent offending. The orders would set up two levels of detention and it had been acknowledged in the Regulatory Impact Statement that they were likely to be inconsistent with the New Zealand Bill of Rights Act 1990, as well as with the International Covenant on Civil and Political Rights.

“If it survives the parliamentary process, it will be a big win for the popular punitiveness lobby, and will represent a further ramping up [of] New Zealand’s highly punitive criminal justice culture.”

Turning to legal aid, Professor Brookbanks described the new fixed fees regime for criminal legal aid as a disastrous development and “remarkably short-sighted and counterproductive.” He said that it would significantly affect the delivery of quality legal aid services in New Zealand for the foreseeable future and there might be worse to come.

“We should be very worried about the quality of legal services that will be provided to defendants in the future. The situation is indeed bleak.”

Other changes to criminal law legislation mentioned by Professor Brookbanks included amendments to bail laws and changes to victims’ legislation. He then discussed in detail recent significant court judgments relating to the criminal law.

Professor Brookbanks said that the Court of Appeal had in R v Harpur [2010] NZCA 319 reconsidered its earlier decision in R v Wilcox [1982] 1 NZLR 191 and concluded that it was in

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some important respects incorrect. R v Harpur had involved a Crown appeal on a question of law arising from H’s conviction for attempted sexual violation of a four-year-old girl.

The court answered two questions of law raised by the Crown in the light of the District Court decision. These were – • whether the Judge had been correct in finding as a matter of law that acts done by H with intent to commit offences of sexual violation were only preparation for the commission of those offences and too remote to constitute attempts to commit them under section 72(2) Crimes Act 1961 and • if not, was the decision to discharge H under section 347 erroneous in law ?

The Court of Appeal held that the District Court Judge had been wrong to discharge H on a charge of attempting to sexually violate a four-year-old girl. His acquittal on that charge was quashed and he was directed to stand trial.

Professor Brookbanks said that it could be argued that the “commencement of execution” test was still an available threshold for attempts in New Zealand. The Court of Appeal in R v Harpur expressed its preference for the approach in R v Bateman [1959] NZLR 487 rather than R v Wilcox.

Professor Brookbanks said that another important development in the substantive law had been the Court of Appeal’s decision in R v Edmonds [2009] NZCA 303 concerning the proper approach to the common purpose rule in section 66(2) of the Crimes Act. The case involved a group of gang members which had become aware of the presence in its district of another gang and decided to attack it. The Court of Appeal upheld the High Court Judge’s approach that knowledge that the principal was carrying a knife was unnecessary. The court concluded that requiring knowledge of the actual weapon used would undermine the purpose of section 66(2).

Another topic discussed by Professor Brookbanks was that of unfitness to stand trial, which he said continued to raise issues.

He said that the Court of Appeal decision in Solicitor-General v Dougherty [2012] NZCA 405 and the High Court decision in Leapai v Police CRI-2011-404-301 might have important implications for other offenders in the criminal justice system.

Professor Brookbanks said that courts were generally very reluctant to revisit the question of trial incapacity after the event if the issue of unfitness had not been raised in earlier proceedings.

However, the judgment in Leapai v Police raised the worrying question of how many other offenders were currently serving custodial sentences for serious offences when they had been presumptively unfit to plead at the time they entered guilty pleas but no-one had realised the severity of their disabilities.

Professor Brookbanks discussed the Supreme Court of Canada’s decision relating to kidnapping in the case of R v Vu [2012] SCC 40, stating that it was not clear that the case would have been decided differently under New Zealand law.

Although this country did not have a specific offence of “unlawful confinement” as Canada did, it was implicit from the decision that unlawful confinement was a lesser offence included in the more serious crime of kidnapping. The important point, whether from a New Zealand or a Canadian perspective, was that the offence of kidnapping was a continuing offence that was only complete when the victim was released from captivity.

Use of Digital Dictation Technology for Barristers

By Mike Kelly, Director, Sound Business Systems Ltd Accurate, typed documents derived from recorded notes or depositions are the lifeblood of the legal profession. New Zealand has one of the highest usage rates of digital dictation in the Western world and barristers are continuing to adapt this technology in ways that are increasing workplace productivity and reducing their costs.

Proprietary, handheld dictation devices like those manufactured by Olympus and Philips will still be used in the coming years, but they are being replaced with emerging technologies. Some barristers are using the basic dictation functionality in their Android, Apple and Blackberry devices whilst out of the office and conventional “dictaphones” when they are at their desks. An increasing number of barristers’ chambers are migrating the software that conventional dictaphones use from a network to lower-cost hosted or cloud-based servers.

Digital software allows dictation to be routed automatically according to work type or to any number of pre-determined typist destinations within the barrister’s chambers. Many barristers seem to prefer to email transcription files to specific people rather than download them automatically over the chambers’ network. Barristers’ chambers can also reduce overhead costs and improve efficiency through work sharing. There are opportunities for barristers’ chambers to review present work practices and further exploit the digital potential.

The Digital Portable (DP) device is what most barristers’ chambers adopted in the mid-1980s and continue to use today.

Olympus was the first to introduce digital transcribers, with Philips quickly following suit. These brands have continued to update and enhance DPs which are sold and supported through a network of knowledgeable, local reseller/distributors who can help barristers’ chambers to get the most out of these devices.

Smart Phones (iPhones, Blackberrys & Androids) are seldom used as the prime dictation input device but are increasingly useful for remote work. Smart devices can all be used as part of a networked dictation solution from the likes of WinScribe (refer later) or in conjunction with the DPM such as Philips. Smart device dictation applications are user-friendly and affordable and, in the case of the WinScribe iPhone app, can be freely downloaded from the Apple iTunes Store for evaluation.

This app contains nearly all of the functionality of the pay version.

Based on the rapid advances in smart device operating systems and apps, smart devices will likely overtake DP devices as the prime dictation input device in the coming years.

Speech Recognition (SR) software has been one of the most promising technologies but many who have invested in it have found it frustrating to use. There have been recent products that are worth considering. One is Dragon Naturally Speaking.

Dragon Professional Version 12 is worth serious consideration. It is sensibly priced and can be coupled with an equally well priced specialist legal vocabulary that can deliver fast and efficient speech to text conversion. A note of caution, however: we do recommend installation and training as it is not really an out of the box solution…despite what they say!

The technology is capable of high levels of accuracy with minimal training. It is particularly useful for barristers where an

initial typed draft of a lengthy opinion is needed or for use with existing precedents. Authors can either dictate and self-create documents at the “front end,” or dictate as per current work practices and have others make corrections to a partiallycorrect document at the “back end”.

Networked Dictation (ND) software is designed for firms seeking an efficient, productive approach to document creation. It is well suited to larger barristers’ chambers with unusual IT architecture (eg Citrix or Terminal Services) or those that use a wide range of dictation hardware.Whereas the DP approach is primarily based on proprietary hardware (Philips or Olympus), DP software such as WinScribe will run on virtually any hardware.

ND software can be centrally implemented and managed by the chambers’ system administration, thus reducing the costs of installation, training, maintenance and user additions, deletions and the redirection of work in case of overload or staff absence. ND software also allows for extensive reporting on usage including input/output by authors and typists and overdue work. In addition, the software is continually updated and will not fall behind as dictation input devices become obsolete or computer operating systems change. ND software can minimise the risk in the chambers’ investment in dictation/transcription.

ND software, unlike that which comes bundled with the DPM, is also able to run on a variety of platforms, such as Citrix or Terminal Services and can be integrated with many practice systems and document management systems, meaning that it blends into existing systems. ND software runs on virtually any input device on the market so the user has full flexibility to choose whatever handset suits.

Hosted Software (SaaS) - ND technology is also available in a hosted environment. In the same way as it is possible to rent or lease hardware, software leasing is also common.

The barristers’ chambers contracts with a third party provider for technical support and maintenance and the software runs behind the scenes just as if it were in-house.

Hosted software can be especially beneficial for barristers with limited IT resources or those who prefer a pay-as-you-go approach. Current file encryption methodology ensures that dictated audio files are secure. Current hosting solutions are based in New Zealand but may eventually move to “cloud” based providers off shore. There is significant R&D in cloud technology and it is worth watching developments closely.

Outsource Transcription (OT) is a compelling option for some barristers’ chambers in which documents are created by typists who are primarily dedicated to typing rather than legal work. It might make commercial sense to outsource the role to an offsite typist so the cost becomes variable rather than a fixed cost to the barrister. *Mike Kelly is director of Sound Business Systems Ltd (www.soundbusiness.co.nz). An earlier version of this article appeared in the 29 July 2011 edition of NZ Lawyer and has been updated to reflect current trends.

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Professional Indemnity Insurance

By Marsh The New Zealand Bar Association’s liability insurance programme currently has approximately 335 insured members. A majority of members (70 per cent) is carrying a $2,000,000 limit of indemnity, with around 25 per cent of members carrying $5,000,000. 60 per cent of all members have opted for a $5,000 excess, with the remaining 40 per cent taking the higher excess of $10,000.

The tailored offering for NZBA members includes a number of other liability insurance solutions which afford members extra protection.

One of the most practical in the current climate is the internet liability policy. This provides cover for unintentional electronic breaches of confidentiality or privacy and also for transmission of a virus which causes other parties to suffer a financial loss. With the widelypublicised issues around privacy breaches recently, this represents a useful coverage component.

The NZBA professional indemnity policy provides coverage in the event that a client makes a complaint about a barrister to the New Zealand Law Society. Coverage is provided for legal costs incurred and awards made to third parties. However, if you incur a penalty or fine personally, then this is not generally covered. You need to make sure that you notify Marsh either as soon as you become aware of a complaint or when you receive notification of one, whichever comes first. This coverage is unique because it is providing protection in the event of an investigation or complaint, not necessarily a claim.

Barristers need to tread very carefully when they provide advice to family members, related parties or to anyone else with whom they have a relationship and/or financial interest. Generally, you will need

an independent barrister to perform or sign off any work you do for a related party, otherwise, in the event of a claim, you will likely have no coverage. Our advice is to exercise the utmost caution when agreeing to act for a family member of related party with which you have a financial or beneficial interest. It might seem straightforward but the water can get decidedly muddy if any problems arise and you would not want to leave yourself in the position of being uninsured.

Barristers also need to implement good risk-management strategies to reduce the potential for becoming involved in professional liability claims. Simple steps like making sure you always practise within your specific area of expertise and ensuring that you are clear in your communication with clients and solicitors all help reduce the possibility of claims through lack of understanding.

At the time of renewal of your policy, it is important to turn your mind to disclosing any material information regarding renewal.

Have you recently become aware of any circumstances that could potentially lead to a claim under your policy? Have you heard from an unhappy client or do you have an uncomfortable feeling about a particular piece of work? If you are in any doubt, do not be afraid to disclose. We always recommend that you disclose potential claims out of an abundance of caution, rather than ignore them or put them in the too-hard basket. For members insured through the programme, the common renewal date each year is 1 December.

If you have any queries regarding your cover please contact Mark Rogers -DDI 928 3056; email mark.rogers@marsh.com or Clinton Stanger - DDI 928 3110 email clinton.stanger@marsh.com.

The Continued Impact of Disasters on the Insurance Market

By Marsh The current state of the insurance market is very challenging for clients in respect of securing property and business interruption insurance. This has been emphasised with media covering scenarios whereby pricing has increased and capacity has not been readily available as in the past. To add to this, we have recently seen the demise of insurers such as Civic and Western Pacific and the issues faced by AMI, which have demonstrated the strain on insurers and their claim-funding abilities.

The New Zealand insurance market is, however, on a global scale, a small marketplace. Due to this, and the requirement for insurers to protect their portfolios against large catastrophe losses, all locally -represented insurance companies arrange significant reinsurance programmes in respect of natural catastrophes. Catastrophe reinsurance arrangements vary from insurer to insurer, with many local insurers having to reinstate part or all of arrangements following the multiple Christchurch earthquakes. In most circumstances, the local insurance market is now required to retain a greater share of any losses and this will drive further review of the pricing, coverage and deductible levels that New Zealand insurers are willing to provide to clients. Some of the impacts this has been having on the nature of insurance available in New Zealand are as follows: • deductibles/excesses for natural catastrophe damage increasing to 5 per cent of the insured values for most regions (previously only Wellington) • significant demand for detailed natural disaster underwriting information in respect of all locations to be insured. This includes information such as age built, construction materials, latitude and longitude coordinates, number of storeys, building code compliance levels, details of soil condition (liquefaction risk), structural engineering

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reports, business Interruption values allocated to individual locations or sites, and information regarding floods and other natural disasters • some insurers are imposing a lower and more restrictive limit of indemnity in respect or damage following a natural catastrophe.

This is dependent on the client’s risk profile and the level of underwriting information available • a minority of insurers is now only prepared to cover damage following a natural disaster up to the sum insured, subject to an annual aggregate.

• restrictions or no coverage available for buildings constructed prior to 1936 and 1976 in respect of higher earthquake regions such as Wellington and Christchurch. Typically, cover for these assets may be restricted to Indemnity coverage only and may be subject to further increased deductibles, such as 10 per cent of the insured value.

• Significantly-reduced appetite from insurers to take on new customers, especially those with assets located within these higher earthquake risk zones.

From the New Zealand insurance market’s perspective, the damage following the September 2010 earthquake was considered predicable. With an estimated $4.5billion of insured losses, the buildings that suffered mostly were those which had not been strengthened or were of masonry construction. By contrast, the 22 February 2011 earthquake, with loss estimates reaching $16.5billion, has been a local market-changing event. Full insurance coverage for both the Canterbury region and the remainder of New Zealand has become even more difficult to obtain in respect of natural disasters. We can expect the market conditions we are currently experiencing to continue with prices increasing and coverage restrictions, for the remainder of 2012 and into 2013.

New Members of the New Zealand Bar Association The New Zealand Bar Association is very pleased to welcome the following new members who have joined the Association since September 2012: Mr Aravinda Abeygoonesekera Ms Melissa Allan Ms Victoria Casey Ms Caron Cato Ms Clare Lenihan Dr Matthew Palmer

Wellington Auckland Wellington Auckland Invercargill Wellington

Mrs Kathryn Penrose Ms Rachael Reed Mr Stuart Rose Ms Nura Taefi Mr Andrew Tringham Mr David Weaver

Auckland Auckland Christchurch Auckland Auckland Tauranga

Telecommunications Services for Businesses

By Igor Portugal, Chief Executive Officer of Vadacom Have you looked at your telecommunications bill lately thinking there must be a better way to structure your telecommunications? Have you ever been stung by a massive roaming bill upon your return from overseas?

Many of us have. The truth is that telecommunications landscapes are changing and there are a number of options now available to reduce costs and work smarter.

You can replace the plain old telephone line with Voice Over Internet Protocol service, which will drastically reduce your phone line running costs and enable a number of features to make you more productive. Those features include the ability to work away from the office and have your landline number follow you, integrating your mobile and land-line together, receiving your voicemails in the email inbox and having your phone calls delivered to your cell phone via a data connection rather than the cellular connection.

When you go overseas, you can also arrange a SIM card offering you a large data allowance (or unlimited in some cases) for a fixed fee.

In addition, your office phone system needs to be capable of connecting via SIP – a new type of phone line. Put it all in place and you are able to reduce your international roaming bill to the cost of the fixed fee data cost.

In conclusion, you can reduce your roaming data charges to a minimum by getting a data SIM card for the country of your destination, as well as roaming call charges by using SIP instead of regular phone. You can implement a VOIP system enabling you to take your office number anywhere, receive office voicemail as email and take your office number with you on your mobile or a remote phone. *Igor Portugal is the CEO of Vadacom, which specialises in implementing VOIP phone systems for businesses.

That last feature is not very useful in New Zealand. However, it can save you a lot of money when you are travelling overseas. At the moment, if you are roaming, you are still paying for both receiving calls and making calls – this can be pricey and deliver a bill shock on your return home.

An alternative, instead of using a regular calling service on your phone, is to download a piece of software on your smart phone to take and receive calls over VOIP – there are many options to choose from, they are normally called a “SIP Phone”. You can use most SIP phones (remember, this is software on your cellphone, not actually another phone) in order to make and receive phone calls over a data connection. Just remember not to use the regular phone software, as it will cost you the same roaming charges.

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Submissions Sought on Review of Joint and Several Liability Submissions on the Law Commission’s issues paper Review of Joint and Several Liability are invited by 31 January 2013.

The commission on 21 November 2012 released a document setting out how the rule of joint and several liability works and identifying its key strengths and weaknesses, with a view to highlighting issues and encouraging submissions based on an informed view of the current law and its alternatives.

Law Commission President, Sir Grant Hammond, in a Foreword to the paper said that one of the most difficult issues in civil law was how to deal with situations in which two or more defendants were held liable to a plaintiff for the same damage. Sir Grant said that the rule of joint and several liability was of considerable importance in the day-to-day operation of civil law. It impacted particularly on the construction sector, including the leaky buildings crisis with which New Zealand had been required to grapple in recent years; business and professional services, particularly in the context of the financial crisis; and local government.

Sir Grant said that the rule of joint and several liability had been the subject of legal and parliamentary interest over the past 25 years, not just in New Zealand but also in other common law jurisdictions. As recently as 1998, the commission had recommended that the rule of joint and several liability be retained. However, the global financial crisis and the leaky homes saga had resulted in a fresh request for the commission to examine the relevant issues.

Chapter 4 of the November 2012 issues paper said that the commission had in 1998 examined four principal areas relating to joint and several liability. These were the following – • whether concurrent defendants should be liable jointly and severally, or just severally • whether there should be an extension of rights of

contribution between defendants • how the problem of the uncollectable contribution might be addressed, and • whether there should be an extension of the concept of apportioning damages to reflect the plaintiff’s fault.

The commission concluded that concurrent wrongdoers should be jointly and severally liable for the whole of the damages payable to a wronged person in respect of a loss, as it did not consider that a “compromise scheme” was possible. The review recommended that the right to contribution among defendants should be extended whatever the basis of civil liability, as had already been done in England and Wales in the Civil Liability (Contribution) Act 1978. The commission also suggested that contributory negligence should be available for contract, with the question of whether the plaintiff’s action or inaction had contributed to the loss and the exact apportionment of that responsibility being matters for the court to decide on the facts of the case.

The November 2012 paper in Chapter 5 reviewed what had happened since the commission’s 1998 study of joint and several liability. It noted that the commission’s recommendations to have contribution and contributory negligence rules apply in contract cases as well as in torts and equity had not yet been taken up. However, the subsequent allowance of concurrent liability in tort and contract had lessened the significance of the remaining differences in treatment. The overall result was that the normal liability rule in New Zealand was joint and several liability, with defendants

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generally able to seek contributions from each other and to plead contributory negligence when it was appropriate.

“Despite this relatively settled position, debate has continued over the merits or otherwise of joint and several liability, and whether an alternative such as proportionate liability should replace the existing rule. “ The paper noted that the leaky homes crisis had developed rapidly at the end of the 1990s and had become a major liability crisis by the start of the new century. It was still today a major legal, community and public policy issue. The commission said that the complexity of even a single residential home build meant that, for every damage and potential plaintiff, there could be multiple potential defendants, all of whom might be proved to have contributed to or caused latent defects leading to weathertightness failures. The Department of Building and Housing had in 2011 commissioned the Sapere Report, which considered the issues of relative fairness between defendants and overall fairness for plaintiff homeowners. The report had noted that changing from joint and several liability to proportionate liability would transfer the cost and unfairness of uncollectable shares from defendants to plaintiffs without addressing the issue. The authors concluded that proportionate liability could not be considered as a viable option without mandatory home warranty insurance. They also stated that, even if such a scheme were introduced, consumers/homeowners would be worse off because of the additional burdens of having to join defendants, prove cases against each and then later pursue payment. The report recommended against a move to proportionate liability in the building sector for those reasons.

Chapter 6 of the November 2012 document discussed the Australian experience and Closer Economic Relations. It noted that the issue of allocation of liability had been the subject of extensive debate in Australia during the 1980s and 1990s. That had resulted in the introduction of proportionate liability for the construction sector in some states.

Subsequently, a perceived insurance crisis had emerged.

That was generally traced back to the collapse in 2001 of HIH Insurance, a major general, professional indemnity and public liability insurer.

The paper said that, by 2003, it had been agreed that state governments and the federal government would enact legislation to shift from joint and several liability to proportionate liability for economic loss claims founded on lack of reasonable care.

Each Australian state had enacted legislation to bring about this shift in the liability regime, although there were differences between each state’s legislation. In 2009, it had been agreed that the differing proportionate regimes would be harmonised, so that identical regimes would prevail throughout Australia. That effort was continuing but recent indications were that significant differences remained between the regimes in different states.

The commission said that the Australian decision to introduced proportionate liability for economic loss had particular significance for New Zealand, not simply because Australia had a similar legal system and was this country’s neighbouring jurisdiction, but because of CER. The paper noted that firms operating on both sides of the Tasman currently had to work with two different regimes for legal liability. Larger firms – both those which constructed buildings and those which manufactured

building supplies – could benefit from a common liability regime in the two jurisdictions. The document suggested that this would lower legal and administrative costs for such firms, as they would be able to incorporate the advantages of a single liability regime common to both markets into their costing models.

The paper said that the professional services sector, comprising accounting, finance, legal and other professional services, was the second major industry category that would be affected by a reconsideration of the joint and several liability regime.

“Parts of this sector are increasingly dominated by multinational firms with a strong presence on both sides of the Tasman. The banking system in New Zealand is particularly dominated by firms that are predominantly Australian owned and domiciled, although New Zealand subsidiaries may operate more or less autonomously. In Australia, the professional services sector was seen as the principal beneficiary of a shift to proportionate liability across all Australian states. The move to proportionate liability was accompanied by a limit or capping of liability for auditors and other professional advisers. The combined effect of proportionate liability and a maximum limit of liability were intended to provide greater certainty for professionals, especially for the availability and cost of indemnity insurance.”

The paper said that a common trans-Tasman liability regime could bring further benefits for the sector. In theory, the transTasman market for liability insurance could further reduce or help to hold costs down, since insurance companies would not have to account for different liability regimes in their pricing models. Transaction costs should fall as a result of efficiency gains derived from only having to factor in a single pricing model in both countries. The commission said that CER was a relevant consideration for the review and it would welcome submissions addressing the desirability of harmonising the law on liability among multiple defendants.

“Harmonisation would mean that New Zealand would shift to a proportionate liability regime, given that Australia, both in the Commonwealth and the states, made the shift to proportionate liability in 2003.”

The commission went on to review the approaches taken to joint and several liability in other jurisdictions, including the United Kingdom, Canada and the United States. The document concluded that the experience of other common law nations demonstrated that there was no consensus about the best way to approach the issue. Each country was attempting to find the most equitable and efficient balance of burdens between the defendant and the plaintiff, in light both of the law of causation and of the broader social context.

In Chapter 8, the paper examined the economic arguments, noting that much of the debate over the relative merits of joint and several versus proportionate liability was phrased in terms of “fairness.” The commission said that it was often asserted that proportionate liability should be adopted because it would be fairer to multiple defendants as they would each only face their proportionate share of the plaintiff’s loss. The document noted that various hybrid possibilities – such as a rule allowing proportionate liability for the so-called peripheral wrongdoer – could be seen as attempts to achieve some balance between the interests of defendants and the plaintiff in the interests of achieving a relatively fair result.

“There is an alternative approach to analysing the merits of the two liability rules. This alternative concentrates on discovering not which rule would be “fairest” but rather which rule is likely to produce economic efficiency; that is, an optimal allocation of economic resources in society. This approach applies an economics or law and economics framework and insights to compare the likely

effects or incentives that each rule would produce. The efficient rule in the context of civil liability of multiple defendants for negligence will be one which produces due care at the lowest overall cost.”

The commission said that the economic argument demonstrated that particular situations in which deep pockets might emerge deserved to be examined carefully. The arguments did not go so far as to suggest that proportionate liability was the only or even the obvious answer in such cases.

In the final chapter of the paper, titled The case for change, the commission said that it was appropriate to weigh the relative merits of each option when assessing the merits of reform. It said that the current system was geared towards protecting the plaintiff. The principal advantage of joint and several liability was that the party who had been injured did not bear the risk of absent or insolvent defendants.

“This protection rests on the idea that the parties who have actually caused the harm are each fully responsible for the loss, irrespective of their respective contribution to the total loss relative to each other.”

However, the commission said that the drawback of joint and several liability was that contractors or regulators, who bore joint and several liability for losses that they had not themselves directly caused, might become risk-averse. That could increase costs, or reduce the prospects of innovation.

“It has been argued that one of the reasons that New Zealand has high building costs is that large scale builders, especially from Australia, will not enter the market when faced with increased and unpredictable costs for builders stemming from the joint and several liability regime. It has also been suggested that joint and several liability gives territorial authorities strong incentives to be risk averse and may contribute to higher than necessary building costs.”

The commission went on to state that its overall conclusion at this point was that there were not compelling efficiency grounds for proportionate liability.

“Joint and several liability and proportionate liability are equally efficient systems of allocating the total loss. It is certainly true that the two different systems lead to advantages for either the plaintiff or the defendant and therefore significant differences in perceived fairness to one or the other. However, available economic analysis does not show that one system is superior to the other. Instead the choice between the two systems must be based on an overall assessment of who should bear the risks of absent or insolvent defendants.”

The commission said that both systems led to complex litigation, since that was a function of the number of parties which had potentially caused the loss. The paper said that a shift from joint and several liability to proportionate liability could only be justified if there was adequate protection of the plaintiffs’ or the consumers’ interests.

“The commission does not consider that a shift from joint and several liability to proportionate liability could be limited to the building sector. In Australia the shift to proportionate liability first occurred in the building industry in the states of New South Wales and Victoria. However, this was later extended to all negligence/ lack of reasonable care actions claiming economic loss or property damage. We consider that if New Zealand were to make such a shift then it should also be applied universally, to the same range of potential actions. This would have the advantage of harmonising New Zealand law with that of Australia.”

Appendix 2 of the document set out a list of 36 questions for submitters to consider in preparing submissions on the issues paper.

19

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