Sunday, July 24, 2022

Mike Houlahan: Not just MPs who help shape our laws

Our politicians have been taking a break from making the law over the long winter recess, but that does not mean that lawmaking stops.

Select committees have been meeting, reports are being drafted and reviews of various things are ongoing.

The law is a vast and ever-evolving field, and it sometimes feels like there is a call every day for some new bit of it to be crafted or re-drafted.

Law schools - and Otago has one of the best of them - play an invaluable role in this process, and Otago academics are active in many areas of law reform.

As an example, in late May, with little fanfare, the Law Commission - the independent body which advises the Government on potential law changes or areas which deserve legal review - released its report on class actions and litigation funding.

For this substantial body of work - the final report is 483 pages long - the commission had the assistance of an expert panel, which included the University of Otago’s Dr Bridgette Toy-Cronin.

Dr Toy-Cronin has devoted a substantial portion of her career to examining issues of equity of access to justice, and these subjects of this review were squarely in her wheelhouse.

Class actions, or group litigation, are not uncommon overseas but there is no specific class actions regime as such in New Zealand.

The rules of the High Court do allow them though, as long as an extensive set of criteria are met ... which may explain why the commission’s researchers could only find 47 such cases since the 1880s.

Most of those were litigated this century though, which suggests this is a class of case which is only going to increase.

The reason for the rise in demand is simple: taking a civil case to court takes what is, generally, a prohibitively large amount of money.

For your average homeowner, the cost of a lawyer is a huge and disincentivising cost; for your average defendant - which is most likely to be corporate body or governmental agency - the potential cost of litigation is something to be budgeted for or insured against.

The scales of justice are not at all in balance in cases such as this, hence why a class action, which allows multiple complainants to club together and share the costs, is one way of trying to even things out.

Those who have clubbed together to claim damages for neglect have included people with properties severely damaged by the Canterbury earthquakes, owners of leaky homes and victims of criminal investment advisers.

With the Barry Kloogh fraud case still a raw and recent memory for many Otago and Southland investors, it would not be a surprise if those innocent people who have found themselves collectively $15 million or so out of pocket were lining up to join this unwanted legal club.

If taken up by the government with any urgency, the commission’s recommendations - just the 106 of which relate to class actions - might be in time to help them.

An allied field to class actions is litigation funding, again a well-established phenomenon overseas but not so common in New Zealand.

In simple terms, litigation funding is a legal bet: the funder will pay for the claimant’s lawyers in the expectation it will recoup its investment from any damages or compensation received.

It is even more of a gamble due to the fact that it is not specifically regulated in New Zealand and, as the report makes clear, there is more than reasonable doubt whether our law even permits it.

Not only does that make such funding hard for cash-strapped potential claimants to access, it might also mean that they would not be adequately protected against the risks of something going wrong.

The report, sensibly, comes down on the side of allowing funded litigation, but it wants considerable protections put in place first, such as the court needing to see and approve the funding agreement and rules being put in place to confirm what happens if things go wrong for the plaintiffs and costs are awarded.

While Dr Toy-Cronin’s work has ended, that of her Otago colleague Prof Andrew Geddis is just beginning.

Again in May, Prof Geddis and an expert panel were commissioned by then Justice Minister Kris Faafoi to review New Zealand’s electoral law.

Unsurprisingly, any potential changes to electoral law make politicians antsy, hence the panel was appointed through a bipartisan process, as were its terms of reference.

Its final report is not due back until the end of next year so the bulk of its work will, if adopted, result in law changes for the 2026 general election rather than for that scheduled for next year.

It is a broad topic, and well-seeded with potential landmines: the panel will consider topics such as the voting age (a topic already being heard by our Supreme Court), overseas voting, political party funding, the length of the parliamentary term and various contentious issues involving our MMP electoral system.

Fraught stuff indeed, and Prof Geddis and co can expect their work to be extensively examined by interested parties, pun intended.

Although almost all of the Electoral Act can be amended or repealed by a simple majority vote, successive governments have, generally, been cautious about doing so without support from opposition parties - being accused of screwing the electoral scrum to suit yourself tends not to be approved of by the voting public.

Despite that, the Government is already nibbling away at various corners of electoral law, such as eligibility to swap between the Maori and general rolls, and reform of the murky rules covering donations to political parties.

As former Otago academic Dr Bryce Edwards pointed out this week, the Ministry of Justice wanted to keep public submissions on the donations review undisclosed until after Cabinet considered them.

An Ombudsman complaint later, Dr Edwards has most, but not all, of the submissions.

Critically, those from three political parties - i.e. ones that the public almost certainly has an interest in knowing about - remain unreleased, on the grounds that they were made with an expectation of confidentiality.

The rigour of Dr Edwards, and press gallery journalists who have also sought this information, raise legitimate concerns about political transparency, and their tenacity is to be applauded.

Mike is a political reporter for the Otago Daily Times. This article was first published HERE

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