Courts Propose Fundamental Changes to Civil Litigation in New Zealand

29 November 2022

The Rules Committee issued a sweeping report last week recommending fundamental changes to how civil litigation is conducted in New Zealand. The Committee’s recommendations will have significant implications for commercial parties who use the New Zealand courts to resolve disputes.

How did we get here?

The Rules Committee launched a review of the courts’ rules in 2019, with a view to improving access to justice. It has released three consultation papers since then, with each paper proposing a series of reforms. In a further report issued last week, the Committee has adopted some of the reforms that it proposed earlier, as well as recommending a number of new reforms.

The recommendations span the High Court, the District Court and the Disputes Tribunal.

What is proposed for the High Court?

The Committee says that its proposals are intended to “significantly change” how litigation is conducted in the High Court.  The key changes are as follows:

  • Briefs of evidence will be replaced by witness statements, which are intended to be more limited in scope and closer in format to the old practice of “will say” statements.
  • Witness statements will be served at a much earlier stage of the proceeding. Most importantly, they will be served before the parties have provided discovery, rather than after discovery (as is now the case).
  • Discovery will not be abolished, as the Committee had previously proposed. Discovery will still be available, but will be considered later in the proceeding.
  • Initial disclosure (at the time of filing the claim or defence) will be expanded to include a requirement to provide adverse documents. Parties will not be required to search for adverse documents, but they will be required to disclose known adverse documents.
  • There will be a greater use of Judicial Issues Conferences, but these will come later in the proceeding than under the current Rules.
  • Interlocutory hearings will not be dealt with on the papers (as the Committee had proposed), but will presumptively be heard by video rather than in person.
  • There will be a limit of one expert per speciality, with experts required to engage in a joint conferral before trial (which would, to some extent, formalise existing practices and expectations).
  • Documents in the agreed trial bundle will be admissible as to the truth of their contents, as opposed to the current position, which requires witnesses to give that evidence.
What is proposed for the District Court?

The Committee concluded that there has been a “loss of confidence” in the District Court. The Committee observed that the Court lacks sufficient resources, does not have enough expertise and experience, and takes too long to deal with civil cases.

The Committee does not propose any significant changes to the District Court Rules. Instead, the key proposals are as follows:

  • A new Civil Division will be created, headed by a new Principal Civil District Court Judge.
  • The Court staff’s expertise in civil matters will be strengthened.
  • A more inquisitorial process will not be adopted, as previously proposed by the Committee.
  • A new pre-action protocol will be introduced for debt claims, which will need to be complied with before a debt recovery claim can be brought. The details of these pre‑action protocols remain to be developed.  However, based on indications from the Committee and overseas precedent, the protocols might involve warning creditors or even attempting to agree a payment plan.
What is proposed for the Disputes Tribunal?

In the Disputes Tribunal, the Committee recommended:

  • The Tribunal will be allowed to consider disputes of a value up to $70,000, a significant increase from the current limit of $30,000.
  • The Tribunal’s jurisdiction, which allows it to override the law if the “justice of the case” warrants doing so, will be amended to make it clear that the override only applies in rare cases where applying the law would result in “substantial injustice”.
  • Referees will be renamed adjudicators and will need to be legally qualified.
  • However, the parties will not be entitled to be legally represented in the Tribunal.
  • The parties will have a right of appeal to the District Court for awards over $30,000
Our view

The Committee’s reforms are far-reaching, and address important goals. We support the Committee’s work to improve access to justice, and to reduce unnecessary cost and delays.

However, we have concerns that some of the proposed High Court reforms may not achieve their intended outcomes, and that some of the proposals may lead to greater cost and delay, rather than less. We also consider it important to ensure that the rules continue to allow parties to be given a full opportunity to put their case and to test the opposing party’s case.

We welcome the proposed focus on strengthening the District Court’s civil jurisdiction. We note, for example, the Committee’s concerning observation that it takes an average of more than six months to determine an undefended summary judgment application in the District Court, and nearly a year to determine a defended summary judgment application. Increasing the civil capacity of the District Court will be a beneficial development. We are, however, concerned that the pre-action protocol for debt claims in the District Court may increase the costs of debt enforcement in the District Court.

As some of the Committee’s recommendations are new and have not been previously consulted on, the Committee is proposing a further round of consultation. It has asked for further submissions to be provided by 24 February 2023. We will be making further submissions, and we encourage all businesses and individuals who participate in, or who are affected by, civil litigation processes to also make a further submission.

Please contact our team if you would like any assistance, or your usual Bell Gully adviser.

Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.