25 Jul 2012
Review of the Judicature Act
The Law Commission has announced a review of the Judicature Act 1908, which governs the operation of courts in New Zealand. The Commission has released an issues paper setting out some preliminary proposals for reform, and has received submissions and public comment.
While many of the issues relate to broader structural changes to the court system and the process of judicial appointments, some of the proposals are likely to affect the cost of litigation for commercial parties. These are:
Vexatious litigants: as it stands, the High Court can declare someone a vexatious litigant on the application of the Attorney-General and prevent that person from commencing or pursuing a civil proceeding without leave of the court. This power is exercised fairly infrequently, despite evidence that vexatious or potentially vexatious litigants are occupying more court time than before. The Law Commission raises the possibility of a 'graduated system', which would allow parties to ask the court to intervene at an earlier stage and would offer a more proportionate response to vexatious litigants.
Wasted costs: there is presently no statutory scheme for awarding costs against lawyers in civil proceedings, where the conduct of the lawyers themselves results in unnecessary costs for the opposing party and wasted court time. The Law Commission suggests empowering courts to award costs against a party's lawyer where there has been a significant 'procedural failure' on his or her part.
Specialist High Court judges: while the High Court currently operates a commercial list in Auckland and Wellington, the Law Commission raises the possibility of developing this specialisation further through a 'panel system'. This would see judges allocated to one of several specialist panels in addition to their general jurisdiction. In theory, this would increase efficiency in the court system as judges who are familiar with an area of law are likely to hear cases and deliver judgments more quickly.
Interveners: courts presently use their inherent jurisdiction to allow intervention in proceedings by non-parties who do not have a direct stake in the outcome of the case. Where a case involves issues of public importance, interveners may be given an opportunity to address the court so that it is presented with all relevant perspectives. The Law Commission queries whether this process should be more regulated, with clearer guidance on when and how intervention can occur and the extent to which interveners will be liable for costs.
District Court jurisdiction: the District Court can currently hear most claims up to $200,000. The Law Commission asks if this limit should be increased, possibly to $300,000. Any increase would allow more claims to be heard in the District Court, which can offer a more cost-effective and timely resolution. Having said that, some parties may still wish to have their dispute heard in the High Court depending on the issues involved, particularly as the High Court offers a more straightforward summary judgment procedure. At the moment, parties can apply to transfer a proceeding from the District Court to the High Court if the claim exceeds $50,000, although this could change if the District Court jurisdiction increases.
Submissions have now closed, and we expect an update from the Law Commission soon.