Craig LizDr LIZ CRAIG (Labour): Thank you Mr Speaker. It's a real pleasure to speak on the second reading of the Arbitration Amendment Bill. This bill is incredibly technical in nature and because I didn't sit on the select committee that heard all the submissions about the bill or was not part of the deliberations I'm going to keep my comments to be quite high level.Just thinking about arbitration and the differences between arbitration and going through full court proceedings there is a number of issues relevant to that which are highlighted in this bill. I think the first one is that parties can choose their own arbitrator and I think that's really important in terms of having somebody who understands the technical nature of the disputes that you're involved in. And this bill touches on some of those aspects to make them a fairer process. The second thing is that often disputes can be resolved much more quickly by arbitration than by waiting for the full court process to work its way through. And the third thing is that arbitration is usually conducted in private while court proceedings are generally not and that's something again that this bill touches on in particular. It's really important when you're dealing with disputes of a commercial nature to be able to have many of those considerations deliberated on in private. Finally arbitration has that added advantage that it reduces the pressure on our stretched courts system because it allows a lot of disputes just to be settled via arbitration as opposed to taking up that valuable court time.Labour supported this bill to select committee because we felt that it did make some big improvements to the arbitration framework; however what we did signal quite early on at the first reading was that we had a number of concerns particularly about the changes that were being proposed to the confidentiality of those court proceedings. We wanted to be able to spend that time during the select committee process hearing from submitters and considering what the best way forward was in that area. There were a number of changes to the original bill that were made during the select committee and so Labour members are happy to support the bill in the amended form. And so what I just want to do is go through in a bit more detail some of those key aspects and I think the first and most important one relates to making sure that we have retained that open justice.As I was saying the default in arbitration is that those proceedings are conducted in private and that's really important when you've got parties talking about disputes of a commercial nature. People need to be able to get on and do that. However the issue is that once arbitration is elevated to courts then the default is that the proceedings are conducted in public although either party could apply for some or all of those proceedings to be again heard in private. So clause 5 of the bill what it was hoping to do was extend that presumption of confidentiality through to court proceedings related to arbitration and this was one of the things that was mentioned as a way of then making it much more attractive for people internationally to come to New Zealand in terms of having arbitration. What this bill basically then tried to do was reverse the presumption that proceedings should be happening in public. What it just said is that it allowed the court to make a direction regarding how that information would be published and making that much more restrictive.The problem we've got is that that goes against the principle of open justice because the public need to know one what the law is and then secondly they need to know how it's being applied. Basically what you've actually got under the current provisions is that there is still flexibility in that respect because while the presumption is that the proceedings will be heard in public it still allows a court order for whole or part of the proceedings to be conducted in private if it is believed that the public interest is outweighed by the interests of any of the parties involved. And so it was the view of Labour members that the current legislation did strike the right balance between open justice and the private nature of that legislative process. We were considering whether extending that presumption of confidentiality to court proceedings would make New Zealand an international hub for arbitration and basically I think the feeling of the Labour members was that it wasn't sufficient of an advantage to displace the presumption of open justice in Labour members' views and so we were keen to preserve that open justice. There's a couple of other things that the bill does do however that have been retained and one was reducing the possibility of late jurisdictional challenges. What the bill does is insert additional clauses and what we're trying to do here is reduce the possibility that a party could raise a late procedural challenge on jurisdictional grounds which could invalidate the award after both parties have spent a lot of time and expense arriving at it—if they were sensing that that award was not going to go in their favour. So what this bill does is it inserts clauses that talk about this and there were some minor changes to the wording which happened as a result of the select committee deliberations. Basically now the clause states that failure to pursue a request made under paragraph (3) in a timely manner operates as a waiver of any right to later object to a ruling of the arbitral tribunal as to its jurisdiction." That's really important; people need to know that they're committed to that whole process and that somebody can't pull out quite far down the line after all that expense has been put in.The other one that was looked at was the process for the appointment of arbitrators and the committee considered some of the issues around the appointment process because selecting who is going to do that arbitration is one of the key parts of the process. So at present there's a clause in Schedule 2 that sets out the default process if people can't agree and it's often called the "quick draw" procedure and what that means is that one party can trigger a process to appoint an arbitrator if the other party fails to respond to communications within seven days. The select committee received quite a lot of strong submissions that that particular clause should be repealed and while it's not in the amended bill what the committee recommended was that a new clause should be inserted when we get to the committee of the whole House stage that would effect those changes. It was felt that it was really important that we didn't have that "quick draw" procedure meaning that there wasn't that consensus on who should be doing the arbitration. There are a whole lot of other aspects that were covered in the bill around trusts and other technical matters but I've tried to highlight what I thought were the three sorts of key important ones.So just in summary arbitration is really really important as a way of working our way through disputes of a commercial or other nature and what we were keen to see was a number of improvements around that to make that a better process. So what we've done is introduce the clauses which reduce the possibility of having late procedural challenges just on jurisdictional grounds—around where people have invested a lot of time and money and process into that process to date. And also while the change hasn't been put into the amended bill the expectation is that once we get to the committee of the whole House stage further changes would be made including addressing that "quick draw" procedure so that there is a bit more of a consensus around the selection of arbitrators.Finally the bill as amended still preserves the principle of open justice and ensuring that the public knows what the law is and how it's being applied and so what it does is retain the assumption that when arbitration ends up in court the proceedings will be heard in public. So this is an important bill and I commend this bill to the House. Thank you."