Adams Amy: Limitation Bill — First Reading 
Adams Amy: Limitation Bill — First Reading 
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AMY ADAMS (National—Selwyn) 
: 
 It is my privilege this afternoon to take a call in support of the first reading of the Limitation Bill. I think it is fair to say that the Limitation Bill is the sort of law that perhaps lawyers become most excited about because we recognise the extreme importance of some framework legislation like this to put in place the rules around bringing these sorts of claims. As the Minister and the Hon David Parker have already said it is a difficult exercise and one that I do not think any lawyer would suggest there is an easy answer to in terms of getting the balance right. 
 This bill is about balancing the entitlement of wronged people in society to bring a civil claim and their entitlement to do that without loss while also recognising there is a real prejudice to defendants who are forced to defend claims well after the event. That is an issue that we do battle with on almost a day-to-day basis in legal practice and I can think of many occasions where we have been grappling with those very issues: when does the limitation period start is the claim statute barred and how do we work that out? The whole point of legislation like this is to set clear parameters and I think that one thing we will hear general consensus on is that the current 1950 Act is not terribly clear. We all support its principles; we all support what it is trying to achieve. But I think three Law Commission reports and the general feeling in this House will convey that it is time for a change a restatement and a comprehensive relook at the rules that make up our limitation requirements. I am very pleased to see this bill in front of the House today. I think it is a fundamentally important piece of law although as I have already said I think it is one that perhaps the average man on the Clapham omnibus will not get terribly excited about. 
As I have already said this bill replaces in whole the 1950 Act and provides a comprehensive one-stop restatement of limitation measures. In doing that the bill is not seeking to reinvent the wheel in that it will provide some consistency around what those limits fundamentally are and it will not depart from the general principle as much as we can state it at the moment that in essence people have 6 years to bring a claim. That is an easy statement and when we say it quickly it sounds straightforward. But the difficulties have always really started in respect of when the starting point is. The Minister in his first reading address has already talked about the difficulties of determining the prior trigger the point at which the cause of action accrued. That brings in some very difficult legal issues and a fair amount of legal knowledge but even if people had that sort of legal knowledge they would get into some quite complex time-consuming and very uncertain debates around the timing of when a cause of action accrued. 
I will throw up a couple of examples. There is some famous case law around negligence in the building of a very tall brick smokestack. There was negligence by the builder in constructing it. Unfortunately that negligence did not show up for many years until the thing fell down. But short of climbing up ladders and getting it inspected from the ground up on the day it was handed over it was very difficult for the people who commissioned the smokestack to be statute barred for something they would have had no knowledge of until the thing hit the ground and until the after-the-fact analysis showed that the collapse was due to the negligence of the builder. So these were the sorts of inequities people were seeing and they would get into arguments about whether the cause of action accrued at the time the bricklayer was negligent or at some time after that. That evolved into the even more complicated doctrine of reasonable discoverability which frankly probably made the waters muddier rather than clearer. 
Similarly we can imagine a situation where a contract has been prepared by lawyers but it is not until some years down the track when it has all turned to custard and the parties have found they are at each other’s throats that they pull out the contract only to find there is a significant error. But if the time is 6 years after the contract has been drafted then the people will have some real issues about whether the negligent drafter is off the hook. These are some of the issues that have to be grappled with and it is not actually that easy when we start getting into it to assess the right place to put that balance. I will be very interested to see what the select committee decides in terms of this legislation and whether that balance as now framed is appropriate. It is an excellent start. 
I am particularly interested in the late-notice period replacing the reasonable discoverability test and the circumstances in which that will apply. Like the Hon David Parker I think that the 3-year limit even with the late knowledge provision still has to have some drop-dead time frames so that even if a late knowledge system applies people cannot be exempted entirely from limitation rules. I think it is very sensible that we will have a principal period of 6 years that is subject to a late knowledge exemption which will itself be subject to a 3-year drop-dead time frame. Similarly even with those sorts of provisions in place I think we would be doing defendants a disservice if there was not an ultimate longstop period to the claims and this bill provides for a longstop period of 15 years. I think that is important because if people are carrying out their business and going through their business indemnity insurance provisions it is very difficult when sitting down with insurers for them to work out where their liabilities and contingent liabilities start and stop when they are in any sort of trade or service. Under this bill people in business will have reasonable ability whatever else happens to believe that 15 years on they are reasonably free and clear. So they can carry run-on insurance for any services provided for a period of 15 years with pretty much total confidence in the fact that 15 years will mark a full stop to any liabilities in that prior period. I do not want to move away from the principal focus which is the 6-year frame. That is the frame we have now but as I have said we have much more clarity around when it starts what claims it will apply to and what the exceptions to it are. 
The other point to note is that there are some other exceptions we have to take into account. One is in respect of sexual abuse claims of minors. I think we are all aware that there are some very difficult issues around that issue; we would not want to ensure that we go so far as to deny people proper access to justice but we have to bear in mind that this provision applies to civil claims and not to criminal ones. 
The other thing I think worth mentioning in respect of this bill is the way it operates which is that it effectively provides a defence. So if a claim is filed against a person he or she can apply this legislation as a defence on the grounds that the claim would be statute barred pursuant to the Act if the claim transgressed it. If there was any dispute then as to whether the provisions and the tests of the legislation were being met that could be worked through and if the court was satisfied then that would provide a complete defence to the claim. 
I have talked about some of the exceptions for sexual abuse of minors. I will also take up another point around minors in a general contractual sense. My understanding of the Limitation Act of 1950 is that previously the limitation period could not start to run until the contracting party was 20. Under the amended legislation the period will start to run from when the contracting party is 18. Once again I think that fits in neatly with the Minors’ Contracts Act framework and parties contracting with minors are aware that minors have reduced legal capacity before that time. This bill fits nicely into that framework so that the limitation will run from the time at which minors are considered to have full knowledge of their claims and full ability to act on their rights. 
We are also aware that the bill will set up a different schedule for money claims as opposed to non-money claims. I want to highlight the point the Minister made in his first reading speech because I think it is an important point. This new bill if passed will apply only to new acts and omissions that occur after the bill’s commencement date which is 30 June 2010. So any litigation that commences in the future if it still relates to an act or omission predating this bill will still be under the prior law and I think that is important for consistency and to ensure that parties have the arrangements they thought they would have in this respect at the time they entered into their contract. But we will see this bill starting to apply to new acts or omissions after the date the bill comes into force. 
Just in closing I think it is worth nothing that the court will retain an ability to have a discretionary waiver of some of these provisions if it believes that the incapacity of one of the parties makes that fair and just and I think that is entirely appropriate. So I am very very pleased to see that this important area of law is now being tidied up as it deserves to be. It has taken three Law Commission reports to get there. We now have a very comprehensive piece of work. I am looking forward to seeing the select committee work through its processes in hearing submissions. I am very pleased as I say to see this bill before the House. It is an important area of law and I commend it to the House. Thank you.