Arbitration Amendment Bill — In Committee 
Arbitration Amendment Bill — In Committee 
[Volume:639;Page:9774] 
Arbitration Amendment Bill 
In Committee 
Part 1 Amendments to principal Act 
CHRISTOPHER FINLAYSON (National) 
: 
 This bill is one of three bills that are the responsibility of that rising star of the Labour Cabinet the Hon Clayton Cosgrove. The first of these is the Arbitration Amendment Bill and I want to say something about the report of the Justice and Electoral Committee. Of course if the Minister is the rising star of the Labour Party it says a lot about the state of the Labour Party. 
Let me first deal with the issue which is referred to in the report about the control of the arbitral tribunal in relation to witness subpoenas. We thought on reflection that clause 8(1) should be deleted from the bill. The clause is intending to amend article 27(1) of schedule 1 of the Arbitration Act and in particular the issue is whether the words “with the approval of the arbitral tribunal” should be deleted. Article 27(1) provides that the arbitral tribunal or a party with the approval of the tribunal is able to request from the court assistance in the taking of evidence and the court may execute the request within its competence and according to its rules on taking of evidence. 
The bill had suggested initially that the phrase “with the approval of the arbitral tribunal” should be deleted but the select committee having heard evidence on this thought the clause should remain as it is because we consider it important that the parties be required to seek approval of the tribunal before they go to the court. The very good reason for that is that it enhances the tribunal’s control over the arbitration process and maintains current practice. So that is the reason why the committee thought that clause 8(1) should be deleted. 
During the course of the submissions we were very lucky to receive extensive submissions from Mr David Williams QC an eminent arbitrator both domestically and internationally in this country. He dealt with the issue of interim measures. It was very fortuitous at the time this bill was being dealt with in the select committee that the United Nations Commission on International Trade Law (UNCITRAL) had just published proposals for dealing with interim measures and that is why it was timely for us to bring into the bill the proposed changes to article 17 of the model law. 
Article 17 as it is currently framed is particularly brief. It simply states that the arbitral tribunal may order interim measures and it provides very little guidance. Well UNCITRAL has got together and proposed a number of changes to elaborate on the powers of the tribunal when dealing with interim measures and these are set out in chapter 4A. So section 17 in clause 8 provides very detailed definitions of what interim measures are. They are very similar in effect to interim injunctions which may be granted by the court; both interim injunctions freezing orders—or Mareva injunctions—and Anton Piller orders and they are very adequately defined. 
Then section 17B in clause 8 sets out the conditions for the granting of interim measures which are very like the powers of the court when granting interim injunctions. One of the provisions that is quite important is section 17C in clause 8 which states that the arbitral tribunal may issue a preliminary order and that a party may without notice to any other party apply for such a preliminary order. 
The National Party supports these provisions and thinks they are very sensible. In fact one of the discussions we had in the select committee was about whether these were the kinds of changes that could be brought into the domestic law of New Zealand without the need for parliamentary sanction and whether they could be dealt with by way of regulation or rule. Having obtained the advice of the Clerk of the House however we decided that notwithstanding that UNCITRAL will come up with changes to the model law from time to time it is appropriate for parliamentary sanction to be obtained before the domestic law of New Zealand is changed. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
CHRISTOPHER FINLAYSON 
: I will be fairly brief because I have only a couple of— 
Hon Clayton Cosgrove 
: Take your time. 
CHRISTOPHER FINLAYSON 
: The Minister in the chair the Hon Clayton Cosgrove tells me to take my time. I have only a couple of matters to refer to. Before the dinner break I said something about the control of the tribunal in relation to witness subpoenas and I had begun an analysis of the changes proposed in the bill to deal with interim measures. 
As the report of the Justice and Electoral Committee states some detail is provided as to how and when parties may seek interim measures the conditions for granting them and the power of the tribunal and there is an important provision about the ability of the tribunal to require the applicant for an interim measure to provide appropriate security in connection with the measure and that is set out in section 17I in clause 8. The select committee was very happy to bring those measures into the bill. As I said before the dinner break it was very timely that at the very time the select committee was dealing with this amendment legislation the United Nations Commission of International Trade Law produced some proposed changes to the model law. 
The third matter I want to touch on briefly is the default procedure for appointment of arbitrators. Again we proposed that clause 9(2) be omitted from the bill. Clause 9(2) deals with the default procedure for the appointment of arbitrators. Essentially it had proposed amending clause 1 of schedule 2 to the primary legislation. The second schedule of the Act provides certain additional optional rules that apply to arbitration and clause 1 deals with the default appointment of arbitrators. Essentially we are saying that the existing clause is adequate and that we do not see the need for the changes proposed in the bill. Therefore subclauses (1) and (2) of clause 9 have been struck out. 
That is all I want to say at this stage. I will deal with some of the substantive matters proposed in the bill when we deal with the purpose clause and the title. But those were the primary decisions made by the committee for changes to the bill—as I said dealing with subpoenas interim measures and the default procedure for the appointment of arbitrators—and I think we have a better bill as a result. 
CHARLES CHAUVEL (Labour) 
: 
 I think that the matters I ought to comment on concerning the relevant part of the bill are the provisions addressed by the previous speaker. I may deal with them from a slightly different angle and I will start with clause 8(1) which amends schedule 1. 
As is apparent from the report of the Justice and Electoral Committee the Law Commission recommended an amendment to schedule 1 to the effect that when a party wishes to seek the court’s assistance—for example in the event that a subpoena is required to be issued during the arbitration or prior to it for the purpose of ensuring that the arbitral tribunal can be seized of evidence required—it will no longer be required to seek the consent of the arbitral tribunal first. 
We heard from the Arbitrators and Mediators Institute of New Zealand and in passing I pay tribute to the submission it made. It was very helpful and comprehensive as one would expect given the experience of the members of that body in dealing with alternative dispute resolution. The institute did not support the proposed amendment because it felt it would undesirably remove control of the arbitral process from the arbitrator and instead see it vested in either the High Court or the District Court as the case may be. 
The institute pointed out that in practice the arbitral tribunal ought to be able to resolve any issues regarding evidence and witnesses without the need for further action. Having taken the advice of officials on the institute’s submission we agreed that the proposed amendment should be withdrawn. The original amendment’s effect would have been to reduce undesirably the control the arbitral tribunal has over the process and contrary to the general aims of the legislation would have provided for undesirably easy access to the courts during the process. We felt that would have been truly at odds with the principle of reduced judicial involvement which was intended to be a theme in the original Act and was one that we wanted to make sure was carried through in the current legislation. 
I refer to the point of arbitral tribunals and the control they can exercise over proceedings. Clearly the arbitral tribunal ought to determine the hearing date and the length of time it would take to complete the hearing. We felt that if a party had trouble during the process in obtaining evidence or getting witnesses to the hearing then the requirement to approach the arbitral tribunal first would ensure that that tribunal would be able to have better control over the issue of whether the hearing would proceed on the agreed commencement date. Without that control clearly it would be more difficult for the tribunal truly to be seized of control over the proceedings. There did not seem to be the justification for outside oversight at that early stage of a procedural matter such as being able to compel a witness to attend because a party felt it was necessary. 
I turn now to clause 8 and the amendments to the model law and again refer to the submission from the Arbitrators and Mediators Institute of New Zealand presented by David Williams QC. As the previous speaker mentioned he alerted the committee to recent changes to the model law on international commercial arbitration. This model law of course was the measure on which the original 1996 bill was based. Mr Williams recommended to us on behalf of the institute that the recently approved changes to the model law should be incorporated into the bill. 
We agreed with the incorporation of those provisions in the model law. We did feel though that it was a little unfortunate that we continually have to update procedural legislation such as the matters that have been dealt with by the committee on the model law by having to revert to the House through primary legislation. We felt certainly in the initial stages of our consideration that there ought to be a mechanism by which these sorts of things could be dealt with—perhaps by sub-delegated legislation considered very closely by the Regulations Review Committee and subject to the disallowance procedure. But we were advised by officials that this was seen as undesirable constitutionally largely as far as I can recall because New Zealand does not tend to adopt all the model law recommendations. 
We tend to pick and choose—and I do have a view about the desirability of that. I rather think that if an international body of experts is effectively recommending model legislation then little old New Zealand may be well advised with all the time that goes into the international deliberations simply to adopt that which we have chosen to become a party to. I accept that perhaps it is too early in our constitutional evolution to move to this sort of procedure. Perhaps I might live to see us one day doing something a little more mature with international legislation. In the end on the advice of officials we felt that adopting the recent changes to the model law would be consistent with the aim and purpose of the bill. 
 Those are relatively minor changes. Essentially they keep the model law up to date to meet the needs of its users and reflect best practice in the field of international arbitration. This brings us back again to the basic principles of the 1996 Act which we have tried to retain in this re-enactment such as consistency with the laws in other jurisdictions which after all is why we adopted the model law in the first place. Clearly following through and adopting the changes to the model law that were agreed to recently and advised to us by David Williams QC would maintain that consistency. 
Briefly to speak to what those changes are they relate to interim measures preliminary orders and security for costs. The amendments on interim measures provide more detail and guidance than is currently found in the legislation. Clearly incorporating those changes will allow more guidance to the parties so that where an arbitration is on foot they have a code to refer to in the schedule that helps them to know exactly how they should conduct the arbitration. 
The amendments also deal with the introduction of preliminary orders. I suppose an analogy in the ordinary jurisdiction would be with interim injunctions or declarations. There is a bridging device mechanism if you like for a party seeking an interim measure so that remedies are not destroyed while the arbitration either is waiting to be set down or is on foot. Remedies can be preserved through these procedures just as interim orders— Mareva injunctions and so on—in the ordinary courts would be able to be applied for. Security for costs is expressly included as an interim measure. 
I turn now to clause 9(2)—the amendments to schedule 2. The Law Commission recommended the removal from that schedule of a default procedure for the appointment of an arbitrator where the parties had signed up to an agreement allowing for the appointment of an arbitrator in the event of a dispute but failed to provide at that stage for the identity of the arbitrator or for a method of determining that question. 
The Arbitrators and Mediators Institute of New Zealand did not support the removal of the default appointment because it did not feel based on its knowledge of alternative dispute resolution practice that its existence was creating any sort of problem in reality. So we agreed with the recommendation of the officials that the proposed amendment should be withdrawn. The Law Commission noted in it report and the Arbitrators and Mediators Institute of New Zealand noted in its submission that there is little concern expressed by those in the arbitration arena that a significant problem with the default procedure exists in practice. The Law Commission’s concern with the default procedure has been significantly ameliorated by a recent High Court case—that is  
Hitex 
 Plastering Ltd v Santa Barbara Homes Ltd 
. Obviously parties are currently free simply to avoid the default procedure in schedule 2 by expressly providing for a procedure in their own arbitration agreement and the replacement of the default procedure with recourse to the High Court would have been at odds with the aim of reducing judicial intervention in the arbitration process. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I am pleased to make a contribution to the Arbitration Amendment Bill and I was also quite pleased to listen to the contributions of both my own colleague Chris Finlayson and Charles Chauvel. Clearly they are two practising artists in the field— 
Hon Clayton Cosgrove 
: Artists! 
Hon GEORGINA TE HEUHEU 
: —of law and they are pretty knowledgable on the provisions that this bill deals with. 
The bill seeks to make improvements to the Arbitration Act 1996 in order to encourage the use of arbitration as a means of resolving disputes privately in New Zealand. That is always a good move possibly to save cluttering up our clogged-up judicial system. The improvements reflect the underlying themes of that Act which are party autonomy reduced involvement in the arbitral process consistency with laws in other jurisdictions and increased powers for the arbitral tribunal. 
Having listened to the previous two contributions it is clear that the bill covers changes that will try to achieve those things. Both speakers have been through the changes that the Justice and Electoral Committee made in respect of the control of the arbitral tribunal in relation to witness subpoenas and to adopting provisions of the model law on universal commercial arbitration; also in particular to interim measures and to the default procedure for the appointment of arbitrators.  
I will make just a few comments on clause 8 which substitutes a new chapter 4A into schedule 1 of the Arbitration Act. It contains articles dealing with interim measures. I was also interested to hear that eminent lawyer David Williams came before the committee to give advice on the model law and that the committee then decided not to adopt it holus-bolus. I certainly appreciated Charles Chauvel’s discussion on when the day will eventually come that we might feel mature enough in our standing constitutionally to be able to adopt this kind of model law as is. But for the moment the select committee saw fit basically to adopt the provisions but not holus-bolus the model law. 
Articles 17A and 17B deal with interim measures. These are somewhat like interim injunctions. The arbitral tribunal is given the power to grant interim measures. Article 17B(1) states the conditions that are set out for the granting of the interim measures along the lines that the tribunal must be satisfied that “(a) harm not adequately reparable by an award of damages is likely to result if the measure is not granted; and (b) the harm substantially outweighs the harm that is likely to result to the respondent if the measure is granted; and (c) there is a reasonable possibility that the applicant will succeed on the merits of the claim.” when an application for an interim measure is made. That seems very reasonable as well. In making some revisions to the Arbitration Act 1996 I think it is definitely an improvement that these provisions are included. 
Articles 17C and 17D also deal with preliminary orders where the arbitral tribunal has the power to issue preliminary orders and the conditions for issuing such orders are also included. For instance a tribunal may issue a preliminary order if it considers that prior disclosure of a request for the interim measure to the respondent risks frustrating the purpose of the measure and an applicant for a preliminary order must satisfy the tribunal of the matters specified in article 17B which deals with the conditions for granting interim measures. So all in all very reasonable amendments have been made by the committee. 
NICKY WAGNER (National) 
: 
 I rise to speak to Part 1 of the Arbitration Amendment Bill. It deals with two major issues: confidentiality and consumer arbitration agreements. Because arbitration is usually for private commercial or contractual disputes confidentiality is one of arbitration’s major attractions and some amendments were needed here. There is now a new definition of “confidential information”. Confidential information covers information relating to arbitral proceedings and any award made in those proceedings and it includes statements pleadings submissions and other information. It also includes evidence whether written or oral any notes concerning that evidence and the awards and the rulings of the arbitral tribunal. 
 Part 1 also includes new default provisions concerning privacy in that an arbitral tribunal must conduct proceedings in private and only persons who have some connection with the process are normally allowed to attend a hearing unless the parties agree otherwise. Both those provisions really only confirm existing practice. Parties to arbitration agreements must not disclose confidential information except in certain specific circumstances. Those circumstances are listed and they include disclosure to a professional or other adviser of any party or when required to do so by court order or subpoena. 
It is also possible for an arbitral tribunal and the High Court to make an order to allow disclosure of confidential information under limited circumstances. In the case of the High Court that can be done only if the court can be satisfied that in the particular case the public interest in preserving confidentiality is outweighed by other considerations. The High Court can also make an order prohibiting disclosure. In a restatement of the open justice principle the court must conduct all proceedings under the Act in public unless the court makes an order to do so in private. The bill also details under what conditions the court can make an order for confidential proceedings and the effects of any such order. It should be noted that those are all default provisions and that if the parties agree to other conditions in writing the default provisions do not apply. 
Part 1 also focuses on the consumer and on consumer arbitration agreements. The bill includes specific provisions that apply when one party is in trade and the other party is a consumer. The Act recognises that at times arbitration provisions can work to disadvantage the consumer so the bill seeks to protect the genuinely uninformed consumer. With that in mind I point out that the word “consumer” has also been redefined. In the past the definition was broad and it included schools churches and local authorities. With the present changes a consumer is an individual who is not in trade and that makes good sense. 
The existing law allows arbitration to be used only if the consumer signs a separate agreement agreeing to arbitration at the same time as the contract is entered into. That has become a routine and more often than not the consumer gives it very little thought. The bill now provides that consumers are allowed to decide whether they want to agree to arbitration after a dispute has arisen. So arbitration can proceed only if both parties agree. I believe that is the best course of action because having two willing parties to an arbitration will improve the success rate of the process. To do this there has to be a further technical tweak which removes the jurisdiction of the disputes tribunal where a consumer and a business enterprise execute an arbitration agreement. Thank you. 
Hon GEORGINA TE HEUHEU (National) 
: 
 For the benefit of those listening I want to give just a reminder of the main provisions of the Arbitration Amendment Bill. Of course these provisions arise from recommendations of the New Zealand Law Commission in 2003. I have already covered the underlying themes and these themes continue those of the Arbitration Act. I will make reference to the issues of new section 14A “Arbitral proceedings must be private”. These are very important amendments and obviously no changes should be made to them; they fall totally in line with the themes of the Act itself. New section 14B is entitled “Arbitration agreements deemed to prohibit disclosure of confidential information”. The interpretation clause covers the definition of “confidential information” in relation to arbitral proceedings as being “information that relates to the … proceedings or to an award …”. They include statement of claims; statement of defence—the pleadings—any evidence supplied to the arbitral tribunal whether documentary or otherwise; any notes made by the arbitral tribunal of oral evidence or submissions given before the tribunal; any transcript of oral evidence or submissions; any rulings of the tribunal; and any award of the tribunal. That is a very important provision and it is all geared no doubt towards encouraging the participation of parties in the process which is seen to be a private way of dealing with matters and minimising approaches to the judicial system. 
There is not a blanket ruling on the disclosure of confidential information. There will be times when there are limits placed on that prohibition and the tribunal itself under new section 14D is also given the power to allow disclosure of confidential information but only in “certain circumstances” which are set out as follows: if a question arises as to whether confidential information should be disclosed other than as authorised and if at least one of the parties agrees to refer that question to the tribunal concerned. 
As I say these provisions are geared towards encouraging participation to make sure there is consistency with laws in other jurisdictions and to increase powers for the tribunal to get participation. 
The only other matter that I will refer to has been reasonably well covered already by colleagues and that matter is the issue dealt with at the beginning of the debate: the control of the tribunal in relation to witness subpoenas. Here one can see the Justice and Electoral Committee at work. The committee recommended that clause 8(1) be deleted. That clause deals with the subpoenas and proposes to amend article 27(1) of schedule 1 of the Act “so that when a party seeks the court’s assistance to take evidence that party will no longer be required to first seek the approval of the arbitral tribunal.” The committee recommended the removal of the clause because it considered it important that parties be required to seek approval on the basis that this would enhance the tribunal’s control over the arbitration process and also maintain current practice. 
All in all I say these are very good provisions and very good amendments recommended by the committee and I am pleased to have made this contribution. 
CHRISTOPHER FINLAYSON (National) 
: 
 I just want to say something about Part 1 and the issue of confidential information. This issue really is at the very heart of the Arbitration Amendment Bill and it deserves more than a cursory overview when we debate the title. 
There are various types of dispute resolution. There are resolutions of matters that may be heard in court—the District Court or the High Court—and the general principle with those types of proceedings is that they must be conducted in public. The old maxim says that not only should justice be done but justice should be seen to be done. That is why with very few exceptions court proceedings are held in open court and members of the public are entitled to be present. 
A lot of people do not like that sentiment. They prefer that their disputes particularly if they are business disputes be heard in private. Over the years there has been a move towards arbitration because one of the truly attractive features of arbitration is that the arbitral proceedings are held in private and are confidential. 
 There has been doubt for some years over the confidentiality provisions of the 1996 Act and some very real problems have emerged that have necessitated applications to the court for orders that certain material be released for example from a valuation arbitration. That is why the Law Commission over a number of years produced a couple of reports dealing with this vexed issue and why this bill endeavours to deal with it—and I think succeeds. 
The bill removes many of the limitations to confidentiality but it still retains the principle of confidentiality. Indeed if one looks at new section 14A one sees the fundamental principle that arbitral proceedings must be private but that there are certain limits on the prohibition of disclosure of confidential information and these are set out in the bill. New section 14C provides for example that a party or an arbitral tribunal may disclose confidential information to a professional or other adviser of any of the parties or if a subpoena is required to be complied with. 
Perhaps it is important also to emphasise that clause 4 contains a very comprehensive definition of exactly what confidential information is. Confidential information will include for example not only information that relates to the arbitral proceeding but also documents such as the pleadings the statement of claim the statement of defence and so on and any evidence that may have been adduced at the arbitration. 
So new section 14C is extremely important. New section 14D empowers the tribunal to allow disclosure of confidential information in certain circumstances. New section 14E provides that the High Court on application to it may allow or prohibit disclosure of confidential information in circumstances where the arbitral proceedings have been terminated or where the party lodges an appeal concerning confidentiality. So the court will determine the matter and then may or may not permit the confidential information to be handed over. 
It is important to note new section 14F because it comes back to the original point that I made concerning the fact that court proceedings under the Act must be conducted in public except in certain circumstances. I do not think there will be many circumstances at all where the courts will proceed to deal with matters privately or as they say in camera. 
The kinds of circumstances where the court can make an order that a matter be heard in private are set out in subsection (2) and can be seen for example in paragraph (b) which states that a matter can be heard in private “only if the Court is satisfied that the public interest in having the proceedings conducted in public is outweighed by the interests of any party to the proceedings in having the whole or any part of the proceedings conducted in private.” An example could well be when two corporate entities are in a complex commercial arbitration—over a patent for example. If highly sensitive information is disclosed concerning say the plaintiff’s patent there could well be very sound reasons why that kind of information would not be aired in open court. 
So there we have it. These are very good provisions that will provide some real assistance to parties to an arbitration. I might say that they are well overdue but as they always say better late than never. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I want to take just a brief call on this part. I thank members for their contributions. I thank those learned lawyers—a couple on the National Party side and a couple on the Government side—for their contributions. I think it has been said and well stated in respect of the amendments proposed to clauses 6 to 9 that this is one of those rare moments in Parliament when there is unanimity and I think we should proceed forthwith. 
The CHAIRPERSON (H V Ross Robertson) 
: Before I put the question we have before us an amendment to insert a new clause 4A. It has been put forward by the honourable member Te Ururoa Flavell. I advise the member that the amendment is out of order because it is outside the scope of the bill. I now therefore put the question that Part 1 stand part. 
Part 1 agreed to. 
Part 2 Related amendment to Disputes Tribunals Act 1988  
RUSSELL FAIRBROTHER (Labour) 
: 
 Part 2 is the sort of part that causes lawyers to salivate with great glee and excitement when they pick up a bill such as this and find an opportunity to speak on it. I must say though having been a criminal lawyer that feeling never came across me at all when I looked at Part 2. I wondered exactly what it was about. I spoke to my friend Mr Finlayson who said he was not going to speak on it. I then looked at the Disputes Tribunals Act. 
The thing about Part 2 is that it is a people’s provision. I have to say that in this country people are important. I want to talk about people just briefly in relation to Part 2. Generally on the Government side of the Chamber we find the people there are individuals who care for others and who put others before profit. Members on the Opposition side of the Chamber regard people as economic units but that is not mentioned in this part of the bill and I do not want to get too sidetracked by that. 
I want to come back to this part of the bill because it is really the key to this whole amendment of the Arbitration Act. It ventures into the world of the disputes tribunal. When I looked at this part I thought that it would have been a great field for a progressive an intelligent and an informed Opposition. Venturing into the area of the disputes tribunal an Opposition that really cared about its task and took itself seriously as Her Majesty’s loyal Opposition would have picked up the Act—but clearly those members have not done that—and gone straight to section 10 which gives the jurisdiction of the disputes tribunals. An alert lawyer on the Justice and Electoral Committee representing the Opposition would have said: “Ha we have a problem here that could be dealt with. It may be out of the scope of the bill but we will give it a go while we are dealing with amending the disputes tribunal.” 
The Opposition would have found that in section 10 of the Act there is no provision for someone who has a terrible neighbour next door with a terrible tree to take a dispute about the tree to the disputes tribunal because it is a matter of nuisance. So the poor neighbour has to go through the District Court process with all the openness of it that my friend Mr Finlayson was speaking about earlier. Of course he likes his name to be in the paper and he loves those open courts. The disadvantage is that the neighbour with the dispute over the tree cannot take his case to the disputes tribunal. But no. Was that picked up in the select committee by the loyal Opposition? There was not a skerrick about that—not a mention of it. In fact the select committee report does not even touch upon that critical and important point. That may have been because that issue was out of the scope of the bill I have to say; I am feeling some generosity towards Opposition members. It may well have been that they thought they could not even with their ingenuity energy inventiveness and all the time they have in Opposition manage to bring it within the scope of the bill. 
But I say to the National Party lawyers on the Opposition side of the Chamber that nothing ventured nothing gained. By letting Part 2 slip by in that way they have acknowledged that the Associate Minister of Justice who sits in the chair right now is the man with his finger on the button. He did not venture into the area of the disputes tribunal. I can feel a member’s bill coming on. Even as I speak at this moment on Part 2 I can feel a member’s bill coming on. I feel that we can move into the area of the disputes tribunal by way of a member’s bill and amend the legislation so that it can deal with my friend who has his neighbour’s tree hanging over his fence and who cannot afford to go to court because he cannot afford to pay Mr Finlayson’s fee to argue that the tree should be cut down. 
However I return to Part 2. It is a difficult part and that is why it has obviously been ignored. It is a very difficult part. Essentially it says that if one is a consumer then one cannot be conned by the terrible capitalists who run the megabuck stores that are despoiling our country. I am thinking of the big red sheds the big orange sheds and the big blue and yellow sheds that are changing the landscapes of every decent city in this country such as Napier. We cannot be conned by them. One’s sale agreement received at the till has a clause that any disputes about faulty goods imported from some far distant land with cheap labour costs should be argued by way of arbitration. But the consumer cannot be forced into that. 
However if the consumer returns to one of those monstrosities of the globalised village in which we now live saying he or she has been ripped off the retailer—in his or her broken English—may suggest they go to arbitration. If they agree quite separately to do so then they may go to arbitration. The effect of doing that by way of a written agreement is to suspend the working of the Disputes Tribunals Act. That is an important privilege to suspend because that Act is one that brings law back to the people. The first thing it does besides having a limited jurisdiction which I have tried to explain already is to keep lawyers out. It keeps lawyers out. Time and time again litigants who came to me in order to appeal were delighted that they did not have to face an expensive lawyer—unless of course it was the lawyer’s bill that they were arguing over and that happened quite often I have to say. They were delighted that they could deal with a layperson in the disputes tribunal who took often a lateral and an inventive approach to the resolution of problems. 
But the disputes tribunal for all its faults is a very important facility and it is not one that should be lightly dispensed with. So we have under this bill the ability to—I have just seen a note that I will not read out; it has really upset my train of thought so I need time and a glass of water in order to gather up my thoughts. I am simply saying that the disputes tribunal is there for us all— lay people and lawyers—and before we suspend that right we must do so carefully. The requirement under the amending provision in Part 2 is that no consumer can be forced into arbitration by an arbitration clause he or she was not aware of when purchasing the goods. If the matter has to go to arbitration there has to be a separate agreement and that is a jolly good idea. 
Part 2 agreed to. 
Clauses 1 2 and 3 
CHRISTOPHER FINLAYSON (National) 
: 
 I congratulate Mr Fairbrother on that contribution; it was one worthy of  
Monty Python’s Flying Circus 
. All I want to say in relation to these clauses is that they are good legislation and deal with two important substantive matters. The first matter is confidentiality which I will not go over again. The second is to give effect to the most recent developments at the United Nations Commission on International Trade Law (UNCITRAL) and I am delighted that it was timely to have this bill so that we could deal with article 7 of the model law dealing with interim measures. The other changes made by the Justice and Electoral Committee effectively dealt with deletions from the bill. As I covered those when I dealt with Part 1 I will not deal with them now. 
The only other thing I want to comment on concerns the issue of employment arbitration which is set out in the committee’s report. I was not in the Chamber when Mr Chauvel spoke but I am sure he would have dealt with it. I know that the issue is largely academic because most matters involving employment law will probably end up either before the Employment Relations Authority or go on to the court. At least the opportunity is there for an employment arbitration now as the law is quite clear that the Arbitration Act 1996 is not going to have any application. So if in those one in 1000 or one in 100-type situations it was possible for there to be an employment arbitration it would have to be conducted under the provisions of the English common law and that is really quite unsatisfactory. 
In my view either we remove from the Employment Relations Act the ability to have arbitration or we clarify the rules as to how arbitrations are to be conducted. In 21st century New Zealand to rely on the provisions of the English common law is really quite unsatisfactory. Although it is not a major matter maybe it is something that could be referred to the Law Commission. The next time it opines on further improvements to the Arbitration Act which of course it will with the passage of time maybe we could deal with that matter then. Other than that it is good legislation. As I said earlier it should have been in force some time ago so let us not tarry any further and get it enacted. 
Hon GEORGINA TE HEUHEU (National) 
: 
 Following on from my colleague Christopher Finlayson I echo the sentiments he has expressed. They certainly are true enough and have been evident in the discussion that has proceeded this evening. Those sentiments are that this is good legislation. I suppose given the record of this Government under which it has taken sometimes up to 7 years to introduce and pass legislation this has a somewhat shorter time span. The Law Commission’s report on which the legislation is based is from 2003 so 4 years on we have finally got it into place here. Again to echo my colleague let us not tarry—because it is good legislation—and let us see the third reading up on the Order Paper quite quickly. I am sure the Minister in charge of the bill the Hon Clayton Cosgrove being the eager enthusiastic—I was going to say “young” but I am not quite sure—youngish Minister that he is wishing to impress like all of the rest of his colleagues will make sure that this comes through reasonably quickly— 
Hon Clayton Cosgrove 
: Guaranteed! 
Hon GEORGINA TE HEUHEU 
: —particularly since there is support across the Chamber for it. The purpose of it is to make improvements and to give further credence to the underlying themes of the Arbitration Act. I have mentioned those earlier but I want to add again that anything that encourages this kind of private dispute resolution between private individuals so as to free up our clogged up court system is very good as well. That is an additional benefit here and it is very good. 
The New Zealand Law Commission identified issues with the exceptions found in section 14 of the Act regarding confidentiality in the context of arbitral proceedings and earlier we discussed some of the provisions that deal with those matters. Those are also worthy and as I say all designed to encourage parties to participate where it is appropriate in this type of arbitration. 
I want one more time before I conclude to go through the confidentiality description again. The provisions here are in a completely opposite direction to the underlying cornerstone of our justice system which is that proceedings and disputes between parties be heard in open court and in public so that justice is seen to be done. This is a process set up in appropriate cases to deal with matters that are private and should stay private for a whole variety of reasons including sensitivity of information where big corporates and businesses are concerned. That is why I guess section 4 and the interpretation in Part 1 set out very clearly what confidential information includes: the whole range of paperwork the range of evidence and submissions that come before the arbitral tribunal. It is a very comprehensive set of provisions that we are provided with here and I would say they are designed to make the whole arbitral process in this context work better. 
This bill was intended originally to come into force last year as Chris Finlayson said but it will now come into force this year. The Minister has given a guarantee that that will happen. I think that is good and I am very pleased to see that there is agreement across the Chamber on worthwhile legislation. 
NICKY WAGNER (National) 
: 
 As members have heard National is pleased to support the Arbitration Amendment Bill . As the title indicates this bill amends the Arbitration Act 1996 and it is designed to improve the Act. 
We are pleased with these amendments because the use of arbitration to resolve disputes is genuinely increasing. It is more cost-effective and more efficient to use arbitration than to go to court. Businesses tend to prefer arbitration because with the present overcrowding of courts and the resulting delays in getting cases heard it is more efficient. Businesses also appreciate that by choosing arbitration parties can select an appropriate arbitrator rather than have to have an appointed judge. An arbitrator can be selected on his or her technical skills qualifications or specific experience and that increases his or her ability to resolve the dispute. Finally businesses also appreciate the confidentiality of the process. 
The amendments in this bill are based on the New Zealand Law Commission’s 2003 report  
Improving the Arbitration Act 1996 
 . Although the report concluded that the Act was generally working well there were several issues that it felt should be addressed to improve its operation and this is being done. Finally I say that National supports this bill and its amendments which improve the 1996 Act and will encourage the use of arbitration as a cost-effective and efficient way to resolve disputes. 
Clause 1 agreed to. 
Clause 2 agreed to. 
Clause 3 agreed to. 
Bill to be reported without amendment presently.