Parker David: Arbitration Amendment Bill — Third Reading 
Parker David: Arbitration Amendment Bill — Third Reading 
[Volume:642;Page:12183] 
Hon DAVID PARKER (Minister of Energy) 
: 
 The Arbitration Amendment Bill is worthy legislation. Of course there has been a bit of a rise in the use of alternative dispute resolution procedures not just in New Zealand but in most Western countries around the world. This has partly been a response to court processes becoming expensive some of the courts being a bit bound up in their own processes and therefore people seeing that there are advantages in using alternative dispute resolution methodologies to resolve their disputes. 
The two main sorts of alternative dispute resolution are mediation and arbitration. The main difference between them of course is that mediation does not lead to an imposed solution; it leads to an agreed solution. That is not always appropriate. There are occasions when parties have disputes that will not be amenable to agreed solutions and when those parties want to have a solution imposed by a fair and impartial decision maker. Of course arbitration can achieve that. 
Arbitration is more formal than mediation because it does lead to a binding decision. But none the less it can still have advantages over traditional court processes. Parties can agree to the structure of the arbitration in a manner that suits their individual needs easily. There is also flexibility that might make it easier for a positive relationship to be maintained between the parties to the dispute which can be particularly important where the dispute is in a commercial context involving ongoing commercial relationships between parties. They might disagree on a particular issue but want to maintain an ongoing working relationship. Arbitration can provide a means by which the parties can resolve their dispute while taking a slightly less adversarial approach perhaps. Arbitration certainly can on occasion result in a less public airing of the issues if parties do not want to air their dirty laundry in public. As a consequence compared with some litigation there is probably less of a chance that the relationship will break down. 
Other advantages can relate to cost though I would note that that is not always the case. The court provides a very cost-effective service most of the time. The cost of services particularly where expert arbitrators are involved can be higher than the cost of traditional courts. Another advantage for arbitration is that the arbitrators can bring specialist skills. The parties to dispute can decide that it would be more fairly determined if the arbitrator was someone with knowledge of the industry concerned or some specialist knowledge of the matters that are in dispute. It is for them to choose who the arbitrator will be if they can agree and often the instruments or the contracts if they have a contractual relationship will set out a process for the appointment of the arbitrator if they cannot agree on an appropriate arbitrator. So arbitration is a very important part of a developed country that is trying to provide cost-effective and practical ways for people to resolve disputes between themselves. 
This bill makes a number of small changes to the existing Arbitration Act. The Act itself was a consequence of the review of the law in this area made by the Law Commission and this amendment bill which came to the attention of the House some 10 or 11 years after the original 1996 Arbitration Act was passed is probably a timely look at whether some minor changes are needed to the Act. The changes are relatively minor and that is testament to the fact that the Law Commission and Parliament at that time generally got it right. The changes that are brought about by this bill do not suggest any fundamental failure with the existing Act. Indeed it is pleasing to see that the existing Act has proven to be a well used and workable framework. None the less a few tune-ups are needed. Some of these come as a consequence of changes made to the international models for arbitration. In the Arbitration Act 1996 New Zealand adopted the model law on international commercial arbitration and recently changes have been made to that international model law. Accordingly this bill incorporates those changes into the New Zealand law and makes New Zealand one of the first countries to update its legislation to reflect those changes. 
So what are some of those changes? First the changes give the arbitrators more power to ensure that the arbitration proceedings are worthwhile. They enable arbitrators to have the power to make orders that preserve property so that a successful party will be able to enforce its arbitration award and there will be something there to enforce it against. Another change is that there will be more powers given to arbitrators to make orders preserving evidence so that the evidence will be preserved for a fair trial. Again these new powers will help to enhance the attractiveness of arbitration as an option. Although these are mainly technical changes to the existing Arbitration Act they are none the less good changes and I recommend them to the House.