Wagner Nicky: Arbitration Amendment Bill — Second Reading 
Wagner Nicky: Arbitration Amendment Bill — Second Reading 
[Volume:639;Page:8984] 
NICKY WAGNER (National) 
: 
 I rise to speak to the second reading of the Arbitration Amendment Bill. The key to arbitration as we have all been discussing today is simply that one can use an independent person often an expert to resolve disputes between parties. The key to this is the fact that it is quicker better more efficient and cheaper than using the courts. There has been a marked increase in the use of arbitration in recent years. Although there are no statistics to tell us the total number of arbitrations the number of defended civil cases filed in the High Court dropped about 40 percent between 1999 and 2003. 
This tells us that many parties prefer arbitration before proceedings reach courts and we know why. The whole arbitration process is cheaper easier and quicker than going to court particularly now that many courts are overcrowded and disputes that come before the court take longer and are much more difficult. And of course in the modern world time is of the essence. 
The general attitude of business in terms of using arbitration comes from that fact that when it looks at the court system it can see that even when people win they lose. So arbitration is a particularly useful alternative. 
The amendments in this bill are based on the recommendations of the New Zealand Law Commission of 2003. The key area I would like to look at is the concerns with consumer arbitration. Specific provisions apply when one party is in trade—selling a business or doing business—and one party is a consumer. The Act recognises that at times arbitrarial clauses can work to the disadvantage of a consumer. So the bill seeks to protect the genuinely uninformed consumer. With that in mind the definition of consumer has been redefined in this bill. In the past it was generally pretty broad. It included schools churches and local authorities. With the changes in this bill a consumer is now defined as an individual who is not in trade—and that makes sense to me. 
The existing law allowed arbitration to be used only if the consumer had signed a separate agreement agreeing to arbitrate at the same time as the original contract was entered into. This became a routine sort of process and it was often done by consumers without much thought. The bill now allows for consumers to decide whether they want to agree to arbitration after a dispute has arisen so they would be making a much more thoughtful decision and arbitration will proceed only if both parties agree. 
I believe that this is good common sense and the best course of action. Having two willing parties to arbitration will improve the success rate of the process. To do that there also needs to be a further technical tweak to the bill which removes the jurisdiction of the disputes tribunal where a consumer and a business enterprise execute an arbitration agreement. So with those changes in terms of consumers National supports this bill as an attempt to improve the 1996 Act and to find the most cost-effective and efficient way to resolve disputes. 
Bill read a second time.