Finlayson Christopher: Arbitration Amendment Bill — First Reading 
Finlayson Christopher: Arbitration Amendment Bill — First Reading 
[Volume:634;Page:5583] 
CHRISTOPHER FINLAYSON (National) 
: 
 As Dr Worth said National will support this first reading of the bill and support it to a select committee. I certainly look forward to working on the bill with my colleagues on the Justice and Electoral Committee particularly on the issues arising in clause 6 that deal with the important issue of confidentiality and it is on confidentiality that I want to direct the major portion of my speech this afternoon. 
But I shall first refer to a few general principles. As is well known arbitration is a consensual method of dispute resolution. It enables parties to identify parameters to determine the rules that they wish to apply to the resolution of the dispute and fundamental to an arbitral process is the agreement to appoint a private judge to adjudicate and then make a binding decision. So for example it is increasingly common for retired High Court judges to be appointed as arbitrators. The Minister in his first reading speech observed that it is perhaps a less adversarial method; that has certainly not always been my experience in arbitrations. 
Arbitration is one of a number of systems of alternative dispute resolution that have become increasingly popular in recent years. Others are mediation which like arbitration has a neutral intervener but unlike arbitration the intervener facilitates but does not impose the result. Less common forms of alternative dispute resolution are the mini-trial and in the United States there is also the development of a new form of alternative dispute resolution called “med-arb” which is where the mediation turns into an arbitration and where the referee can indeed impose a result. 
More and more parties refer to arbitration and prefer arbitration to court proceedings. Why? Despite what the Minister for Courts says in this House from time to time the New Zealand court system is not working properly and large corporations are abandoning the court system for alternative dispute resolution especially arbitration which is all very well if one can afford it too bad if one cannot. That is not a good state of affairs for the poor of this land. 
I want to say something about the enactment of the Arbitration Act 1996. As Dr Worth observed it was the result of a member’s bill by Mr Peter Hilt formerly of this place and it repealed and replaced the Arbitration Act 1908. The 1908 Act had been modelled on English arbitration procedures whereas the 1996 Act was based on an international model developed by the United Nations Commission on International Trade Law. As both the Minister and Dr Worth observed the Act appears to be working very well. 
In 2003 the Law Commission published a report entitled  
Improving the Arbitration Act 1996 
. One key issue that report dealt with was the issue of confidentiality. I am going to repeat what the Law Commission said because I think the paper crystallised the issues very well. The Law Commission report stated that the key issues were firstly whether section 14 of the Act dealt adequately with issues of confidentiality and if not how the Act should be amended to deal adequately with the issue. Secondly when it is necessary for parties to an arbitration to have recourse to courts of general jurisdiction should the otherwise confidential nature of the arbitral process yield to principles of open justice which of course apply in courts of general jurisdiction? That really is what clause 6 deals with because that amends the former section 14 of the Act and imposes a regime that generally I think is an improvement. 
If one looks at section 14 of the Act as it is currently framed one can see that with two stated exceptions only section 14 contains an absolute prohibition on disclosure of information relating to arbitral proceedings and awards. The first exception is where the parties otherwise agree and the second exception set out in section 14 permits disclosure of such information to a professional or any other adviser of any party or otherwise if the publication disclosure or communication is contemplated by the Act. But it does not deal with the question of disclosure to interested parties for example a regulatory body or an insurer it does not deal with disclosures required by law but not contemplated by the Act and it does not deal with disclosures for other legitimate reasons—for example those needed to defend a proceeding in court. So there are some real problems with the legislation and that is why we need to take a look at it. 
On the second issue of the open justice question about when proceedings go from an arbitration into the general court process some important issues arise. There is this very important open justice issue. It is a difficult issue and one that has been before our courts before. I refer to what Justice Robertson said in  
Television New Zealand Ltd v Langley Productions 
. He said that a clear and unambiguous determination of Parliament should be required for the cloak of confidentiality that attaches to the arbitral process to apply to subsequent proceedings in the High Court. That is really the issue that the Law Commission was required to deal with and it is that issue that is reflected in the work done on clause 6 of the bill. 
It is important to make a few statements about the open justice principle. In general terms it can be summarised in this way: the courts should conduct their processes openly unless to do so would frustrate the administration of justice. That open justice principle reflects an underlying philosophy that justice should not only be done but—in the words of the Law Lords in the case  
Scott v Scott 
—be seen to be done. And therefore it is better to refer to the desirability of open justice as a principle rather than as a rule. 
Some statutes modify the open justice principle. So for example proceedings that are conducted before a disputes tribunal are conducted in private. Another example would be when a complainant giving evidence in a criminal case of a sexual nature may not need to have the evidence heard in open court but only before a limited number of witnesses. Judges of course can sometimes sit in chambers and very exceptionally the court in the exercise of its inherent jurisdiction is entitled to receive certain evidence in confidence—what is called in camera. But I have to say in 25 years’ practice in the courts of our land I can recall this happening on one occasion in a case in which I was involved. That was in the context of a case involving Her Majesty’s Attorney-General for England and Wales—a case about a confidentiality contract sought to be enforced in New Zealand against a former member of the UK SAS. 
So the issue is what should happen if parties to an arbitration want to have recourse to the courts of general jurisdiction: should the confidential nature of the arbitration yield to principles of open justice that apply to the courts? This bill seeks to deal with those issues and I refer members to clauses 14F to 14I. The general principle is that if one moves to the court system from an arbitration the general principle of open justice will apply unless one can come within the exceptions set out in those clauses. I think that is the right balance. I am very much looking forward to going through those clauses in detail in the select committee and then we can discuss them when the bill comes back to the House. 
There are a couple of other points that the select committee will need to look at. The first is set out in clause 8 and deals with the recognition and enforcement of arbitral awards. I do not think there is anything too magical about that clause—there are no real changes other than a more up-to-date form of English and also reference to the District Court because not all awards need be enforced through the High Court. Finally clause 9 outlines improvements to the appointment of the arbitrator. 
I join with other colleagues in supporting the bill through its first reading and for reference to the Justice and Electoral Committee. As I have said I am particularly interested in those issues of confidentiality and I look forward to working on this bill.