Arbitration Amendment Bill — First Reading 
Arbitration Amendment Bill — First Reading 
[Volume:634;Page:5587] 
Arbitration Amendment Bill 
First Reading 
Debate resumed. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker tena tatou te Whare. I understand that the object of this bill is to make the Arbitration Act work better to make it easier for people to use arbitration to resolve disputes. As a member of the Maori Party I am glad to say that at first glance at least the bill seems to have some significant advantages over the current Act. One of those is in the area of consumer protection where until now consumer protection guarantees could take effect only when both the consumer and the business agreed to it. The bill now enables parties in dispute to appoint an arbitrator and that cannot be a bad idea. Then there is the matter of confidentiality where the bill now allows all information to be kept confidential unless decided by a court order or by agreement. A big plus from our point of view is that without the formal direction of court protocols arbitration can allow for the greater recognition and use of tikanga Maori in dispute resolution processes. So that is a good start from our point of view. 
But in order to see whether the legislation may work we need to look back at the Maori experience with regard to arbitration which in fact has been experienced by Maori ever since the signing of the nation’s foundation document the Treaty of Waitangi. Given the location of this debate and indeed Parliament itself it is appropriate that we look at Wai 145  
Te Whanga-nui-a-Tara me ona Taki 
wa 
 report for a context of Crown-Maori experiences of arbitration. That story begins in August 1840 with arbitration between the New Zealand Company and those purporting to represent Port Nicholson Maori. The case involved a dispute between the land claims commissioner of that time Mr Spain and Maori of Port Nicholson. Commissioner Spain it seems was anxious to finish a land inquiry under the terms of the Land Claims Ordinance of 1841 so he recommended that Maori simply be paid—and I quote and I would like everybody to take note of this one—“the amount of compensation that I may declare them entitled to receive”. 
So naturally in contemporary times the Wellington Tenths Trust said that the Crown had favoured settlers over Maori in connection with land disputes at Port Nicholson. And just as unsurprisingly the Waitangi Tribunal found that the Crown had imposed an arbitration regime that was intended to extinguish any Maori claims to title without an inquiry into whether a valid sale had occurred. The Waitangi Tribunal further found that the Crown had breached Treaty principles by one failing to properly consult with Maori before switching from the inquiry to a form of arbitration two using an arbitration process without Maori’s informed consent and three failing to ensure a fair process was used by the arbitrator. That culminated in the view that Maori were ripped off by the arbitration proceedings. 
I know that other parties do not always appreciate the Maori Party’s passion for mentioning past New Zealand experiences as a way of helping us to understand where we may be headed in the future so I thought I would throw in a comment from the Spanish author of  
Reason in Common Sense 
 George Santayana who gave us that great quote: “Those who cannot learn from history are doomed to repeat it.” In the Maori world we have many such sayings that remind us that we know our future because we understand our past. In other words we learn by experience. Me titiro whakamuri kia marama ai te haere o mua. “Look back to the past and get a clear vision for the future.” 
Our brief look into that snapshot of the history of Te Whanga-nui-a-Tara—and there are many many other such examples in Aotearoa—teaches us to be wary of any traps we may encounter in arbitration today. Arbitration is supposed to be about resolving disputes by common agreement. That means of course that both parties should also have the opportunity to properly determine the rules for that arbitration. But if Maori have learnt anything from the Port Nicholson experience it is that regardless of the promise history has proven that arbitration is often driven by one party and disputes far from being resolved end up being magnified. We also know that of the 1274 unfiled disputes noted in the Ministry of Justice’s 2004 report arbitration was used in only 6 percent of the cases. Such is the background that sets the stage for creating new processes to make arbitration work. 
Because of the wisdom that comes from that experience the Maori Party intends to introduce an amendment to this bill specifically to deal with any disputes over Maori land which we believe should be dealt with in the Maori Land Court rather than by arbitration. There are already precedents for moving Maori land disputes out of the general courts and I cite issues arising from both the Fencing Act and the Property Law Act. We know that arbitration is sometimes used by Maori to deal with lease rental disputes on Maori land but we believe that the Maori Land Court will deal far more effectively with Maori land disputes in a more user-friendly way because of the court’s awareness of tikanga Maori and how that tikanga affects Maori attitudes towards land. The current process is weighed down by having too many lawyers involved and by the cost of having to bring in hotshot arbitrators both of which make it a decidedly Maori-unfriendly process. What we want to do with our amendment is simply refer to the Maori Land Court any proposed arbitration matter involving Maori land or general land owned by Maori as defined in Te Ture Whenua Maori Act of 1993. 
Despite the low uptake of arbitration and despite the tragic history of arbitration processes being determined by the Crown without consultation with Maori and without their informed consent the Maori Party remains perhaps foolishly optimistic that all things being equal arbitration may just be a very effective dispute resolution process. This bill will let the parties decide whether arbitration is the most appropriate form of dispute resolution and when determining the best forum the parties can still if they wish refer the dispute to the disputes tribunal. So we are pleased to see that options are available and that both parties are equal partners in determining arbitration. The precedent established by Wai 145 Te Whanga-nui-a-Tara claim reminds us of a situation where the Crown failed to put in place a fair process for arbitration failed to consult over the terms of arbitration and failed to determine whether arbitration was even acceptable to Maori. Where that happens an injustice arises and society carries the cost of that injustice until such time as it is properly resolved. 
So we move forward on this bill having been clearly forewarned. We look forward to the varied experience of Maori litigants claimants mediators judges lawyers and others who will help to refine the bill through the select committee process. The bottom line for everyone must be that if this bill helps to reduce the number of disputes that go before the courts and the cost of that exercise then it has to have been successful. We will support the Arbitration Amendment Bill being referred through to the select committee with a cautionary endorsement from Santayana that those who do not learn from history will indeed be doomed to repeat it. Kia ora. 
NICKY WAGNER (National) 
: 
 The Arbitration Amendment Bill is designed to improve the operation of the Arbitration Act 1996. Arbitration is an effective method of dispute resolution which involves the settlement of a dispute by an independent person appointed mutually by conflicting parties. The use of arbitration has increased markedly over recent years and although there are no statistics on the total number of arbitrations the number of defended civil cases filed in the High Court dropped by 40 percent between 1999 and 2003. This would seem to indicate that parties prefer arbitration before proceedings reach court and anecdotal evidence tells us that the cost and the speed of arbitration are attractive. 
The amendments in this bill are designed to encourage further the use of arbitration as a means to resolve disputes privately in New Zealand. National fully supports this aim and the use of arbitration as a means to streamline and manage the cost and timeliness of dispute resolution in civil proceedings. The use of arbitrators who have technical skills or qualifications adds another valuable facet to this method of dispute resolution. 
The bill’s amendments to the Act are based on the recommendations made by the New Zealand Law Commission’s report of 2003. Although in that report the Law Commission concluded that the 1996 Act was generally working well several problems were identified that if addressed could significantly improve the operation of the law. As most arbitration is for private commercial or contractual disputes confidentiality is considered to be one of arbitration’s major attractions. But the Law Commission identified two issues concerning confidentiality—the default rule and the open justice issue—that the commission recommended should be refined. 
The default rule is concerned with the original section 14 of the 1996 Act. Under the Act all arbitral proceedings are closed and confidential but for two exceptions. The first exception is where the parties otherwise agree. The second exception permits disclosure of such information to a professional or other adviser of any party if the publication disclosure or communication is contemplated by the Act. 
These present exceptions are very narrow and do not permit disclosure of information to interested parties—for example a professional or other adviser of one of the parties—disclosures required by law or by a competent regulatory body but not contemplated by the 1996 Act or disclosures for other legitimate reasons such as the filing and prosecution of any application to a District Court or to the High Court. The Law Commission considered the clause “if the publication disclosure or communication is contemplated by the Act” to be unduly vague and it required clarification—a task for the select committee. 
The open justice issue concerns the idea that confidential provisions should not extend to proceedings outside the arbitration process and in particular to subsequent court proceedings. The bill clarifies that as a general rule arbitral proceedings are private and confidential while court proceedings are to be conducted in public. But exceptions may occur and applications could be made to the court. This is another area that needs select committee scrutiny as it is important that we find the right balance between party autonomy and open justice. 
Finally another area that needs close scrutiny involves the provisions for selecting an arbitrator in cases of conflict between the parties as confidence in the arbitrator selected is fundamental to the process. National supports this bill in its attempt to improve the 1996 Act and as a first step in the process to find the most cost-effective and efficient way to resolve disputes. Thank you. 
Bill read a first time. 
Bill referred to the Justice and Electoral Committee.referred to Justice and Electoral Committee