The EU General Data Protection Regulation (GDPR) will come into full effect on May 25 2018 and will impact New Zealand businesses that do business with EU residents or entities or have a presence in the European Union. In addition, the privacy commissioner recently released a report recommending that the Privacy Act be substantially amended (including to comply with the GDPR) and the Ministry of Justice has indicated that privacy reform is a key initiative.
The Commerce (Criminalisation of Cartels) Amendment Bill was recently tabled in the House of Representatives. It introduces a new criminal offence for cartel conduct, as well as a requirement for intention for criminal prosecution and a defence against criminal prosecution for individuals who believed that a cartel provision was reasonably necessary for a collaborative activity. This development overturns the previous government's decision to remove criminal penalties for cartel conduct from the bill.
The Supreme Court recently issued a somewhat controversial decision of significance in the area of litigation funding. The decision contains guidance on the key question of whether a funding agreement amounted to an impermissible assignment of a bare cause of action that would constitute trafficking in litigation. It remains to be seen whether, and to what extent, the decision may be used by defendants seeking to challenge funding agreements.
There were a number of key competition law developments in New Zealand during 2017, including the enactment of the Cartels Act, the postponement of the reform of the prohibition on taking advantage of market power and a significant increase in the proportion of declined merger clearances. In addition, the new Labour-led government stated that it is keen to empower the Commerce Commission to undertake market studies before the end of 2018.
There is a debate in competition law at present concerning whether a company can restrict online sales for their products. Under New Zealand competition law, a supplier restricting its customers from selling on online platforms could be penalised if, among other things, it has market power and imposes restrictions to take advantage of that market power for an anti-competitive purpose. However, legitimate and pro-competitive justifications can be relevant in assessing the legality of such restrictions.
The Evidence Amendment Act 2016 came into force in January 2017 and is the fourth and most substantial amendment to the Evidence Act since its introduction in 2006. Most of the amendments relate to evidence in criminal proceedings. However, several amendments are relevant to civil proceedings. The amendments relate to the definitions relevant to the application of privilege, legal advice privilege, settlement privilege, prior consistent statements and the prohibition on using previous decisions as evidence.
The Supreme Court recently clarified the law applicable to unused registered trademarks in New Zealand and limited the scope of protection afforded to trademarks under the Trademarks Act 2002. The decision will affect companies which have sought to expand the protection available under the act by acquiring, but not actually using, trademarks that resemble their own purely to prevent other traders from using them.
The Commerce Commission recently released its Consumer Issues Report 2016/17. Although greater transparency is to be commended, a failure to balance this against the legitimate interests of businesses that have not been involved in any breach of the law, but which are still named and shamed, risks turning the report into a publication which does more harm than good.
The commerce and consumer affairs minister recently announced that the government was recommending changes to the Commerce Act, including providing the Commerce Commission with powers to undertake market studies and allowing Commerce Commission settlements to be registered as court-enforceable undertakings, so that the commission can litigate breaches of those undertakings without needing to prove that a breach of the Commerce Act has arisen.
The New Zealand Court of Appeal recently had to determine whether late payment fees of A$28 million on a 60-day loan of A$37 million were an unenforceable penalty according to the law of New South Wales, Australia, which was the law of the contract. Although the judgment addresses the law of New South Wales, it offers some insight into the New Zealand court's view of recent international developments on penalties.
The Commerce (Cartels and Other Matters) Amendment Bill was recently enacted into law. Businesses finally have the additional certainty of prohibitions that are better aligned with the equivalent Australian law and an exemption that is better targeted at efficiency-enhancing collaborations between competitors. Businesses are likely to regard this as a positive step towards having both a more fit-for-purpose exemption and legal certainty regarding the competition law regime going forward.
The High Court recently ordered that a substantial amount be provided as security for costs by a litigation funder in relation to claims brought against seven defendants. The fact that the litigation was being funded by a third party was a significant consideration in the determination that the plaintiff could not pay costs itself and the exercise of the court's discretion to order that security be provided.
The Supreme Court recently upheld a ban on smoking in public mental health facilities, ruling that the ban did not breach patients' rights, even of those compulsorily detained on the property. The court held that there was no requirement under the Smoke-free Environments Act to provide a dedicated smoking room, and rejected the appellant's claim that the smoking prohibition infringed a number of rights under the Bill of Rights Act.
The High Court recently aborted the trial of four company directors of two failed finance companies after the prosecution disclosed an unprecedented number of previously undisclosed documents at an advanced stage of the trial. The court's careful examination of the principles for aborting a single-judge trial will be useful in similar cases, in light of the fact that, because complex commercial criminal cases involve immense numbers of documents, disclosure failures can occur.
The Court of Appeal recently upheld a High Court declaration that a prohibition on prisoners voting is inconsistent with the Bill of Rights Act. The case is significant in its finding that the courts have jurisdiction to make declarations of inconsistency. Although the courts have, from the time of the act's enactment, been committed to granting remedies where possible to vindicate rights, they have declined earlier applications for declarations of inconsistency.
The Court of Appeal recently held that a local authority did not owe a duty of care to a commissioning owner in issuing a code compliance certificate for a non-compliant building. The decision is significant because it restricts the circumstances in which local authorities have a duty of care in relation to defective buildings, especially to commissioning building owners which contract with their own professionals to ensure compliance.
The Court of Appeal recently reversed, on appeal, a High Court judgment setting aside the Ministry of Health's decision to award problem gambling services contracts to parties other than the applicant, the Problem Gambling Foundation, a major incumbent provider. The decision is important because it significantly decreases the likelihood of unsuccessful bidders being able to use the government procurement rules to set aside procurement decisions.
A recent High Court judgment has surprised some observers by allowing a representative action of homeowners to proceed against a government-owned earthquake insurer. The judgment is of note because it followed an earlier refusal by the same court to give the group leave to proceed. The case offers the opportunity to compare the unsuccessful and successful applications and briefly survey the landscape of such actions.
Unlike other common law jurisdictions, New Zealand has not legislated to extinguish or restrict the torts of maintenance and champerty. Nonetheless, the courts have adopted a pragmatic approach to the management of third-party funded litigation, which recognises the benefits of third-party litigation funding in promoting access to justice, while leaving certain issues arising under the torts of maintenance and champerty for determination in the context of an actual claim of that nature.
The High Court recently issued a decision regarding the coverage offered to the directors and general manager of a trust fund management company by a professional indemnity policy and separate directors' and officers' cover. The decision highlights that courts will consider a number of relevant factors to interpret multiple policies, the most relevant in this case being the commercial intent of the policies as a whole.