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New Zealand reforms choice of law in tort

by Jack Wass (Stout Street Chambers)

On 30 November 2017, the New Zealand Parliament passed the Private International Law (Choice of Law in Tort) Act 2017 (the Act). The Act fundamentally reforms New Zealand’s rules for choice of law in tort.

New Zealand’s choice of law rules were inherited from the United Kingdom, and it has always been assumed that the double actionability rule applied. New Zealand had become increasingly isolated in the common law world, as the United Kingdom, Australia and Canada abolished the rule.

Introduced as a Member’s Bill in 2016, the Act expressly abolishes the double actionability rule in favour of a general rule of the lex loci delicti, subject to the court’s power to displace that law where it is substantially more appropriate for another law to apply. In doing so, the drafters of the Act consciously followed the model of the Private International Law (Miscellaneous Provisions) Act 1995 (UK) (the 1995 Act). The 1995 Act was prepared after extensive consultation by the English and Scottish Law Commissions and proved robust in the two decades it operated before the Rome II Regulation came into force, and the drafters were wise to adopt its basic approach.

However, this statutory reform gave the New Zealand Parliament a unique opportunity to refine the approach of the 1995 Act, to account for difficulties and unanticipated issues that had arisen since 1995. Three notable changes may interest readers:

First, the Act applies to all torts. Where the 1995 Act controversially excluded defamation, the New Zealand Parliament was satisfied that the particular concerns that arise in the context of that tort could be addressed by the powers to displace the general rule and to disapply rules that would violate New Zealand public policy.

Second, the Act expressly contemplates the possibility of parties choosing the law applicable to non-contractual obligations. It is unclear to what extent the 1995 Act contemplates subjective choice of law in tort, since its rules are expressed exclusively in objective terms. The Select Committee was impressed by the proposition that commercial parties should be able to choose the law applicable to both contractual and related tortious claims (such as negligent misstatement), and added a provision specifying that nothing in the statute ‘precludes recognition or development of a choice of law rule giving effect to an agreement as to the applicable law.’ That leaves the courts free to recognise subjective choice of law in tort.

Third, the Act leaves the distinction between substance and procedure free to evolve. In Harding v Wealands [2007] 2 AC 1, the House of Lords held that the reference to ‘questions of procedure’ in the 1995 Act was required to be interpreted at the time the statute was enacted. This had the effect of fossilising the traditional distinction between substance and procedure and precluding the courts from recognising the more liberal approach followed, for example, in Australia. The New Zealand Act specifies that the conception of ‘procedure’ must be interpreted in accordance with the rules of private international law in force at the time of the case, thus ruling out the Harding v Wealands approach in New Zealand.

The Act is a rare example of legislative intervention in New Zealand private international law, and has brought choice of law in tort into line with the law in the United Kingdom, Australia and Canada. New Zealand has borrowed from the time-proven precedent of the United Kingdom’s legislation, while introducing valuable amendments.

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