Skip to Navigation Skip to Content Skip to Search Skip to Site Map Menu

Sections 317 & 321 of the Accident Compensation Act 2001

by Elsabe Schoeman (University of Pretoria)

I would like to congratulate Maria Hook on this wonderful achievement of establishing a new website for New Zealand conflict of laws/private international law. In the absence of a complete, up to date text on this area of New Zealand law, the website and the accompanying blog will go a long way towards keeping academics, practitioners and students informed of the latest developments. It will also provide foreign scholars with access to a resource for comparative research. I sincerely hope that this website will go from strength to strength!

It is well known that New Zealand often punches above its weight on the international front. Private international law is no exception – New Zealand’s unique and very comprehensive Accident Compensation Scheme has been the subject of litigation in various parts of the world, most notably in Australia, the US and the UK. As is often the case with statutory compensation regimes the provisions, that private international law matters crucially might turn on, are not sufficiently clear. Section 317(1) of the Accident Compensation Act 2001 is an example of a section that was probably not drafted with conflict of laws in mind:

317 Proceedings for personal injury

(1)          No person may bring proceedings independently of this Act, whether under any rule of law or any enactment, in any court in New Zealand, for damages arising directly or indirectly out of—

                (a)          personal injury covered by this Act; or

                (b)          personal injury covered by the former Acts.

Strictly speaking, this provision seems to bar proceedings for compensation for personal injury in a New Zealand court by someone covered under the Accident Compensation Scheme. But, does that open up the possibility of bringing proceedings in an overseas court, regardless of the particular plaintiff being covered under the Accident Compensation Scheme? This question has been the main issue in several individual and class actions brought in foreign fora. Increasingly, foreign courts, relying on expert opinions from New Zealand academics and practitioners, are endorsing the view that section 317(1) should be characterised as a substantive bar, which applies whenever New Zealand law is indicated as the lex causae (see eg James Hardie  Co Pty Ltd v Hall (1998) 43 NSWLR 554, 579B, per Sheller JA). Furthermore, reading and interpreting the relevant section in the light of its context and purpose, the statutory bar is aimed at preventing double recovery and therefore it cannot be limited to “proceedings … in any court in New Zealand”.

But how are sections 317 and 321 to be reconciled? Section 321 explicitly contemplates the possibility of proceedings for personal injury being brought in New Zealand or elsewhere. More specifically, section 321 applies where a person, covered under the Scheme, has the right to bring proceedings for damages, or has been awarded damages, in New Zealand or elsewhere. The Accident Compensation Corporation may require that person to enforce the right to damages or to assign the right to the Corporation (s 321(1) and (2)) or, where that person has already received a sum of money, the Corporation is entitled to deduct those damages from entitlements or to recover entitlements (s 321(3) and (4)). It is submitted that section 321 does not present an avenue for bypassing the section 317(1) statutory bar – on the contrary, section 321 provides for cases where New Zealand law (and the substantive section 317(1) statutory bar) is not indicated as the applicable law in a conflict of laws dispute. For example, where an accident happened overseas between a New Zealand resident (the plaintiff) and a foreigner (the defendant), and the foreign court applies a lex loci delicti conflict rule, New Zealand law will not be indicated as the lex causae, since the accident did not happen in New Zealand. As a result, the section 317(1) statutory bar will not apply and, in order to avoid double recovery, the Accident Compensation Corporation may invoke section 321.

It is clear, therefore, that section 321 does not provide support for the argument that a plaintiff is able to bypass section 317(1) and institute proceedings abroad for personal injury covered under the Scheme. As observed by Mrs Justice Simler DBE in Allen and Others v Depuy International Limited [2015] EWHC 926 (QB), [50]: “I cannot see what purpose would have been served in allowing someone with cover under the Scheme in New Zealand, and a technical right to sue abroad (as a result of happenstance) simply to bypass the statutory Scheme.”

Maybe the time has come for section 317(1) to be reviewed and redrafted with private international law in mind. The phrase, “in any court in New Zealand”, though apposite for domestic law disputes, certainly does not lend itself to easy interpretation in foreign courts.

Leave a comment