Member Articles

It wasn’t that long ago that a surge of commercial litigation flowing from COVID-19 was anticipated. Contractual disputes relating to the performance or termination of contracts were expected to be litigated and there was a real risk for directors who failed to consider and respond to the risks arising from COVID-19.
 
But the surge in Covid-related litigation never (or has not yet) arrived. While there were certainly disputes between commercial parties, what played out last year was businesses getting on with doing business and taking a pragmatic approach to resolving disputes.
 
Of course this was not universal, with a number of industries continuing to struggle because of New Zealand’s closed borders, supply chain issues and slowing global growth. We expect business casualties and litigation to flow as a result, but not at the scale anticipated in the first half of 2020 – unless of course there are further lockdowns.   
 
Aside from litigation stemming from Covid-related issues, we anticipate increased regulatory action against companies and directors in 2021 including: 

• the Financial Market Authority focusing on governance and culture, while also taking an active enforcement role around anti-money laundering breaches, where regulatory tolerance for non-compliance is decreasing;
  
  
• the progression of WorkSafe’s prosecution of three directors of a person conducting a business or undertaking associated with the ownership of Whakaari/White Island will bring a renewed focus on officer compliance with their due diligence duty;
  
  
• the Privacy Commissioner working with other regulators to ensure that agencies meet their privacy obligations and are both cyber-secure and resilient;
  
  
• the Commerce Commission being particularly active, including around environmental claims, pricing representations and enforcing limits on the fees and interest that can be charged on high-cost consumer credit contracts. It will also continue to increase awareness of cartel conduct ahead of criminal sanctions from April this year; and
  
  
• regulators continuing to investigate and enforce corporate misconduct – a growing trend in New Zealand and overseas.

Read the Litigation Forecast