NEW ZEALAND Law and Practice Contributed by: Shane Campbell and Thomas Westaway, Campbell Westaway
is available where multiple parties bear concurrent liability. 2.8 Damages In contract, the aim is to place the plaintiff in the position it would have been in had the contract been performed (the expectation basis), or alternatively to recover wasted expenditure on the reliance basis. In tort, the objective is to restore the plaintiff to the posi- tion it occupied before the wrong. A duty to mitigate operates in both contexts. Remoteness in contract is governed by Hadley v Bax- endale (1854) 9 Exch 341, limiting recovery to loss arising naturally from the breach or within the reasona- ble contemplation of the parties at contracting. In tort, the broader reasonable foreseeability test applies. Penalty clauses are unenforceable where the conse- quence imposed for breach is out of all proportion to the innocent party’s legitimate interests in perfor- mance. Exemplary damages are available but rare, requir- ing truly outrageous conduct amounting to subjec- tive recklessness ( Couch v Attorney - General [2010] 3 NZLR 149). New Zealand does not apply punitive mul- tipliers of the kind familiar in United States litigation. Interest on money judgments is mandatory under the Interest on Money Claims Act 2016, calculated by ref- erence to the Reserve Bank’s retail six-month term deposit rate plus 0.15% per annum. Arbitration in New Zealand is governed by the Arbitra- tion Act 1996 (the Act), which adopts the UNCITRAL Model Law on International Commercial Arbitration and applies to all arbitrations seated in New Zealand. Arbitration occupies a significant and well-established position within the commercial dispute resolution landscape. Its prevalence is driven principally by con- tractual pre-dispute arbitration clauses and it offers a materially faster resolution pathway than High Court 3. Arbitration 3.1 Prevalence
litigation. The comparative duration data is addressed in 3.6 Length of Proceedings . The Second Aotearoa New Zealand Arbitration Survey (published 2025) (the Survey) records that lease and property-related disputes dominated the domestic subject matter at 52% of reported arbitrations. Com- mercial and contract disputes accounted for 21% and construction disputes for 17%. International arbitra- tions were concentrated in commercial and contract matters. Ad hoc arbitration under the Act remains strongly pre- ferred, with 83% of reported arbitrations conducted under the Act alone, though the use of institutional rules has increased from 4% to 12% between survey periods, suggesting a gradual shift in practice. 3.2 Restrictions on Use of Arbitration Disputes engaging matters of public law, criminal lia- bility, or statutory rights incapable of private waiver are generally considered non-arbitrable. The High Court retains power to set aside an award where the subject matter is not capable of settlement by arbitration or where the award conflicts with public policy. Beyond these categories, New Zealand takes a broad- ly permissive approach to arbitrability, consistent with its adoption of the UNCITRAL Model Law. There are no restrictions on the nationality or residence of arbi- trators or parties, and no requirement for government approval of arbitration agreements in commercial mat- ters. 3.3 Advantages of Arbitration Sustained court delays and New Zealand’s bicultural legal foundations give the advantages of arbitration particular resonance. The former has sharpened the commercial case for private dispute resolution; the latter has introduced a dimension of party autonomy distinctive among Model Law jurisdictions. Confidentiality is widely regarded as a practical advan- tage. Arbitral proceedings and awards are generally confidential, a material consideration for commercial parties seeking to protect sensitive commercial infor- mation from the open justice principle that governs court proceedings.
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