The Justice and Electoral Committee has examined the Private International Law (Choice of Law in Tort) Bill and recommends that it be passed with the amendments shown.

The Private International Law (Choice of Law in Tort) Bill is a member’s bill in the name of Sarah Dowie. The bill would establish rules that would apply when deciding which law should be used in cases of tort that have an international element.

A tort is a wrongful act, other than a breach of contract, that results in civil liability. Currently, where an action is brought in a New Zealand court for a tort committed outside New Zealand, the common law rule of double actionability applies. Double actionability is the rule that where a tort is committed outside New Zealand, a tort claim is only successful if it is actionable both in New Zealand and the other country where the events constituting the tort took place. In such a case, New Zealand’s law would apply.

The bill would abolish the rule of double actionability, and establish the general rule that the applicable law is the law of the country where the events constituting the tort occurred. If the tort relates to property damage, the applicable law would be the law of the country where the property was located when damaged. In any other case, the applicable law would be the law of the country where the most significant element, or elements, of the event occurred.

This commentary covers the main amendments that we recommend to the bill. It does not discuss minor or technical amendments.

We recommend changes to the structure of the bill, including dividing the bill into parts and inserting standard provisions such as the interpretation clause. We also recommend changing the arrangement of clauses to follow a more logical order.

Clause 4 is a standard clause in New Zealand legislation stating that the bill would bind the Crown. This means that the choice of law rules would apply to tort claims by and against the Crown.

The Crown Proceedings Act 1950 contains rules relating to the Crown’s civil liability and rights, and would usually apply to tort proceedings involving the Crown. Because this bill could result in the application of a foreign tort law, there may be confusion about whether the rules of the Crown Proceedings Act apply.

To remove doubt, we recommend amending clause 4 to make it clear that nothing in the bill would limit or affect the application of the Crown Proceedings Act to any claim in tort by or against the Crown.

The bill as introduced does not specify that the bill would also apply to torts committed in New Zealand. To clarify this, we recommend inserting clause 5(4) to state that the bill would apply to events occurring in New Zealand as it applies to events occurring in any other country.

As personal injury claims can arise despite the current statutory bar on personal injury claims in section 317 of the Accident Compensation Act 2001, we think it is desirable to amend clause 7 to state specifically how the bill would treat personal injury. Our proposed insertion of clause 7(2)(aa) would make it clear that the applicable law would be the law of the country where the individual was when they were injured.

We also recommend inserting clause 7(3) to include a definition of “personal injury”. This would clarify that it means a physical injury, or mental injury, or both a physical and mental injury, and includes disease or infection.

We note that the bill would not affect the operation of the Accident Compensation Act.

As introduced, the bill does not mention whether parties can enter into agreements choosing the law to apply to tort claims (known as “party autonomy”). It is common for parties to international commercial contracts to choose the applicable law, sometimes including claims based in tort, not just in contract. Courts tend to respect parties’ intentions and their choice of law, subject to mandatory provisions. This promotes legal certainty in the contract.

We recommend inserting clause 11(2)(c) to make it clear that this legislation would not preclude the recognition or development of a choice of law rule. This would allow the courts to determine whether and when parties can choose the law applicable to a tort claim.

Clause 11(2)(b) specifies that questions of procedure are to be determined according to New Zealand law. It is desirable that the distinction between substance and procedure should be able to evolve over time. We recommend inserting clause 11(3) to clarify that the courts would be able to further develop this distinction through case law.