The Select Committee considering the Fair Trading Amendment Bill did not make its report by the due date of 12 August 2020. What does that mean for the future of reforms that would, if enacted, fundamentally change New Zealand's commercial law framework?
In December 2019, a Fair Trading Amendment Bill was introduced to Parliament that would introduce prohibitions on unconscionable conduct and unfair contract terms in business-to-business transactions (see a summary here
The proposals have generated significant debate, with more than 52 submissions provided to the Economic Development, Science and Innovation Select Committee earlier in the year (with approximately half generally opposed to the proposals).
As a result, the report of the Committee discussing those submissions had been keenly anticipated.
However, yesterday, the Ministry of Business, Innovation and Employment (MBIE) advised that the Fair Trading Amendment Bill had been discharged from the Committee on 12 August 2020 without a report from the Committee and that this means that the Bill as introduced will move onto the second reading stage, assuming that the next Parliament reinstates it following the election (all business before Parliament lapses when it is dissolved, but typically the next Parliament reinstates most if not all business).
Given, from our perspective, the proposed amendments will have far reaching impacts on how businesses deal with one another (which is reflected in the high number of submissions received), it is to be hoped that the Bill will be referred back to the Select Committee after the election to complete the process of considering the submissions raised and issuing a report with recommended amendments to the Bill, so that a thorough and proper process can be completed that achieves the best regulatory outcome for New Zealand. The proposals are too significant to have this important step truncated.
This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice. If you require any advice or further information on the subject matter of this newsletter, please contact the partner/solicitor in the firm who normally advises you, or alternatively contact one of the partners listed below.