RESOLVING DISPUTES IN NEW ZEALAND: FASTER, SMARTER ALTERNATIVES TO COURT

Posted by Jesvin Boparoy in News

Disputes are an inevitable part of life—whether in business, construction, employment, or personal matters. When conflicts arise, many assume the only solution is to head to court. However, traditional litigation is often expensive, time-consuming, and stressful.

In New Zealand, Alternative Disputes Resolution (ADR) plays a key role in helping individuals and businesses reach solutions without lengthy court battles. This article outlines the main types of ADR—negotiation, mediation, arbitration, adjudication, and judicial settlement conferences—and how New Zealand’s approach compares globally.

Why Consider Alternatives to Court?

Court proceedings in New Zealand can be lengthy and expensive, with legal fees rising significantly in recent years. Unlike some countries, litigation funding here is less common, making ADR an attractive option. Beyond cost savings, ADR methods are usually confidential—a significant benefit for those concerned about privacy and reputation. Many ADR processes also foster cooperation, which is valuable for preserving long-term relationships in business or family settings

Exploring the Main Types of ADR

1. Negotiation: Talking it out

Negotiation involves direct discussions between parties to reach a mutually acceptable solution. It is informal, flexible, and often the fastest way to resolve disputes.

2. Mediation: Finding common ground with a neutral facilitator

When negotiation stalls, mediation brings in a neutral facilitator to guide discussions. While the mediator does not impose a decision, they help parties explore solutions. Mediation is widely used in employment, tenancy, and family disputes—and increasingly in commercial matters due to court backlogs post-COVID. Its confidentiality and focus on collaboration make it popular for resolving sensitive issues.

3. Arbitration: A private, binding decision

Arbitration is a more structured process where an independent arbitrator reviews evidence and delivers a binding decision. It is quicker and more flexible than court litigation, allowing parties to agree on the scope of the dispute and appeal rights. Under New Zealand’s Arbitration Act 1996, arbitration is common in commercial and international business contracts.

4. Adjudication: Speedy resolutions in construction disputes

For construction disputes, adjudication under the Construction Contracts Act 2002 provides quick decisions, often within weeks. This process is crucial for maintaining cash flow in construction projects, with decisions binding unless challenged in court.

5. Judicial settlement conferences: Court-encouraged settlements

Judicial settlement conferences involve a judge facilitating discussions to help parties settle before trial. Though the judge does not decide the case, their perspective can guide parties toward a practical solution, reducing time and costs.

How does New Zealand’s approach compare internationally?

New Zealand has embraced ADR across various sectors, often integrating it into legislative frameworks to promote efficient dispute resolution. For example:

• Family disputes: Mediation is encouraged before family court proceedings to foster amicable resolutions.
• Tenancy issues: The Tenancy Tribunal prioritises mediation before formal hearings, expediting tenant-landlord conflict resolution.
• Construction: Statutory adjudication under the Construction Contracts Act 2002 is more prevalent in New Zealand than in many other countries, ensuring swift resolutions to payment disputes.
• Environmental disputes: Under the Resource Management Act 1991, parties involved in Environment Court proceedings are required to participate in ADR processes such as mediation (see: section 268A) before proceedings are heard at the Environment Court, to resolve resource management conflicts efficiently.
• Trust disputes: Section 145 of the Trusts Act 2019 empowers courts to direct parties to mediation or arbitration, for internal matters—disputes between trustees or between trustees and beneficiaries. This compulsory referral to ADR seeks to resolve conflicts efficiently while preserving trust assets and relationships.
• Civil litigation: While not universally mandatory, the District Court Rules provide mechanisms for incorporating ADR into civil proceedings. Rule 1.7 allows parties to apply for an order directing them to attempt settlement through mediation or another specified ADR process. This provision enables the court to encourage ADR utilisation, promoting resolutions that are both time and cost-effective.

Globally, countries like the United States (US) and the United Kingdom (UK) also promote ADR. In the US, court-ordered mediation is common, and non-participation can lead to penalties. In the UK, a 2023 Court of Appeal decision Churchill v Merthyr Tydfil Borough Council [2023] EWCA Civ 1416  held that courts can compel parties to engage in ADR, marking a shift from earlier reluctance. Proponents of mediation highlight its ability to offer creative solutions—such as apologies—that courts sometimes cannot provide or compel (even in a defamation context).

Final Thoughts

Disputes are never pleasant, but resolving them does not always require a courtroom showdown. Alternative Dispute Resolution provides accessible, flexible, cost-effective pathways to settle conflicts.

By understanding the available options, individuals and businesses can choose the most suitable approach—saving time and money and preserving important relationships.

If you would like to discuss some ADR strategies to resolve your case, please contact

Jesvin Boparoy | Senior Associate | Jesvin.Boparoy@shieffangland.co.nz

Kalev Crossland | Partner | Kalev.Crossland@shieffangland.co.nz