Product Liability 2009 - Arnold & Porter LLP

New Zealand
244
Simpson Grierson New Zealand
resolution. The consent of the parties is required for each of these
mechanisms except a pre-hearing judicial settlement conference.
The Rules also require consideration at routine case management
conferences of whether some form of alternative dispute resolution
(i.e. other than a court trial) is appropriate.
5 Time Limits
5.1 Are there any time limits on bringing or issuing
proceedings?
There are a variety of different time limits that can prevent
proceedings from being brought or issued.
5.2 If so, please explain what these are. Do they vary
depending on whether the liability is fault based or strict?
Does the age or condition of the claimant affect the
calculation of any time limits and does the Court have a
discretion to disapply time limits?
In civil proceedings the relevant time limits are generally set out in
the Limitation Act. There are some exceptions e.g. equitable claims
for breach of fiduciary duty.
In contract cases, the time limit will ordinarily expire six years after
the “start point” for contract claims: the date of the breach of
contract. In negligence claims, there are different “start points” for
different types of claims. Ordinarily the relevant start point will be
the date when the relevant damage has occurred. In the context of
a claim for personal injury caused by negligence, the time limit will
ordinarily run from the time when bodily injury of the type
complained of was discovered or was reasonably discoverable as
having been caused by the acts or omissions of the defendant - see
Trustees Executors v Murray [2007] 3 NZLR 321 (SC). Once the
applicable “start point” is reached, a claimant in a negligence action
ordinarily has six years within which to commence proceedings, but
a shorter two-year time frame normally applies where the
negligence action is for personal injury. In claims for accident
compensation, a claimant is required to lodge a claim within 12
months, but the Accident Compensation Corporation is not entitled
to refuse a claim because of lateness unless the claim’s lateness
prejudices the Corporation in its ability to make decisions. The
general time limit under the Fair Trading Act is three years after the
matter giving rise to the contravention or application occurred, and
the Building Act contains a special “long stop” ten-year limitation
period.
The Limitation Act also contains additional provisions that apply to
people under disabilities at the time when the cause of action
accrues. People under the age of 20 or detained under the Mental
Health (Compulsory Assessment and Treatment) Act 1992 are
disabled for this purpose. Where a claimant is a person under a
disability in these terms, the normal period of limitation is
extended. The ordinary time limits will also not apply in cases of
fraud or concealment.
5.3 To what extent, if at all, do issues of concealment or fraud
affect the running of any time limit?
Section 28 of the Limitation Act postpones the “start point” from
when the period of limitation (e.g. of six years) begins to run in
claims based on fraud or where the right of action is concealed by
fraud. In such cases the period of limitation does not begin to run
until the plaintiff has discovered the fraud or could with reasonable
diligence have discovered it.
6 Remedies
6.1 What remedies are available e.g. monetary compensation,
injunctive/declaratory relief?
A variety of different remedies is available in different types of civil
cases - subject to bars in specific instances. Common law causes of
action can result in remedies such as orders for damages,
injunctions, declarations, payment of interest, taking of accounts,
inquiries, and costs. Statutory causes of action are often
accompanied by specific statutory remedies, e.g. orders under the
Fair Trading Act for payment of amounts of loss or damage, or to
disclose information or publish advertisements.
6.2 What types of damage are recoverable e.g. damage to the
product itself, bodily injury, mental damage, damage to
property?
As explained earlier, the accident compensation legislation bars
civil claims for compensatory damages for most types of personal
injury and provides statutory compensation instead. Subject to that
major exclusion, damages are recoverable for bodily injury, mental
damage, damage to the product itself, and damaged property. A
wide variety of types of damages can be awarded.
6.3 Can damages be recovered in respect of the cost of
medical monitoring (e.g. covering the cost of investigations
or tests) in circumstances where the product has not yet
malfunctioned and caused injury, but it may do so in
future?
It is unclear whether damages could be recovered for medical
monitoring costs at a time prior to a product malfunctioning.
Ordinarily a claimant will need to demonstrate that a cause of action
has accrued.
6.4 Are punitive damages recoverable? If so, are there any
restrictions?
The availability of punitive or exemplary damages in New Zealand
was addressed in A v Bottrill [2002] 3 WLR 1406, [2003] 2 NZLR
721. It was held by a majority decision that, under the common law
of New Zealand, in exceptional and rare cases inadvertently
negligent conduct which was so outrageous as to call for
condemnation and punishment could fall within the scope of the
jurisdiction to award exemplary damages - even though the
defendant had not intended to cause the harm or being consciously
or subjectively reckless as to the risks involved. As indicated
above, questions of whether exemplary damages are available in
negligence cases and, if so, whether conscious wrongdoing or
subjective recklessness are necessary elements, are under
consideration by the Supreme Court following a hearing in March
2009 in the Couch v Attorney-General litigation. The unresolved
issues in the Couch litigation, the continuing controversy in
Australia and England on the fundamental question of whether
exemplary damages should be awarded and the contrasting
approaches of the majority and minority in Bottrill, together mean
that the law in this area should be regarded as unsettled at least until
the Supreme Court’s decision on the issue in the Couch litigation is
released.
In New Zealand the amounts awarded by way of exemplary or
punitive damages are modest by international standards.
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