Reforms pave way for $60,000 Disputes Tribunal claims

Friday, 11 April 2025

The Disputes Tribunal hears civil claims up to $30,000, but that leaves a ‘justice gap’ as it’s too costly to take many larger claims to the District Court.

The Government intends to beef up the country’s lowest civil court by lifting the value of money disputes it handles from $30,000 to $60,000.

But MPs preparing a report on the Disputes Tribunal Amendment Bill have been told that to really close the civil justice gap, it should go further by lifting the Disputes Tribunal’s claim limit to $100,000, and elevate its referees to magistrates.

Labour is concerned that “the pendulum has swung too far in favour of quick and final justice”, and that there are inadequate protections against errors by the tribunal which could result in people and businesses having large awards made against them.

Those protections might be created by adding a limited right of appeal on errors of law, Labour said.

The Disputes Tribunal hears cases that range from fencing disputes to failures by tradies and retailers to abide by their legal obligations.

In its last financial year, the tribunal heard just over 13,000 disputes, including many on property, some on contractual disputes, and some on short-life appliances, and half of its cases were heard within three months.

At the second reading of the bill on Tuesday, Minister for Courts Nicole McKee said: “New Zealanders don’t have an affordable place to resolve civil disputes between $30,000 and $60,000. It is uneconomic to take claims of this value to the District Court.”

People with financial disputes of $30,000 or less can ask the Disputes Tribunal to settle them. (Video first published June 2022)

The result was a justice gap that was inconsistent with the rule of law.

Modelling suggested that 2000 more money claims a year would be heard a year that otherwise would have been unaffordable to take, McKee said.

At a hearing in February, lawyer Liam Hehir told MPs on Parliament’s Justice Committee: “The increase to $60,000 still leaves a gap in the dispute area between $60,000 to $100,000.”

That was because the costs and risks of taking a civil case to the District Court were not justified for disputes of less than $100,000, and as a result many legitimate civil disputes were never heard, he said.

Under questioning by Labour’s Duncan Webb earlier this year, Karen Hodgsonlaw reform co-ordinator of Community Law Centres, said the tribunal should also be allowed to hear small disputes over wills, and to grant probate, both of which currently had to be heard in the High Court.

Some believe the Disputes Tribunal should be the forum for resolving issues with lower-value wills.

The Community Law Centres provide free legal advice to lower-earning people who need help fighting the likes of landlords, lenders and government agencies. But there was a lot of demand for help with wills and probate.

“It’s a huge issue for us,” Hodgson said. “It’s a total game changer. They have to go to the High Court. That’s a huge amount of what we see.”

“We often find people who have just KiwiSaver, or just a house in the will, but very limited income, and a small will, in a sense that it’s just the one asset,” she said.

Hehir said the court system had prioritised precision and thoroughness over timeliness, and: “Over the years it’s become unworkable for ordinary people.”

Minister for Courts Nicole McKee faced criticism that the Government had not listened to some calls for expanded appeal rights when it lifts the money claim limit on the Disputes Tribunal to $60,000.

The Tenancy Tribunal had a limit of $100,000, and it worked effectively, he said. The Motor Vehicle Disputes Tribunal also had a $100,000 limit.

“I think it would really bridge the civil justice gap,” he told MPs. It create a three-tier jurisdiction, with the Disputes Tribunal, the District Court and the High Court.

Hehir said the tribunal should be allowed to refuse to hear cases that were too complex for it, and were better dealt with by a judge in a higher court.

He also called for the term “referees” to be done away with, and replaced with the higher-powered term magistrates, as well as requiring appointees to the tribunal to be legally trained.

Speaking at the second reading of the bill, Labour MP Duncan Webb said the tribunal was originally conceived of as a small claims forum for claims up to $500, and as a result still had features that were suited to hearing small claims.

This included a ban on lawyers appearing for parties, a rule that tribunal referees only had to have “regard” for the law and not to apply to the law, and no right of appeal.

Labour’s Duncan Webb says summary justice is good, but once the amounts involved get to ‘life-changing’ sums like $60,000, there needed to be safeguards.

“We are a long, long way away at $60,000 from $500,” Webb said.

The sums involved could be “life-changing” for some people, he said.

“$60,000 is more than a year’s income for someone on the minimum wage.”

Webb gave the example of a poor, uninsured driver being sued for crashing into a BMW potentially losing an entire year of their income, without being able to fight the claim against them with a lawyer.

“That could be absolutely devastating,” he said.

If a tribunal referee got that wrong, there would be no ability to appeal, he said.

Webb also called for fees to be waived for people who cannot afford them.

Currently, the fees are $59 for claims up to $2000, $117 for claims from $2000 to $5000, and $234 for claims between $5000 and $30,000.

The Government’s plan was to introduce a fee of $468 for claims of $30,001 to $60,000, if the new limit was introduced.

Webb said: “That $468 is a lot, if you are on a minimum wage.”