New legislation to improve existing law relating to wills, inheritance and arbitration has been introduced to Parliament today, says the Associate Justice Minister Clayton Cosgrove.

Mr Cosgrove said the Wills Bill, the Succession (Homicide) Bill and the Arbitration Amendment Bill, do not contain radical law reforms, but rather build on the existing law and make it easier to understand and to apply.

“The Law Commission has advised the Government that while the current law in these areas generally works well, there are a number of ways it could work better. The legislation implements the Commission’s recommendations to improve and clarify the existing law, and to make it more user-friendly for New Zealanders,” he said.

“Existing wills that have been properly made still remain valid. If you are happy with your will then you won’t need to change it. This Bill simply improves the existing law by making it easier to give effect to will-makers’ intentions and law easier to understand," he said.

“The Bill will clearly define the circumstances in which a person will be prevented from benefiting financially from their victim's death, and will also explain how the property should be disposed of in such cases,” Mr Cosgrove said.

“The Bill changes and explains the confidentiality provisions around arbitration and also enhances consumer rights over purchase agreements containing arbitration clauses."

While the current law generally works well and no radical change is called for, the Law Commission has identified minor aspects that could be modernised.

The current wills legislation is set out in six statutes, the first of which is a British statute dating back to 1837 that is expressed in archaic language and the style of its time. A prime aim of the Wills Bill is to restate the current legislation in modern language in a single statute to make it more user-friendly.

Existing wills that have been properly made still remain valid. Generally the changes will only affect wills made after the new Bill is enacted and comes into force, so if you are happy with your current will, there is no need to change it.

There are two exceptions to that - changes to the High Court’s powers to correct errors in wills and use external evidence to interpret wills will apply to wills made before the Bill comes into force. The purpose of those new enhanced powers is to allow the Court to give better effect to will-makers' intentions as expressed in their wills.

The proposed changes mean it will no longer be necessary to sign at the end of the will, as that has been proven to be trap for "do it yourself" will-makers. The will shall be valid regardless of where it is signed, provided the other formalities are also complied with. For example, the will still has to be witnessed and signed by two witnesses, who must be present when the will-maker signs. However, the Bill will also enable the High Court to validate a will that does not meet these formalities, provided the Court is satisfied it expresses the will-maker’s intentions.

Currently, a formal separation order prevents a person inheriting from his or her estranged spouse or civil union partner if that person dies without a will, but not if he or she dies leaving a valid will. The Wills Bill will prevent an estranged spouse or civil union partner from inheriting under the deceased’s will if a separation order was in force at the time of death.

Nobody is currently required to seek legal advice to make a will and that won’t change under the new legislation. The Bill seeks to make the law clearer, more accessible, and to make it easier to dispose of property in certain circumstances. Nevertheless, it may be sensible to consult a lawyer to ensure that nothing is overlooked, formalities have been met and that the will gives full effect to your intentions.

Existing provisions that automatically allow people aged under 18 who are, or have been, married, in a civil union, or de facto relationship will be retained, but minors who have agreed to marry or enter into a civil union with another person will also now be able to make a will in contemplation of that marriage or civil union. The will becomes valid if and when the marriage or civil union actually takes place.

Existing provisions that allow minors who are not or never have been in one of these relationships to apply for approval to make a will are being retained and enhanced. There will no longer be a minimum age (currently 16) for seeking approval, and the Court will be able to grant general approvals to minors to make and revoke wills if it is satisfied the minor understands their actions. At present these minors must reapply to the Court every time they want to make or revoke a will.

Information on the number of wills contested for validity, compliance with technical requirements as to how property can be disposed of and so on, can not be readily obtained from court records.

Overall, it is difficult to say whether the Bill will reduce the number of disputes referred to the Courts. Disputes over the validity of a will or gift can currently be referred to the Courts and that will continue to be the case. However the Bill should make the law easier to apply and allow better effect to be given to the will-makers' intentions.

The key Acts that allow a substantive challenge to the way in which a testator has chosen to distribute his or her property are: the Family Protection Act 1955, which allows family members to claim against the deceased’s estate for maintenance and support where the will-maker has failed to make adequate provision for them; the Law Reform (Testamentary Promises) Act 1949 which allows claimants to seek redress from the deceased's estate for the failure to provide a promised reward for services rendered or work performed, and the Property (Relationships) Act 1976 relating to the division of property where one spouse, de facto partner or (since 2005) civil union partner dies, whether or not the relationship had ended before that person died.

While the general principle that a killer cannot inherit from their victim is well established by case law, how it should apply can be uncertain in individual cases. Currently these uncertainties are resolved by the courts on a case-by-case basis, which can be costly and slow. The intention of the new legislation is to clarify the general rule that a killer cannot inherit from their victim’s estate, define the type of killings that will prevent a killer benefiting from the victim’s death, reduce the need to go to court, and reduce the scope of any disputes that do arise.

Otherwise, however, the Bill generally recognises that a killer should not be deprived of pre-existing interests, like a valid prior claim under the Property (Relationships) Act, provided that those property interests are not made more valuable or certain due to the killing.

The Bill draws its definition of the types of killings (i.e." homicide") that will prevent a person from profiting from their victim's death from the existing criminal law relating to murder and manslaughter. Battered person syndrome is not a defence to murder or manslaughter as such. Therefore someone who - acting recklessly or intentionally - unlawfully kills their abuser, will not be able to inherit from them. However, battered person syndrome may be relevant to whether a person who kills their abuser was acting in self-defence. If they were acting in self-defence, the killing will not be unlawful in the first place and they will therefore not be disinherited.

It is worth noting that an abuser who unlawfully kills their partner will also be subject to the Bill and will not be able to benefit from that person’s estate.

The general rule is that a person who - acting intentionally or recklessly - unlawfully kills another will not be able to inherit from their estate, even if the motive for the killing was merciful. These cases, often referred to as ”mercy killings”, will not be specifically excluded from the prohibition on profiting.

There will be two exceptions, however. First, a person who survives a suicide pact (an agreement between two or more persons to end their lives, whether or not each is to take their own life) will not be disinherited.

Secondly, there will be a limited exception for cases of “assisted suicide”. Assisted suicide is narrowly defined in the Bill and essentially concerns cases where the deceased asked the alleged killer for help to commit suicide.

Arbitration is a method of dispute resolution. It involves the settlement of a dispute by an independent person to whom the conflicting parties agree to refer their claims to resolve their dispute. One of the distinguishing features of arbitration is that the parties agree on the person, the arbitrator, who will decide the dispute. This can be contrasted to litigation where a Judge determines a dispute.

Although many arbitrators are lawyers, some arbitrators are not. Instead they have technical skills and qualifications, such as engineering, building or business management. Many arbitrators have also undertaken training in principles and practices of dispute resolution. Generally, a dispute that can be the subject of a civil proceeding can be referred to arbitration. Criminal proceedings cannot.

In 2003 the Law Commission reviewed the Arbitration Act 1996 to determine what, if any, problems had arisen during the first few years of the Act’s operation. The Law Commission concluded that it appeared to be working well but that addressing certain identified problems would significantly improve the operation of the Act. This Bill reflects the recommendations proposed by the Law Commission as a result of their review.

Most arbitration is private commercial or contractual disputes – for example, between a small builder and a house owner, or a farmer and a share-milker. However the Act also applies to consumers.

The Bill enhances consumer rights. Under the current Act, when a consumer enters a contract with a trader they may also sign an arbitration agreement, often without realising they have agreed to go to arbitration, should a dispute arise.

The amendments will enable parties to decide, after a dispute has arisen, whether arbitration is the most appropriate form of dispute resolution. If both parties agree then arbitration of a consumer dispute may proceed. When deciding the most appropriate forum, parties will still have the option of considering whether to refer the dispute to the Disputes Tribunal. However, once the decision has been made to proceed to arbitration, the option of later referring the dispute to the Disputes Tribunal will be removed.

Confidentiality is considered to be one of arbitration’s major attractions, as arbitral proceedings are closed and confidential. However there are two exceptions to this prohibition.

- The second exception permits disclosure of such information to a professional or other advisor of any party, if the publication, disclosure or communication is contemplated by the Act.

The present exceptions are very narrow and do not permit disclosure of information to interested parties (i.e. a professional or other adviser of one of the parties), disclosures required by law or required by a competent regulatory body but not contemplated by the 1996 Act, (i.e. before the New Zealand Stock Exchange), and disclosures for other legitimate reasons (i.e. filing and prosecution of any application to a District Court or the High Court).

The confidentially provisions do not extend to proceedings outside the arbitration process, in particular, subsequent court proceedings. The Bill clarifies that, as a general rule, arbitral proceedings are private and confidential while court proceedings are to be conducted in public.

The Bill also clarifies the circumstances for exceptions to this general rule. A party may apply to the court for an order for the whole of part of the proceedings to be conducted in private. The Bill sets out the matters a court must consider when considering such an application.

The amendments to the confidentiality provisions balance the principles of party autonomy and open justice. First, parties are free to choose whether they will enable either party to appeal to the courts. Second, the Arbitrators and Mediators’ Institute of New Zealand is developing an Arbitration Appeals Tribunal which will provide a confidential alternative to the courts. Third, the role of the Courts is to develop and clarify the law not only for the immediate parties involved but also for the wider public. Fourth, open justice is a cornerstone principle of the New Zealand court system.

The appointment of an arbitrator in whom all parties have confidence is a fundamental element of arbitration. Normally the parties’ agreement on arbitration includes a procedure for appointing an arbitrator. The Act sets out procedures when there is a failure to follow the agreement.

When a dispute arises and the parties are unable to agree on the selection of an arbitrator, the default procedure, specified in the Second Schedule to the Act, can result in one party’s preferred arbitrator being imposed.

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