Colin Craig case highlights need for law change

12 October 2016

With the possible exception of an All Black’s toilet malpractice, no news story of the last couple of weeks has been bigger in New Zealand than the defamation case taken by Jordan Williams against Colin Craig.

For four weeks we have been reading about the colourful details of the relationship between Craig and his former Press Secretary Rachael McGregor, who featured extensively in the High Court trial in Auckland as well as many other well-known New Zealanders.

Eventually the jury awarded Williams $1.3 million in compensation which is probably a New Zealand record for a defamation case and certainly it was a case where significant exemplary or punitive damages were awarded.

What we didn’t know while following the defamation case was that there had been earlier important litigation in the Human Rights Review Tribunal.

This followed a mediated settlement of a claim brought by Rachel MacGregor for sexual harassment. The claim was actually filed on the day of MacGregor’s departure.

Following mediation it was alleged that Craig had breached confidentiality provisions in the human rights legislation and in the settlement agreement itself. The Tribunal considered whether there had been a breach of confidentiality, found there had, and awarded MacGregor $120,000 for severe humiliation, loss of dignity, and injury to feelings inflicted on her by Craig.

Because MacGregor was a contractor, not an employee, at the time her employment terminated, she had to bring proceedings before the Tribunal for sexual harassment. Had she had been an employee she could have taken a case to the Employment Relations Authority.

In fact when employees have been sexually or racially harassed, or subjected to discrimination in employment, they have the choice of bringing proceedings before either the Tribunal or the Authority.

During the reign of Queen Elizabeth I, the Court of Chancery and the common law courts competed for pre-eminence. Up until 1875, litigants would often receive significantly different remedies depending on the courts they filed with.

We often consider such judicial discrepancies to be limited to time gone by. However New Zealand still has significant inconsistency in the guiding legislation dictating the remedies awarded by the Tribunal and the Authority.

Two recent decisions of the Tribunal, the first concerning Colin Craig as discussed above, and the other involving Credit Union Baywide, have received awards of $120,000 and $98,000 respectively.

These cases indicate the amount of damages granted in the Tribunal is likely to be higher than what has traditionally been awarded by the Authority. This is partially because the Tribunal decided that awards had fallen behind inflation and needed to be lifted.

The range of awards in the Tribunal has been set by the tribunal as up to $10,000 for less serious cases, up to $50,000 for more serious cases and finally in excess of $50,000 for the most serious cases.

In both jurisdictions most disputes are settled in mediation. However, where the confidentiality obligations imposed on or agreed to by the parties are breached, the Tribunal can award compensation for humiliation and distress. The Authority cannot. The Authority can only award a penalty for breach of the settlement provisions of up to $10,000 in the case of an individual and up to $20,000 in the case of a corporation. A big difference. Ultimately, this is due to a statutory difference.

In simple terms the lesson is that two people with exactly the same employment-related sexual harassment claim may receive a different outcome depending on where they file the proceedings.

Do readers think this is fair?

It should be noted that by the nature of its jurisdiction, perhaps the Human Rights Review Tribunal typically hears more morally offensive and emotive cases, which are often dealt with more seriously.

Regardless, the problem of having different legislative provisions for these judicial bodies is that they can only be fixed by Parliament.

The Employment Court has previously stated that employment awards should be higher, yet the Employment Relations Authority has continued to lag behind.

Like the reforms that took place in the 19th century resolving the glaring inconsistencies between the common law and the Court of Chancery, we need a legislative change to the two Acts to achieve consistency.

Currently, the extent of justice you get can be heavily influenced by where you file.