'Be very careful': Businesses warned of raft of changes by NZ courts

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Businesses will need to be increasingly mindful of a wave of significant changes in New Zealand and around the world that could land them in hot water with regulators, shareholders, customers, employees and the courts.

MinterEllisonRuddWatts’s Litigation Forecast for 2024 highlights a multitude of risks facing businesses, with climate change litigation and greenwashing matters topping a long list of matters.

A landmark judgement of relevance to larger corporations was a recent Supreme Court decision which gave climate activist Mike Smith the right to sue seven big polluters for their role in causing climate change.

That case had drawn international interest and is expected to encourage others to take novel legal approaches to such matters as the protection of biodiversity, oceans and water.

Law partner Jane Standage said any claims about the environment, sustainability and governance (ESG) matters needed to be carefully crafted to avoid accusations of greenwashing.

“ESG terms are very vague. They mean different things to different people and they are continuing to evolve as concepts and so when you make your statements about your ESG, credentials and targets, you have got to be very careful to explain what precisely you mean,” she said.

“And also to check that the meaning of the words that you use don’t change over time as things evolve.”

The report also covers several regulatory changes in New Zealand and around the world which were particularly relevant to exporters, as global sanctions regimes increasingly affect international business and trade.

Closer to home, the Financial Markets Authority’s regulatory priorities and litigation themes were changing to align with the government’s priorities to cut red tape.

There was also likely to be changes made under the leadership of the newly created position of minister for regulation, in addition to those already signalled by Commerce and Consumer Affairs Minister Andrew Bayly.

Recognition of tikanga Māori by New Zealand courts was also changing with implications for a wide range of laws, particularly around property rights.

Managing cyber risk was another complex matter for directors and boards to grapple with, along with generative AI, which would have implications for intellectual property and copyright.

Standage said cyber criminals were becoming more sophisticated, which increased the risk to businesses and the potential for class action for significant breaches.

“We know that the regulators are starting to look to directors for leadership in here. And class actions could be on the horizon,” she said.

“We’ve seen at least one in Australia, where information has been disclosed and there’s a class action seeking compensation for those harmed by cyber breaches.”

In addition, health and safety issues were also becoming an increasing risk for businesses.