Max Pakinga-Barber

The Regulatory Standards Act 2025 (“Act”) sets standards of legislative quality and provides for assessment against those standards. Most of the Act comes into force at a date set by the Governor-General, but no later than 1 July 2026.

This Act has been the subject of much controversy. Despite critics claiming it would restrict Parliament’s power to legislate, the Act is not this dramatic in effect. Its procedures are intended to promote voluntary compliance with standards of good law-making, rather than imposing those standards by force.

Because of this, Act is likely to be a particularly useful tool for advocacy organisations and others seeking to promote law reform.  

What the Act does

Scope

The Act mainly achieves its purpose are through the broad principles of responsible regulation set out in s9 of the Act (“Principles”).

The Principles are varied, ranging from markers of good law-making like clarity and cost/benefit analysis, constitutional conventions recognising the importance of judicial review and that legislation should not apply retrospectively, and more political principles like protection of individual liberty and providing compensation for property impaired by legislation. The Principles are likely to be fleshed out in guidance issued jointly by the Minister for Regulation and the Attorney-General under s 26 of the Act.

The Principles apply to most legislation and regulation. There are limited exceptions, including Treaty settlements, budget legislation, and rules of court (among others).

Benchmarking new legislation

Government legislation and amendments introduced to Parliament after commencement of the Act will require assessment against the Principles. The same applies to all regulation made after that date, unless certain limited exceptions apply. Member’s bills, local bills, and private bills are excluded. The new process requires a “consistency accountability statement” that sets out consistency of the proposed legislation or regulation with the Principles. If inconsistency is found, the responsible person(usually a Minister) must provide a statement with the reasons why.

Failure to comply with the Principles does not mean that legislation cannot progress. But the benchmarking requirements ensure that there is political accountability for failure to comply with the Principles.

Reviewing existing legislation

Existing legislation can also be assessed against the Principles. This can happen in three ways.

Inquiries by the Regulatory Standards Board

The Regulatory Standards Board (“Board”) is tasked with inquiring into and reporting on existing primary legislation for consistency with the Principles. It can also look at existing regulation in limited circumstances.

The public can trigger an inquiry by making a complaint, although the Board does not have to launch an inquiry in response to every complaint. Inquiries must be determined without a hearing.

Upon completion, the Board must report its findings to the Minister for Regulation, and to the government agency and Minister responsible for the legislation. The report is also made public.

Departmental reviews

Government can initiate reviews for legislation they administer.

If a review is undertaken, the agency reports on consistency with the Principles. For legislation, the responsible Minister must present the assessment and explanation to Parliament, and what (if anything) the government plans to do about it. For regulation, the agency must publish the report, along with any future action proposed to address inconsistency. There is no legal requirement for the relevant person to act on any proposed actions to address inconsistencies identified during a review.

Regulatory system reviews

The Minister for Regulation can initiate a review of any regulatory system. While “regulatory system” is undefined, such reviews are likely to have a broader ambit than departmental reviews of legislation.

The Ministry for Regulation has powers to require information from various public bodies and officials to carryout these reviews.

What the Act does not do

Contrary to some commentary on the Bill, the Principles do not affect the validity of non-compliant laws. They do not constrain Parliament’s powers or those acting under delegation from Parliament, from passing legislation.

The legal rights and obligations of individuals are not affected by the Principles.

The Act does not provide a mechanism for complaints about the impact of legislation (or decisions under legislation) on individual interests. The Board is expressly prohibited from considering individual outcomes or impacts when undertaking its inquiry functions.

The advocacy opportunity

The Act can generate and maintain momentum for law reform.

The Act provides two essential tools for this:

1.      Inconsistency reports and explanations, and

2.      The Board inquiry procedure.

While the regime is new and untested, there are some law reform projects that will clearly benefit from these tools.

Poorly drafted legislation

The Board complaints procedure provides a strong mechanism to draw attention to poor or uncertain drafting. Relevant principles include that legislation should be clear and accessible, and the cost/benefit principle. The Board is expressly empowered to consider how legislation has applied in practice when inquiring under cost/benefit Principle.

Fees and levies

Fees and levies are set on a cost-recovery basis, and payers are selected on either a ‘beneficiary pays’ or ‘polluter pays’ basis.  

Complaints under these Principles offer a strong basis for influencing fee and levy settings.

Licensing

Licensing includes professional regulation applied to lawyers, accountants, engineers and others, as well as controlled activities like driving and dealing with hazardous substances.

The Board complaint procedure cannot be used to challenge individual licensing decisions but the Principles in ss 9(a)(v) and 9(h) can be used to draw attention to legislation that grants discretion to officials that is open to abuse, or broader than necessary to achieve the legislative purpose.

De-regulation

The Principles recognise that legislation may not be the best option and other options such as taking no action, reliance on the private sector, or voluntary compliance regimes should be given genuine consideration.

Unlike existing Regulatory Impact Statements (that go to Cabinet), consistency assessments can ‘brand’ a Bill, requiring the Government to publicly justify their preferred option.

For further information on this or similar issues please contact Director, Brigitte Morten

Summary

A group of airlines challenged a Commerce Commission decision on monopoly regulation on the basis of mathematical errors. While the court recognised the decision was unlawful, it refused the airlines’ request to quash the decision, which was subject to a concurrent appeal.

Background

Part 4 of the Commerce Act 1986 (“Act”) institutes regulation on specified natural monopolies (including airports) that is overseen by the Commerce Commission. Regulations can include requirements to disclose financial information, as well as price controls and quality standards. The purpose of Part 4 is to promote workably competitive market outcomes (similar to how the market would operate if there was no monopoly), including incentivising suppliers to innovate and invest, and limiting excessive profits.

In making information disclosure and price-quality regulation, the Commission make and use instruments called input methodologies(“IMs”). Suppliers must use the IMs to implement their regulatory obligations. . The Commission is required to review IMs every 5 years, and to undertake extensive public consultation when doing so.

The cost of capital IM is a proxy for the reasonable rate of profit observed in workably competitive markets. One component of the cost of capital is the equity beta, a measure of market risk.  Because the equity beta cannot be determined empirically, the Commission determines the appropriate beta as an exercise of judgement. This exercise of judgement is informed by the past returns of comparable firms, and mathematical modelling (among other things).  

In the Commission’s 2023 IM review, it changed certain parameters for assessing the equity beta and arrived at a final figure (“IM Changes”). To do so, they relied on modelling that was later found to contain mathematical errors (“R-Code Errors”).

In early 2024, a number of airports (“Airports”) appealed the IM Changes under s 52Z of the Act. The Commission and several airlines (“Airlines”) were respondents in the appeal. The appeal related primarily to the changes made to the parameters of the equity beta, but also relied on the R-Code Errors.

As the appeal progressed, disagreement arose as to whether the Part 4 appeal process was capable of correcting the R-Code errors if the other grounds of appeal were unsuccessful. In response to this disagreement, the Commission agreed to undertake a second IM review to correct the R-Code Errors if the court did not do so on appeal.

However, this commitment was not satisfactory to the Airlines, who filed separate judicial review proceedings seeking for the IM Changes to be quashed (an option not available to the court in the appeal).

The Airport appeals were heard in July 2025.The court is yet to issue a decision.

The case

The Airlines challenged the IM Changes on the basis that the R-Code Errors rendered the IM Changes unlawful. They sought an order for the IM Changes to be quashed.

Mistake of fact

The Airlines’ primary ground of challenge was that the R-Code Errors were a mistake of fact that had materially influenced the IM Changes, thereby rendering those changes unlawful.

The court recognised that mistake of fact was a stand alone ground of judicial review in New Zealand law, something that had previously been unsettled. The ground rested on the need to ensure procedural fairness – where an incontrovertible factual mistake influenced a decision, an affected party could not be said to have had “a fair crack of the whip” (E v Secretary of State for the Home Department [2004], as cited in the judgment).

The requirements for establishing mistake of fact are high. The mistake has to be both uncontentious and objectively verifiable, must not have been caused by the applicant, and must have materially influenced the outcome. It could not apply to the evaluative exercise the decision-maker undertook in reaching the decision.

The R-Code Errors satisfied all elements of the test. The Commission had admitted the errors, which related to an objective mathematical formula devised by the Commission. While the IM Changes were an evaluative decision for the Commission’s judgement, the R-Code Errors had clearly influenced the final outcome.

Accordingly, the court held that the IM Changes were unlawful on the first ground.

Other grounds of review

The court rejected the Airlines’ overlapping challenges based on errors of law and unreasonableness. The Commission’s primary error was a mistake of fact influencing its ultimate decision. These two grounds, which went to the decision itself, sat uncomfortably with that analysis.

Should the court quash the IM Changes?

While the IM Changes were held unlawful, this did not mean that the IM Changes needed to be quashed, as sought by the Airlines. The court had to determine whether it was appropriate to grant this relief given that the R-Code Errors were in issue in the concurrent Airport appeal.

The Airlines emphasised that the concurrent appeal should not limit the constitutionally important right to judicial review. The court’s obligation to uphold the rule of law, they argued, required that restrictions on judicial review should only be recognised where there was clear Parliamentary intent.

While recognising the importance of judicial review, the court rejected this approach. The correct approach was to instead assess whether appeal was available, adequate, and a more appropriate forum for determining the dispute in particular circumstances. If it was, the rule of law was upheld through the statutory appeals process, and there was no constitutional issue in withholding relief in concurrent judicial review proceedings.

The court had already determined, in a previous decision, that the Airport appeal was an available and adequate forum to determine the consequences of the R-Code Errors. If the appeals were granted, the court was empowered to amend the IM or refer it back to the Commission. If they were not, the Commission’s commitment for a second IM review to address the errors would apply.

Further, the Airport appeal was clearly the appropriate forum for determining the consequences of the R-Code Errors. Parliament, in enacting the Part 4 appeals process, had intended to strike a careful balance between accountability and commercial certainty, and to limit tactical use of judicial review. While judicial review might be more appropriate in some cases under Part 4 (such as procedural irregularities or apparent bias), it was implicit in Part 4 that judicial review should not be used where it could interfere in the appeals process.

The court therefore declined the relief sought by the Airlines.

Result

While the court upheld the first ground of review, it refused to exercise its discretion to grant the relief sought. The consequences of the R-Code Errors will be dealt with in the Airport appeal or, failing that, in the Commission’s promised IM review.

The decision provides important clarification of the availability of judicial review where there is a parallel statutory appeal process. While judicial review remains theoretically available, applicants will struggle to obtain relief if the relevant subject-matter overlaps with a concurrent appeal process. In general, the decision makes it harder for applicants to use judicial review tactically or for procedural advantage in the context of an appeal.

For further information on this or similiar cases please contact Dirctor Brigitte Morten

Parliament’s Environment Committee is considering the Fast-track Approvals Amendment Bill (“Bill”). Franks Ogilvie submitted on the Bill, drawing on our experience advising clients under the current environmental and consenting system. We support the Bill’s direction but identify several opportunities to strengthen its ability to deliver timely, certain, and enabling development decisions.

Key changes introduced by the Bill

The Bill amends the Fast-track Approvals Act 2024 (“Act”). While the Government announcements on the Bill focused on a new streamlined process for fast-tracking of supermarket consents, the changes introduced in the Bill are intended to better promote delivery of the Act’s purpose of facilitating the delivery of a range of infrastructure and development projects with significant regional or national benefits.

Comment and appeal rights‍

The Bill narrows who may comment on fast-track approval applications. Under the current Act, some expert panels have exercised their discretion to invite comment generously, including to those not directly impacted by proposed activities or opposed to certain activities on principle. The existing Act automatically grants commenters rights to appeal approval decisions.  

The Bill clarifies that panels can only invite comment at their discretion where there is a pressing need not fulfilled by those that the Act requires be given comment rights (including local authorities, iwi, and government departments). Even where discretionary commenters are invited, they will lose rights to appeal panel decisions.

Technical and administrative improvements

The Bill introduces several technical improvements aimed to make processing and decision-making on fast-track applications faster. The Environmental Protection Agency is empowered to undertake initial processing tasks concurrently rather than sequentially, there is greater flexibility to amend applications after they are submitted, and a maximum time limit for panels to reach a decision is introduced.

Listed projects

In Ngāti Kuku Hapū Trust v Environmental Protection Agency [2025] NZHC 2453, the court struck down Port of Tauranga’s fast-track wharf extension because its application strayed beyond the project description set out in Schedule 2 of the Act. The Bill corrects the description of that project, allowing it to proceed to a panel. It also introduces a limited power for the Minister to correct listed project descriptions. This power is likely to be important given that another fast-track applicant has withdrawn their application due to the same issue that arose in Ngāti Kuku.

Government Policy Statements

A new power allows the Minister to issue Government Policy Statements to guide how ‘significant regional or national benefits’ are assessed in particular sectors. These statements must be considered by Ministers referring projects to expert panels, and by the expert panels themselves when deciding on approval applications.  

Franks Ogilvie’s submission on the Bill

Franks Ogilvie submitted in support of the Bill, but argued that the Bill could go further to deliver on the fast-track regime’s initial promise.

Limit opportunities for interference and judicial red-tape

We supported the changes to limit the rights of expert panels to invite commenters at their discretion, and limiting the appeal rights of discretionary commenters. Participation rights for those with a direct interest in fast-tracked activities are important but individuals or groups not directly affected should not be able to interfere with approval applications.  

We recommended a number of further changes to limit inappropriate interference in fast-track applications, including:

·        Allowing panels to confine comments sought to specific subject-matter;

·        Prohibiting commenters from making legal submissions;

·        Requiring panels to provide written reasons when exercising their discretion to invite comments;

·        Introducing a procedural principle to require panels limit commenters to the minimum number  necessary to determine the application; and

·        Including a stronger privative clause to deter strategic judicial review.

These changes would better protect the regime from the types of delays and litigation that have hindered major projects under existing environmental and planning laws.

Technical improvements

We supported most of the amendments to enhance processing efficiency. However, we noted that the mandatory 60-day timeframe for panel decisions may prove unrealistic in complex cases, and recommended the Minister be granted a power to make exemptions to the timeframe in these cases.

Ensuring listed projects can proceed as Parliament intended

We supported the new power to correct the descriptions of Schedule 2 listed projects to ensure that fast-track applications are not hindered by court challenges based on legal technicalities. While the clause allows the Minister to amend legislation (known as a ‘Henry VIII clause’), the power was sufficiently narrow and limited that it raised no constitutional issues.

Strengthening decision-making

We supported the introduction of Government Policy Statements, which will give panels better guidance about the Act’s ‘significant regional or national benefit’ test. However, we recommended that the policy statements be given greater weight in decision-making.

We also suggested improvements to s 85(3)of the Act, which governs when panels are permitted to decline approval applications. We highlighted that some early panel decisions have been less enabling than the proponents of the Act may have expected.

To make decision-making more explicitly enabling, we recommended the following changes:

·        Clarifying that projects that have reached an expert panel are deemed to have significant regional or national benefits; and

·        Placing the onus on opponents to prove disproportionate adverse effects that outweigh these benefits.

To read our full submission, please click here.

For further information on this or similar issues please contact Driector Brigitte Morten.