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Preface

OVER THE PAST TWO YEARS the Law Commission has been examining various aspects of the law affected by electronic commerce. Our work seeks to ascertain whether any changes to the law are needed to fit the electronic environment in which much business is now carried out.

From the civil law perspective, the Commission started a new project in October 1997 which culminated in the publication, on 1 October 1998, of Electronic Commerce Part One: A Guide for the Legal and Business Community (NZLC R50) (ECom 1). From the criminal law perspective, two reports have been published. The first recommended an amendment to the Crimes Act 1961 to address a specific problem exposed by the judgment of the Court of Appeal in R v Wilkinson.¹ The second report dealt more generally with the issue of computer misuse in New Zealand and the need for criminal legislation.² We discuss some aspects of the Computer Misuse report in chapter 12 and touch on the interrelationship between the criminal law and the law of torts in chapter 13.³

After the Commission’s release of ECom 1 in October last year, the Ministry of Commerce published a paper emphasising the importance of the “knowledge economy” to New Zealand as we approach the twenty-first century: Electronic Commerce: The Freezer Ship of the 21st Century.⁴ Following release of that paper, the Government established an Electronic Commerce Steering Committee (the Steering Committee) to advise it on various issues affecting electronic commerce.⁵ The Law Commission is represented on that Steering Committee. Beneath the Steering Committee is a structure of Sector Committees designed to coordinate work being done in the public sector, and to feed relevant information through to the Steering Committee. In appendix A we set out the structure and membership of these committees. The Steering Committee reports directly to the Minister for Information Technology. The Commission has also consulted on questions of policy with the Steering Committee. The Steering Committee has expressed broad agreement with the Commission’s policy as formulated in this report.

We raised a number of questions for submission in ECom 1. We have received many helpful submissions from both the public and the private sectors. This report responds to those questions. In general we received wide support in submissions for the views expressed in ECom 1. We did however receive some criticism for taking what was perceived to be an over-simplistic approach to our analysis of how the domestic law affected electronic commerce. There is some truth in the suggestion that our analysis of existing law was elementary in nature. But we never aimed to write a textbook of discrete legal topics; rather, we intended to apply well settled principles of law to the electronic environment to ascertain whether adaptation or reform of the law was needed. We adopt the same style in this report.

In this report we make recommendations for enactment of a basic legal framework in New Zealand which will remove core problems arising from the use of electronically generated information and identify further issues on which submissions are sought. A summary of our proposals is contained in chapter 19.⁶ A summary of further questions upon which we seek submissions is listed at pages xxii–xxiii. We recommend a basic statutory framework at this stage because many of the issues identified in this report are truly international in nature and solutions to them will be distilled from work still being done in various international forums. The reasons why we believe a basic statutory framework is required are set out in chapter 2.

Much of our work has focused on developments at an international level. The Commission is pleased that New Zealand is now being represented at international forums considering, amongst other things, electronic commerce issues. Such representation ensures that we have an opportunity to shape the form, and to be heard on the content, of the Model Laws or Conventions which may ultimately be adopted by individual States. For example, New Zealand was represented at the February 1999 and September 1999 sessions of the United Nations Commission on International Trade Law’s (UNCITRAL) Working Group on Electronic Commerce (which is currently dealing with issues involving electronic signatures) and at the June 1999 meeting of the Hague Conference on Private International Law.⁷ Officials from the Ministry of Foreign Affairs and Trade, Ministry of Commerce and other government agencies continue to represent New Zealand at forums such as APEC (Asia Pacific Economic Cooperation) and OECD (Organisation for Economic Cooperation and Development) both of which have electronic commerce on their agendas. Indeed, some impetus to discussions on electronic commerce within APEC and OECD was given by speeches made in late 1998 at OECD (Ottawa) and APEC (Kuala Lumpur) meetings by the President of this Commission, Hon Justice Baragwanath.⁸ Recently, the President addressed an APEC/World Trade Centre (WTC) meeting in Auckland.⁹

To assist it in the preparation of this report, the Law Commission established an Electronic Commerce Advisory Committee (the Advisory Committee). Members of the Committee are Elizabeth Longworth, Barrister and Solicitor of Longworth Associates, Auckland; David Goddard, Barrister, Wellington; Jim Higgins, Managing Director, The Networking Edge Limited, Wellington and Dr Henry Wolfe of the Information Science Department of the University of Otago. The Commission expresses its gratitude to members of the Advisory Committee for their assistance in the preparation of this report. It is fair to say, however, that our position on some issues does not reflect the views of all of the members of the Advisory Committee.

While the assistance of both our Advisory Committee and the Steering Committee in developing issues of policy is much appreciated, the responsibility for recommendations made rests with this Commission alone.

We are also grateful to a number of people for making submissions and providing information to us. A list of persons who made submissions on ECom 1 appears at page xxiv. A list of those to whom we express a particular acknowledgement of assistance is set out at page xv.

This report is available not only in hard copy, but also through our website: www.lawcom.govt.nz.

The Commissioner in charge of the preparation of this report is Paul Heath QC. The research for the report has been undertaken by Megan Leaf, Jason Clapham and Lucy McGrath to whom the Commission expresses its appreciation.

Submissions on remaining questions should be addressed to Megan Leaf at the Law Commission. Submissions can be sent by email to MLeaf@lawcom.govt.nz. We ask that submissions be made to us on or before 30 June 2000. A third report will be issued in late 2000 addressing remaining issues.