Litigation & Regulatory Quarterly Brief – New Zealand

We are pleased to publish the March 2026 edition of DLA Piper’s Litigation & Regulatory Quarterly Brief for organisations doing business in New Zealand. This edition provides a round-up of key legal and regulatory developments from the past quarter, with a focus on issues we are discussing with General Counsel, board directors and senior business leaders.

If you would like to learn more about any of the topics covered in this publication, please get in touch with the contacts below.

Directors’ duties decision: ASIC v Bekier

On 5 March 2026, the Federal Court of Australia in Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196 handed down a landmark decision in relation to corporate governance and directors’ duties. The decision contains important guidance on the scope of directors' duties that is highly relevant for companies in New Zealand.

The case was brought by the Australian Securities and Investments Commission (ASIC) against the Chief Executive Officer (CEO), the former General Counsel and Company Secretary, the Chief Financial Officer (CFO), the Chief Casino Officer (CCO), and all seven non-executive directors of The Star Entertainment Group Limited (Star). Star is an ASX-listed gambling and entertainment company which owns a number of casinos, including The Star Sydney.

ASIC alleged that the defendants breached their duty to exercise their powers with the degree of care and diligence expected of reasonable directors and officers in the context of alleged money laundering risks at Star’s casinos. ASIC succeeded in its claims against the CEO and the former General Counsel and Company Secretary, and settled with the CFO and CCO before judgment. However, ASIC did not succeed against the seven non-executive directors, despite the Court being critical of aspects of their conduct.

In essence, the Court held that ASIC had not established its case against the non-executive directors on the evidence presented. This was because the non-executive directors were found to have reasonably relied on management to bring all relevant information and risks to the board’s attention. The non-executive directors did not receive sufficient information to enable them to properly test management.

As with the Companies Act 1993 (New Zealand), the equivalent Australian company legislation does not differentiate between the duties of care owed by executive and non-executive directors. While the factual circumstances are unique, the decision contains a number of important takeaways for directors in New Zealand.

 

Lessons for directors

The key takeaways are:

1. The standard of care expected of executive directors is generally higher than for non-executive directors. Non-executive directors are not expected to match the operational knowledge of management. They are entitled to rely on management to surface issues and risks, unless there is reason to doubt management’s honesty, trustworthiness, or competence.
   
   
2. Non-executive directors must apply an independent and inquiring mind to the information they receive. Where appropriate, non-executive directors must test management and ask difficult questions. They are not entitled to passively receive information without understanding or testing it. Courts will closely scrutinise the contemporaneous record of questions asked and the engagement shown by directors when assessing whether there has been a breach of duty. Justice Lee noted that the role of a director ‘requires intelligent people prepared to engage actively’ and that non-executive directorships should not be seen merely as ‘glittering prizes decorating a CV’.
   
   
3. It is incumbent on the board to exercise control over the information and material it is provided. The Court was not persuaded by arguments from non-executive directors that they could not adequately discharge their duty because of the volume of Star board packs. The board must direct management to prepare a confined set of materials that is capable of review.
   
   
4. Boards may find ways to legitimately use AI, particularly when preparing and analysing lengthy board pack materials. However, AI should not replace human judgement or dilute personal responsibility. Any use of AI should be transparent and subject to formal company policies, rather than being used by directors ‘in the shadows’.

Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196

This quarter we saw a continuation of the intense regulatory scrutiny and enforcement in the financial services sector as noted in our December 2025 Brief.

 

FMA cancels Saanvi’s financial advice provider licence

On 30 March 2026, the Financial Markets Authority (FMA) announced it had cancelled Saanvi 2022 Ltd’s financial advice provider licence after an investigation into mortgage advice misconduct and governance failures. The FMA began an investigation into the Auckland-based firm Saanvi following concerns raised by its aggregator, Kiwi Advisor Network.

 

NZD2.1 million payment by FMG for breaches of the Financial Markets Conduct Act 2013 (misleading statements)

In February, The Farmers Mutual Group and FMG Insurance (FMG) agreed to pay NZD2.1 million (in lieu of a pecuniary penalty) following breaches of the Financial Markets Conduct Act 2013 (FMCA) in relation to misleading representations about their insurance products. Following an investigation, the FMA found that thousands of FMG customers with household contents policies were wrongly charged from 2014 to 2024.

 

NZD2.1 million penalty against ASB Bank for breaches of the FMCA (fair dealing provisions)

In early March, the High Court imposed a penalty of NZD2.1 million on ASB for breaches of the FMCA fair dealing provisions. ASB admitted to making misleading representations in relation to how insurance discounts were applied. ASB received a 30% reduction in penalty for self-reporting, cooperation, and full remediation.

The Court noted that internal awareness of a breach without escalation or resolution materially increases penalty risk, even where senior management is not deliberately turning a blind eye. Corporations are expected to invest in robust systems and controls, particularly for pricing and entitlements customers reasonably expect to be automatic.

We also summarise the key legislative updates in the financial services sector below.

 

Select Committee report on Financial Markets Conduct Amendment Bill released

As reported here, the Bill sets out new powers for the FMA to conduct warrantless searches and approve certain significant transactions. It also consolidates market services licences and narrows the scope of the climate-related disclosures regime. In January 2026, the Finance and Expenditure Committee published its report on the Amendment Bill. The Committee unanimously supports the Bill being passed subject to certain amendments, including expanding the reach of warrantless searches to cover wholesale offerors. DLA Piper filed a submission arguing against the FMA's proposed new powers because we consider there is no evidence that the additional powers are necessary.

You can read more about this and our submission here: DLA Piper submits against proposed FMA powers in FMC Amendment Bill.

 

Commerce Act changes – public submissions closed

In our December 2025 Brief, we outlined the substantial reforms to the Commerce Act proposed by the Commerce (Promoting Competition and Other Matters) Amendment Bill. The time for public submissions has now closed. DLA Piper publicly submitted on the Bill and presented its submission before the Select Committee. The Economic Development, Science and Innovation Select Committee is now considering submissions and will report back with its recommendations in due course.

 

US Supreme Court invalidates Trump's tariffs

On 20 February 2026, the US Supreme Court ruled that President Trump was not authorised to impose his “reciprocal tariffs” on goods from jurisdictions worldwide (including goods from New Zealand exporters), or his “drug trafficking” tariffs imposed on goods from Mexico, Canada, and China.

Our DLA Piper (US) colleagues share a summary of the decision and their insight on what refunds may be available, the tariff treatment of future imports, and the potential for replacement tariffs in their key takeaways report.

In our previous edition of the Quarterly Brief, we discussed the progress of the Employment Relations Amendment Bill. The Employment Relations Amendment Act 2026 (Act) received Royal Assent on 20 February 2026 and came into force on 21 February 2026, marking a significant shift in New Zealand’s employment law.

The Act introduces wide-ranging reforms aimed at enhancing labour market flexibility, reducing compliance costs, and rebalancing the personal grievance system to better align employer and employee interests.

The reforms amend the Employment Relations Act 2000 to:

• Clarify the contractor versus employee distinction through a new five‑part 'specified contractor' gateway test.
• Strengthen accountability for employee behaviour in the personal grievance process, including new limits and exclusions to remedies for serious misconduct and contributing behaviour.
• Introduce a specified high‑income remuneration threshold (initially set at NZD200,000) restricting access to unjustified dismissal and some unjustified disadvantage personal grievances that relate to a dismissal.
• Make some other miscellaneous updates such as revoking the 30‑day rule and related union‑information requirements, clarifying 90-day trial period provisions, and updating the statutory test of justification.

You can read our Employment Team’s article on the reforms to the Act here: Significant changes introduced by the Employment Relations Act 2026

 

Leaving the Holidays Act behind: New Zealand prepares for a new leave regime

The introduction of New Zealand’s Employment Leave Bill is likely to be welcomed by many employers who have grappled with the complexity and uncertainty of the Holidays Act 2003. The Bill marks a substantial shift in the way leave entitlements are earned, recorded and paid.

The proposed regime would move leave accrual and payment to an hours-based approach, including new concepts of standard, additional and casual hours, revised public holiday rules, and a statutory remediation pathway for past underpayments.

You can read our Employment Team’s latest article on the new regime here: Leaving the Holidays Act behind: New Zealand prepares for a new leave regime

 

APAC Employment Forecast 2026

DLA Piper’s APAC Employment Team has prepared its annual employment law forecast, summarising the major legislative developments and key trends across the region in 2025. The forecast also highlights the important issues and emerging trends that employers in APAC should consider as they plan for 2026. This publication covers 16 jurisdictions across the Asia Pacific region, including Australia, Cambodia, China, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Myanmar, New Zealand, Singapore, South Korea, Taiwan, Thailand and Vietnam.

You can read the comprehensive forecast here: APAC Employment Forecast 2026

 

Global employment trends: 2025 in review and 2026 in preview

Global employers are preparing for a new era of workforce planning, compliance, and innovation. Economic and geopolitical uncertainty, rapid technological disruption, and fragmented regulation are rewriting the rules of employment worldwide.

New Zealand has been caught up in global trends towards improving pay transparency, expanding parental leave entitlements, and modernising the framework for leave entitlements. Some of DLA Piper’s international employment partners discuss the top trends impacting employers worldwide and what may come in 2026 in our latest Global Employment Trends report.

 

New High Court Rules in action

The new High Court Rules have been in force since 1 January 2026. In our Brief from December 2025, we provided an update on the key changes to the High Court Rules for businesses to be aware of. We have observed a few differences in practice already. The key takeaways are:

• There is more work required for defendants when proceedings are commenced, particularly on summary judgment applications. Within 10 working days, a defendant must decide whether they will apply for specific interlocutory applications, including to add or remove parties or for summary judgment. This is a fast turnaround for highly technical and finely balanced applications that benefit from a considered opinion.
• The High Court has now published a flow chart (under rule 6A.1 of the High Court Rules) which sets out an overview of commencement, case management, and preparation for trial of ordinary proceedings.
• The High Court Rules were further amended in February 2026 to increase the daily recovery rates for scale costs awards by 37.8% to reflect the increase in the real costs for legal services since 2019, when the rates were last updated. The new rates come into force on 1 May 2026.

We will keep you updated with further observations as we continue to engage with the new Rules. If you have any questions about how these Rules might impact your business or potential claims, please do not hesitate to get in touch with our team.

 

Disputes Tribunal threshold rises from NZD30,000 to NZD60,000

The Disputes Tribunal has doubled its claim value threshold, from NZD30,000 to NZD60,000. The previous limit often meant that low to medium-value claims were abandoned due to the cost of bringing them in court, or claimants would lower their claim to fit within the Tribunal's NZD30,000 limit. The increase is likely to affect how businesses should prepare for, manage and respond to low- to medium-value disputes. Read our further analysis here: Raising the limit: Disputes Tribunal hears claims up to NZD60,000

 

New automatic restraint on persistent vexatious litigants

The Judicature (Timeliness) Legislation Amendment Act 2025 came into effect on 1 February 2026. The key change for corporates is a new automatic restraint preventing vexatious litigants from pursuing civil proceedings without leave for three years. The restraint applies if two proceedings by that litigant are struck out as "plainly abusive" within two years by the High Court, acting on its own initiative. This change leaves corporates less exposed to persistent vexatious litigants.

 

Update on generative AI: disputes considerations and tips for businesses

2025 saw increasing scrutiny on AI's role in legal disputes – particularly the use of AI in litigation and whether public-facing GenAI systems should be considered "digital strangers" for privilege purposes. The courts are also seeing concrete examples of AI outputs containing hallucinated authorities or otherwise unreliable content being put before decision-makers. This has been spurred by the use of ChatGPT and other GenAI systems, which are evolving into an evidentiary and procedural risk for the courts. For more information and guidance on best practice for the use of generative AI in the legal context, read our latest article here: Update on generative AI: disputes considerations and tips for businesses

The first quarter saw two key developments in the cyber security space:

Manage My Health data breach is a timely privacy reminder

On 1 January 2026, Manage My Health notified the Privacy Commissioner of a serious cyber incident involving the sensitive health information of thousands of users. The Privacy Commissioner is now undertaking an inquiry under section 17(1)(i) of the Privacy Act 2020, which enables the Privacy Commissioner to inquire into any matters that appear to be infringing the privacy of individuals. This is a timely reminder for businesses to ensure their data privacy policies are up to date and that staff training is current. Please reach out if you would like us to review your privacy policy or support any training.

Submit on New Zealand’s Cyber Security Strategy 2026-30

On 27 February 2026, the Department of the Prime Minister and Cabinet (DPMC) published New Zealand’s Cyber Security Strategy 2026-30 (Strategy). Alongside the Strategy, the DPMC published a discussion document and opened consultation on measures to enhance the cybersecurity of New Zealand’s critical infrastructure system (electricity, transport, telecommunications, health, payments, etc). This discussion document seeks feedback on the infrastructure services that businesses think are critical to our economy and communities. Submissions close on 19 April 2026.

 

Upcoming bipartisan modern slavery reporting Bill

In February 2026, the Government, sponsored by National MP Greg Fleming and Labour MP Camilla Belich, introduced a new bipartisan Modern Slavery Bill proposing New Zealand’s first Modern Slavery Act. Under the Bill, all entities carrying out business in New Zealand with over NZD100 million in consolidated revenue are to produce and publish an annual modern slavery statement disclosing how they address and remediate incidents and risks of modern slavery in their operations and supply chains. A breach of reporting responsibilities may result in a fine of up to NZD200,000 and a pecuniary penalty of up to NZD600,000. Read our recent article here: Bipartisan deal accelerates new modern slavery regime for New Zealand

 

Supreme Court confirms that climate change is a mandatory consideration in oil and gas tenders

In December 2025, the Supreme Court issued a decision in Climate Clinic Aotearoa Inc v Minister of Energy and Resources [2025] NZSC 197, confirming climate change as a mandatory relevant consideration when granting petroleum exploration permits for tenders under section 24 of the Crown Minerals Act 1991 (CMA). The challenge, as previously dismissed by the High Court and Court of Appeal, concerned the lawfulness of two onshore Taranaki exploration permits. It was argued that the Minister’s granting of the permits undermined the purpose of the CMA "to promote prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand" by failing to consider implications on climate change.

 

Federal Court of Australia dismisses greenwashing case against energy provider

The Federal Court of Australia has dismissed a greenwashing suit brought against energy provider Santos by the Australasian Centre for Corporate Responsibility (ACCR), a shareholder advocacy group. The ACCR v Santos case should give directors comfort around communicating their companies' long-term climate-related targets to an investor audience.

ACCR challenged three sets of claims made by Santos in its annual reporting and investor briefings, including Santos’ claim that it had a “clear and credible” pathway to net zero Scope 1 and Scope 2 emissions by 2040.

The Court took a commercially pragmatic and realistic approach to corporate climate targets, refusing to interrogate individual aspects of a long-term strategy in isolation. Companies with long-term targets should outline the strategy, support it with reasonable grounds, and disclose uncertainties and limits. A reasonable process can include analysing future scenarios, relying on data, expert advice, and external validation. That analysis can include assumptions about future external contingencies and does not have to rest only on existing, objective, or verifiable facts.

An entity is not required to show that every proposed project it relies on to achieve the goal has been fully assessed or has regulatory certainty. Reasonable grounds can exist even where projects are at an early or conceptual stage. The law does not require final investment decisions, detailed engineering, secured customers or infrastructure, or fixed regulatory regimes.

Corporates with net zero targets need to have a reasonable plan to achieve them, supported by evidence, but do not have to have all the answers at the time they are set, and can adapt as circumstances change.