Merits Review: Where does New Zealand fit internationally?


A wide range of approaches to review and appeal rights of regulatory decisions exists internationally, an Australian research paper on regulation has found. The paper's findings are worth considering after the lengthy and intensive High Court decision on merits review of input methodologies decided last year.

A major debate in recent years in New Zealand has been over the need for, and scope of, merits review of regulatory decisions. In the electricity sector there was a strong push for merits review of Commerce Commission decisions under the regulatory control provisions of the Commerce Act, resulting in the merits review provisions currently in part 4 of the Commerce Act 1986.

The paper, from the Australian Competition and Consumer Commission and its energy regulator, surveys the regulation of infrastructure in 17 countries, including New Zealand and the ten largest economies in the OECD. While the paper does not attempt to define best practice, it provides a very helpful summary of the different approaches to regulation across the 17 surveyed countries.

The paper shows that merits review of input methodologies, and the ways in which it is limited, are not unusual. Equally, it shows that broader merits review rights exist in some countries. However, even then, limitations often apply to ensure decisions are made relatively quickly and regulatory certainly is achieved.

The infrastructure areas covered by the paper are energy, telecommunications, postal services, water and wastewater, rail, airport and ports.

Merits review typically involves a review or appeal of not only the process of a decision (as in a judicial review), but also the substantive decision itself. It usually enables the review body to reconsider the entire decision, including whether it was the right or best decision to make.

The Australian paper found that appeal and/or review rights are common across the different countries surveyed, but there are a range of different appeal mechanisms, standards, scope, and other matters. Looking at some of these more closely, the paper found:

most countries have at least a base level of judicial review, examining whether the regulator had acted within its powers, acted appropriately, and not otherwise violated relevant laws in many countries, courts will defer on judgment issues to the mandate and expertise of the regulatory body. This has been evident, for example, in some New Zealand judicial review decisions but also occurs...

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