Brian Fallow: Bill not the way to improve our law

The Regulatory Standards Bill is a bit of a dog, no matter how it tries to present itself. Photo / Alan Gibson

If ever there was a dog in sheep's clothing it is the innocuously titled Regulatory Standards Bill now before Parliament.

The latest iteration of a longstanding project of the radical right, it is the Regulatory Responsibility Bill drafted by a taskforce headed by Graham Scott, after an earlier version promoted by Act leader Rodney Hide perished in select committee.

Apart from the name, it has been changed not one iota by the fusillade of criticism it has received from some of the country's best legal minds.

Improving the quality of legislation is the aim, yet it focuses less on the legislature than on imposing obligations on the executive on the one hand and the courts on the other.

It would redefine the relationship between Parliament and the courts in a way neither is likely to welcome.

The Treasury, in a regulatory impact statement, gives it the big thumb's down.

It concludes that its potential to induce the desired changes in behaviour is low and the risk of unintended outcomes is high.

Attempting to legislate for better law making is up against a key incentive ministers have, namely the need to be seen to respond quickly and decisively to the latest risk, accident or misdeed, it says.

It is what Yes Minister's Sir Humphrey Appleby called the politician's syllogism: Something must be done. This is something. Therefore this must be done.

In addition Government MPs who hope to be ministers - and with 28 full ministers in a Parliament of 120 the odds are pretty good - do not readily risk disfavour by providing strong independent scrutiny of legislation or insisting on good process.

A central provision of the bill is to require ministers putting up legislation to certify it complies with the principles of the bill.

It is modelled on the Bill of Rights Act (Bora), which requires the Attorney-General to alert Parliament to any provision of a bill that appears to be inconsistent with the rights and freedoms Bora enumerates.

But when a Government bill gets that red flag it almost always gets enacted anyway without the offending provision being changed.

One of the Regulatory Standards Bill's central principles against which legislation is to be measured, if taken literally, would tend to freeze the existing distribution of wealth.

It says legislation should not "take or impair ... property" unless it is necessary in the public interest, the owner receives full compensation and that compensation is provided, to the extent practicable, by or on behalf of those who benefit from the taking or impairment.

On the face of it this would debar Parliament from doing anything redistributive.

That would depend on what content the courts gave to the concepts of taking, impairment, full compensation and the public interest. Those are just some of the concepts in the bill which it makes no attempt to define and delimit - leaving that to the courts.

There is a caveat, very broadly drawn. The bill's principles do not apply when incompatibility with them "is justified to the extent that it is reasonable and can be demonstrably justified in a free and democratic society". Whatever that means.

No wonder George Tanner, QC, law commissioner and for many years the chief statutory draughtsman, considers the bill fails its own tests of good law making, including clarity.

It would be a lawyers' field day, an invitation to relitigate policy decisions, with all the delays and commercial uncertainties that implies.

The regulatory impact statement says "other agencies have suggested the result might be a business environment that unduly favours incumbents over new market entrants, if governments refrain from making any regulations that impair private property rights".

This risk alone should give MPs pause. In an economy as small as ours markets are often highly concentrated and the threat of competitive entry is the only real constraint on market power. Putting a legislative ratchet under the status quo is not in the wider interests of business, or consumers, however attractive it might be to incumbents.

Two Auckland University law lecturers, Richard Ekins and Chye-Ching Huang, in a paper published by the Maxim Institute, argue the bill is unconstitutional.

"[It] affirms relatively abstract principles, some of which are constitutionally unorthodox and substantively unsound, the precise content of which is likely to be settled by judicial decision," they say.

"The nature of the principles is such that applying them is a substantive moral or political question that is properly the province of elected legislators responsible to voters, as well as officials subject to the oversight of elected legislators."

Even if the bill "worked" by putting MPs under political pressure not to enact legislation aggrieved parties would be likely to challenge "that would mean that our elected representatives, rather than using their own judgment, would be making law by trying to predict what judges would say".

Nonsense, say the bill's proponents. Parliament would remain sovereign and the courts are only being asked to fulfil their role of interpreting and applying the law.

But they can't have it both ways.

It would be absurd and invidious for Parliament to require judges to second guess its decisions on the merits of a policy and then shrug and say "Who cares what you think. We make the laws," if the courts find against them .

None of this is to suggest that we do not have a problem with substandard legislation.

The Government has initiatives under way intended to lift the quality of regulation, including the setting up of the Productivity Commission.

The Treasury suggests recognising Parliament's responsibilities in this area by setting up a select committee with special responsibility for legislative quality or by requiring select committees to report to the House on a number or legislative quality criteria and strengthening the resources available to them in scrutinising legislation.

Ekins and Huang also make suggestions about how the law-making process could be improved, including reconsideration of the three-year electoral cycle and whether it encourages haste and the abuse of urgency.

The Government is only committed to supporting the Regulatory Standards Bill as far as select committee consideration. Labour is expected to oppose it. So it may well never see the light of statutory day.