Recent Reports by the Law Commission of New Zealand

The Law Commission of New Zealand recently published two reports on criminal law as well as its second in a series of issues papers on the law of trusts:

• Mental Impairment Decision-Making and the Insanity Defence: "The report Mental Impairment Decision-Making and the Insanity Defence (NZLC R120, December 2010) recommends a new decision-making framework for special patients, special care recipients, and restricted patients. Currently, their discharge, reclassification, and long leave for more than 7 days is dealt with by Ministers (the Minister of Health and, sometimes, the Attorney-General). Instead, we recommend a new Tribunal, the removal of the Minister of the Health from the process, and some slight modification to the Attorney-General’s functions. The report also reviews the insanity defence in section 23 of the Crimes Act 1961. The defence, despite being quite old-fashioned, is generally thought to be working as well as could be promised by any of the available reform options. All of the options are flawed, in one way or another. No change to the defence is proposed."
• Compensating Victims of Crime: "The Commission favours the alignment of the regimes for enforcement of reparation orders that exist for District Courts and the High Court, and that are contained in the Summary Proceedings Act 1957 and the Crimes Act 1961 respectively. The Government has recently decided to amend the law so that these regimes are consistent, which the Commission supports. The Commission also recommends that the Criminal Proceeds (Recovery) Act 2009 be amended so that prosecutors may obtain a restraining order preventing a defendant from dissipating his or her assets prior to an order for reparation being made in favour of any victims. In order to ensure such restraining orders are cost-effective, the Commission recommends they be available only where the victim has suffered loss or damage of at least $20,000 and the usual costs of restraining property of the type involved are less that the value of the property itself."
• Review of the Law of Trusts Second Issues Paper: "The second issues paper will cover issues with the use of trusts (especially family trusts) in New Zealand. This paper will look at the purposes for which family trusts are established, including reducing tax obligations, protection of assets from creditors and relationship property claims, and meeting eligibility thresholds for government assistance. The paper examines different legislative and judicial responses to the use of trusts to 'look through' or disregard a trust where a trust has been used to frustrate the underlying policies of particular statutes. The Commission poses options for how the law could address concerns about the use of trusts. The paper seeks comment from as broad an audience as possible on issues such as why trusts are so common in New Zealand, whether limits should be placed on the uses to which trusts are put, whether high levels of settlor control is an issue for concern, how effective existing legislative mechanisms are at addressing the impacts of trusts and whether the law on sham trusts is satisfactory."