In a mere few months, the COVID-19 pandemic has had a sizeable impact on the New Zealand economy. Everyone from employees, to businesses and the government is still coming to terms with the impact that the coronavirus is having on daily life. Law firms have a critical role to play during this challenging time, as they guide their clients through rapid changes in the law as well as helping them to manage their relationships with suppliers, customers, shareholders and employees.
Dentons Kensington Swan is one of New Zealand’s leading commercial law firms and its services include technology and innovation. Hayley Miller, Partner, and Campbell Featherstone, Senior Associate, published an article recently on tips for contracting electronically. Curious to gather their perspectives on the current climate, Abigail Milburn, who heads up the Practical Law New Zealand Resource Centre, reached out to Hayley and Campbell for some further insights into how law firms like Dentons Kensington Swan can support their clients during the COVID-19 outbreak. Here’s a breakdown of their conversation.
Navigating the new normal
How have your clients been handling the new normal? Has your client management and guidance approach changed since the start of the COVID-19 outbreak and, if so, how?
Campbell: Most of our clients are well set-up to work from home and are used to dealing with their professional advisers remotely. They’ve certainly embraced the more informal environment that naturally comes with the territory and everyone is very understanding of the constraints that people find themselves up against, faced with unfamiliar working conditions (and the odd interruption from small children on video conferences!).
Hayley: Our client management and guidance approach hasn’t changed much, if at all – we pride ourselves on giving commercial and pragmatic advice, and nothing has changed in that regard. We believe that it’s particularly important to provide our advice in context, especially in circumstances where there is little precedent to go on. That’s always been our approach, especially in the tech sector: our clients want quick, practical advice, and they seek out advisers who can give them a recommendation, rather than someone who will just explain the law to them without offering a view. That approach is even more important now, given the constantly-changing situation and the need for swift advice that can be acted on promptly.
Social distancing and signing documents
With most people now required to work from home, what are some practical tips that Dentons Kensington Swan can give to parties entering into contractual arrangements in the current work-from-home environment? How can logistical issues around signing and witnessing documents like deeds be dealt with for example?
Campbell: In almost all cases, you can take a pragmatic approach, since (thankfully) New Zealand law is not overly prescriptive when it comes to how documents must be executed, and we already have a framework for entering into transactions electronically.
With respect to deeds, our view is that “remote” witnessing is feasible under existing New Zealand law. Provided that the “witness” is able to view a signature being applied, and is therefore “present” (albeit virtually), we consider that a deed will have been effectively entered into under New Zealand law. This “presence” might be established by audio-visual link (like a Zoom call), where the witness is able to see the document being signed – in that case, the person signing should send a copy of the signed document to the witness immediately afterwards, so that the witness can separately apply his or her witness signature next to the signatory’s signature.
If the signature being witnessed is an e-signature, the witness could view the signature by a combination of audio-visual link and screen sharing technology (and also apply an e-signature immediately after the main signatory has done so).
However you go about it, it makes sense to keep a file note of when and how the signature was witnessed in case the validity of the deed ever gets called into question.
If the deed is subject to the laws of another jurisdiction, you’ll need to consider whether the above approach still works as other jurisdictions can have much more prescriptive requirements.
Still stuck? Consider carefully whether the document you’re entering into actually needs to be a deed. Very few documents are actually required by law to be entered into by deed so it may be that a simple agreement will suffice.
In the case of further economic downturn…
There has been much discussion in recent weeks of whether countries, and indeed the world as a whole, will fall into recession because of the COVID-19 outbreak. The questions now being asked are more around the length and severity of any recession, rather than whether or not it will occur. Let’s say a recession does hit New Zealand, impacting your clients and their businesses. Do you think that the way in which Dentons Kensington Swan provides legal services will change? What role do you think law firms play in helping their clients to prepare for and to weather a recession?
Hayley: Unfortunately, it seems like a recession is inevitable – not just in New Zealand but globally among all major economies. Dentons Kensington Swan is a firm that has been around (in various forms) since the mid-19th century, so it has seen its fair share of recessions, including the last GFC. Will a recession make a change in how we provide legal services? I don’t believe so. We will continue to give pragmatic, commercial and contextual advice. I think the change in how we provide legal services will be driven more by the experience we’ve had of lock down and how easy it is to work remotely. Already, clients are less reliant on face to face interaction and are happy to embrace the latest technologies for communicating and collaborating. I can see the adoption of these technologies really taking off in the next few years.
Campbell: One of the key benefits of working for a large law firm – especially one with a global reach – is working with lawyers who have access to information and tools from around the world. Large firms are more readily able to “tap into” what others are doing, whether in New Zealand or further afield, so as to give their clients a better insight into the sorts of issues that they are likely to face and the best practice to employ in order to face them. Good law firms also help clients move quickly: by informing and empowering the decision makers to make the prompt decisions that are required in a volatile market.
Court cases and legislative predictions
What do you predict will happen when the courts and the New Zealand Parliament re-open once the COVID-19 outbreak is over? What kinds of court cases and legislative changes do you expect to see later in 2020?
Campbell: It’s hard to predict with any certainty what sort of cases will come out later this year (and in the years to come) as a result of COVID-19 but to hazard a guess, I’d say that we’ll see case law on frustration of contractual obligations; interpretation of force majeure provisions; interpretation of insurance contracts where cover is (or isn’t) triggered by a pandemic; cases on rent abatement (in particular the interpretation of the standard “No Access in Emergency” clause of the Auckland District Law Society standard form lease); and no doubt case law dealing with the treatment of employees during or in the aftermath of the lock down.
Hayley: New Zealand is lucky in that we have a Parliament that can move quickly to legislate in times of need. Already we’ve seen the government propose amendments to the Contract and Commercial Law Act 2017 to expressly allow for electronic signatures in respect of security agreements that contain a power of attorney provision as well as amendments to insolvency law to provide a safe harbour for company directors to facilitate them trading out of these difficult times. What this might do is slow down some of the other legislative reforms that we were otherwise gearing up for: for example, enactment of the Privacy Bill may be further deferred and consultation on changes to the unfair contract provisions of the Fair Trading Act 1986 has already been deferred.
Hopefully some of the “temporary” changes in practice that we’ve seen during lock down can be formalised – for example, remote dispute resolution and remote witnessing of documents (especially wills) – in a way that continues to ensure that New Zealand can lead the way as a digital economy that makes the most of the online tools available to us all.
Practical Law New Zealand is here to help guide you through the COVID-19 outbreak with new and updated resources that address COVID-19, pandemics and business interruptions. In addition to the New Zealand resources listed here, you can also access Practical Law’s Global Coronavirus Toolkit. All resources within the Key Global: COVID-19 section are free to access. This is an evolving and dynamic issue, and we will continue to add new and update existing resources as the situation develops.