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Regulation

By Rodney Hide in HideSight

"Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place." - Frédéric Bastiat

The Health and Safety in Employment Act 1992 declares that "[e]very employer shall take all practicable steps to ensure the safety of employees while at work". The clause illustrates much of what is wrong with contemporary law making in New Zealand.

Like much of our law, the clause takes no account of economics: safety is good but not infinitely good. We must have regard to what it costs. Some safety measures just aren't worthwhile. Safety is also not an all-or-nothing thing. It's a matter of degree. We can make a workplace a little safer or a little less safe.

In deciding the level of safety to provide, we must balance the benefits against the costs. We can't take "all practicable steps" to ensure safety: we can't afford to.

The Health and Safety in Employment Act ignores that economic reality. It simply obliges us to take all "practicable steps" regardless of their cost. No one can do that. Making that requirement the law doesn't change the fact that we can't possibly comply.

But that doesn't worry politicians. They often vote as though good things such as safety are free. That's how they show their voters that they care. It's far better to vote for safety than to point out that not all safety measures are worthwhile and that life requires tough trade-offs. It's appears uncaring too to point out that accidents do happen.

Far better to declare yourself opposed to workplace accidents and to vote for more safety. That political motivation explains much of our 'feel good' law that has the best intentions but which produces no good result.

'Feel good' laws generate vague waffle: what exactly does it mean to "take all practicable steps to ensure the safety of employees". I have no idea. One person's view of what's practicable will differ to another's and, of course, a person's view may be quite different after an accident than before. The legal obligation imposed is unclear.

Politicians display their degree of care by the steepness of the penalties: up to $500,000 in fines and two years jail. Think about that. Did you take all "practicable steps" last week to ensure the safety of those around you? If you didn't (and how could you tell if you had?), and if you are an employer, you are liable for a hefty fine and jail term.

It would be bad enough if we had just this one clause in just one Act to deal with but that one clause is just one out of thousands of legal obligations our politicians have imposed upon us through hundreds of laws whose application can devastate our lives and our businesses.

The legal obligations upon us are overwhelming. In 1908 the entire body of public acts made up five volumes totaling 4,221 pages. That seems a lot. But by 1978 our laws had grown ten-fold: 60 volumes totaling 48,000 pages. Since then Parliament has passed around 4,000 pages of statutes and regulations each and every year. We pass more new rules in a year than what we had in total one hundred years ago.

The costs are horrific: a business compliance manual lists 25 acts, comprises over 160 pages and includes a diskette of 25 forms to help business with their "daily business requirements". No one can say that they are fully compliant with the law -- it's just not possible to do so. Honest businesses just have to "fly blind" unable to ensue that they are compliant with the law.

Even our law experts complain. The New Zealand Law Commission identified six recurring problems: inadequate problem definition, an assumption that the legislation is needed, premature introduction, failure to comply with accepted constitutional principle, and failure to draft law that is understandable and accessible.

Politicians well-understand the problem but that doesn't stop them passing more and more shoddy legislation. Their response to public concern is invariably to pass another law to 'fix' the problem. They are then seen to be 'doing something'. It doesn't matter that the law doesn't help or that it makes the problem worse: their aim is to show they care.

But their care is not unlimited. For example, section nine of the Fair Trading Act 1986 states that, "No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive". Sadly for voters, our politicians defined "trade" to exclude themselves and their parties.

That's a shame. In 1996 New Zealand First campaigned to remove National from office. Following the election, they ignored their campaign promise and formed a coalition with National to keep them in power. A business could not get away with that degree of duplicity, but politicians do all the time. They don't want the rules that everyone else must contend with necessarily to apply to themselves.

What to do? Our laws are impenetrable, arbitrary in application, give enormous power to the bureaucracy, sap our energy and enterprise, and they keep piling up.

The need is for a greater discipline applied to the law-making process. At present there is next to none. One possibility is a Regulatory Responsibility Act to tie politicians to a disciplined regulatory process parallel to the Fiscal Responsibility Act.

The purpose would be to provide for greater transparency and accountability in the law-making process. That would be achieved through a formal process that must be followed including a basic set of questions asked and answered about the purposes and effects of proposed legislation.

All new legislation would be subject to the Act and there would also be a process established for reviewing all existing law. We have quite a rigorous process testing and examining government spending - there is nothing comparable for legislation. It's desperately needed.

Dr Bryce Wilkinson has provided a seven-point test that could be usefully publicly applied to all legislation. It would be interesting to see just how much of Parliament's work would survive his quite reasonable test:

Test 1

Does it increase individual freedom of action, contract and exchange?

If yes, go to Test 2;

If no, go to Test 4.

Test 2

Does it preserve venerable common law causes of action against harm or remove novel or expanded definitions of legal harms?

If yes, go to Test 3;

If no, go to Test 4.

Test 3

Does it preserve existing legal rights and other elements of the rule of law?

If yes, this law or regulation preserves the common law, enhances freedom, and maintains the rule of law;

If no, go to Test 4.

Test 4

Is each and every element that violates Tests 1, 2 or 3 necessary in order to obtain a benefit that is essential to the well-being of the public at large?