Funding a dispute resolution scheme
Funding models for dispute resolution schemes range from full cost recovery to user pays, and from full funding by the state or industry to a shared arrangement.
On this page
The Aotearoa best practice dispute resolution framework (the Framework) has more detail on the choice of funding model for a scheme (see Standard 2: Accessible to all potential users; Standard 4: Independent; and Standard 8: Properly resourced to carry out the service).
Aotearoa best practice dispute resolution framework (the Framework)
Funding model
How to fund a dispute resolution scheme is is an important question.
There are a variety of funding models ranging from full cost recovery to user-pays, to full funding by the State or relevant industry, including options for shared funding arrangements.
You should consider whether the preferred, or any amended funding model is specified in legislation.
For example…
The amended Telecommunications Act 2001 specifies that the Ultra-Fast Broadband dispute resolution scheme shall charge a levy to providers (see section 155ZN).
Choosing a funding model
Which model is appropriate will depend on the context.
The decision is usually influenced by the degree to which the dispute resolution scheme is perceived as contributing to outcomes that are in the public interest, such as minimising industrial unrest, or whether it is mainly meeting the needs of private individuals.
Schemes set up to address disputes arising in particular industries will generally be funded by industry members, often through fees or a levy system.
Costs can be a barrier
The Framework includes consideration of cost as a barrier to entry to a scheme in Standard 2: Accessible to all potential users. C areful thought needs to be given to the appropriate fee levels when developing or reviewing a scheme. Full cost recovery arrangements can significantly reduce parties’ ability to access dispute resolution. Nominal filing fees can, however, be an effective way of deterring frivolous claims.
Treasury and the Office of the Auditor-General have guidance on charging fees in the public sector that may be relevant.
Guidelines for Setting Charges in the Public Sector(external link) — The Treasury
Setting and administering fees and levies for cost recovery: Good practice guide(external link) — Office of the Auditor-General New Zealand