Reading time: 5 minutes

The tort of negligence offers compensation to people who are owed a duty of care by a second party, where that second party breaches that duty in some way, causing harm or other damage.

The Accident Compensation Corporation (ACC) regime covers most instances of negligence in New Zealand. However, it is still useful to have a working understanding of how the tort of negligence might affect your business. This article will:

  • explain what torts are; 
  • describe the tort of negligence and how it works; and 
  • consider what that may mean for your business.

What Are Torts?

Torts are different types of legal obligations. They reflect situations where the action of an individual harms another individual in some way, where that action is not a crime. The aim is to compensate those individuals for the harm they have suffered. By contrast, criminal law aims to protect society by punishing individuals who commit certain crimes.

Different kinds of torts reflect the different kinds of obligations and harm that can occur between people. Some major torts include nuisance, trespass and negligence. 

What Is the Tort of Negligence?

Negligence is the most well-known and common type of tort. Negligence can be quite complicated in practice, but at its heart, it is when someone breaches their duty to someone else. Specifically, the tort of negligence covers situations where:

  • a person owes a duty to a second person;
  • the first person breaches their duty; and
  • the second person suffers some kind of harm or loss as a result.  

There are lots of types of duties that the courts have developed over time. For example, a tradesperson may owe a duty of care to do their job to a particular standard. Alternatively, a building company may owe a duty of care to construct a building without a leaky roof. 

Damage is key to a negligence claim. To make a case of negligence, you must prove this beyond the balance of probabilities. This means that it is more likely than not that the breach of a duty resulted in the harm. If you prove this, the responsibility shifts to the other party to show that they took all reasonable precautions. 

There will usually be no liability for damages in negligence if it can be shown if the second person acted reasonably, for instance, by following standard practices or in reaction to some sudden and unexpected emergency.

What Does the Tort of Negligence Mean For My Business?

One important aspect of negligence in New Zealand, particularly relative to other countries around the world, is that the ACC covers all personal injuries. ACC is a no-fault scheme that covers everyone, even international visitors, who are injured by an accident in New Zealand. This is relevant because most negligent cases overseas are concerned with personal injury. However, part of the ACC regime means that you cannot usually take a case in negligence against someone for personal injury. 

Consequently, the main type of damages people seek in New Zealand are ‘exemplary’ or ‘punitive’ damages. The bar for these damages is relatively high, as the name suggests, and goes towards serious or reckless breaches of a duty.

For your business, the key is to ensure that you are acting reasonably at all times, particularly when you owe a duty of care. The details of this will change depending on the circumstances of your business and workplace. For instance, as a builder, you may owe a duty of care to those using your services and trusting you to do a good job.

Key Takeaways

The tort of negligence involves situations where someone owes a duty to another person, that person breaches their duty, and the second person suffers some kind of harm or loss as a result. Relative to other countries, New Zealand sees fewer negligence claims due to the ACC regime, which precludes people from recovering damages for personal injury. However, there are still successful negligence claims in New Zealand. For your business, the key is to ensure it is behaving reasonably and upholding its obligations at all times. If you want to know more about the tort of negligence or the risks around torts and liability more generally, contact LegalVision’s disputes lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is a tort?

Torts are different types of legal obligations created by judges to reflect situations where an individual is harmed in some way by the action of another individual, where that action is not a crime.

What is the tort of negligence?

The tort of negligence is relatively complicated. At a high level, it covers situations where someone owes a duty to another person; that person breaches their duty, and the second person suffers some kind of harm or loss as a result.  

What is ACC and what does it have to do with negligence?

In New Zealand, all personal injuries are covered by the Accident Compensation Corporation regime (ACC). This regime is a no-fault scheme that covers everyone who is injured by an accident in New Zealand. It also precludes those people who are harmed from pursuing a claim of personal injury against someone else in most cases.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards

  • 2019 Top 25 Startups - LinkedIn
  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards