3 Feb 2022

Businesses should prepare for increased regulatory, enforcement action in 2022

10:44 am on 3 February 2022

Law firm MinterEllisonRuddWatts' annual litigation forecast says businesses should expect more court action for unintentional regulatory breaches as regulators have increased funding to carry out that type of work.

18072016 Photo: Rebekah Parsons-King. Wellington High Court.

Photo: RNZ / Rebekah Parsons-King

Partners and co-leaders of the firm's disputes resolution team Jane Standage and Richard Gordon said legal action was likely even where breaches were self-reported and corrected.

"There is increasing regulatory intervention, climate change pressures, class actions and swift legislative change for some sectors," Standage said.

"We can expect this trend to continue with a higher level of enforcement action by the Financial Markets Authority, Commerce Commission and the Reserve Bank."

Gordon said business leaders should also expect increased risk, particularly around compliance, cyber threats and climate-related financial disclosure.

"Boards and executives must consider a broader range of risks than in days gone by," he said.

"New legislation governing financial advice and privacy, along with proposed new laws around climate disclosure bring new penalties, including possible criminal liability for directors."

He said measures to control the spread of Covid-19 also posed additional risks.

"With more employees working remotely and accessing organisational systems through at-home connections, we are seeing the rate of cyber-attacks skyrocket.

"Organisations must consider a multi-faceted legal response to deal with not only the attacks, but to also more challenges obtaining cyber insurance."

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