Osmose case settled

June 10th, 2010 at 11:00 am by David Farrar

The Herald reports:

Nelson MP says he is “delighted” a $15 million lawsuit against him has been settled out of court.

“It’s been a very draining five years. The settlement involved some payment but was less than the legal costs would have been for the scheduled six week hearing,” Dr Smith said outside court. …

Counsel for the parties appeared in the High Court today to announce an agreement had been reached, but the terms were confidential.

Dr Smith said that no public money was involved in the settlement.

Having a $15 million lawsuit hang over you would be no easy thing. Most defamation suits will punish but not destroy you. This suit would have, if successful, bankrupted Nick. No money, no house to live in, no job.

So it must be a great relief to have it settled. I don’t know the terms of the settlement of course but even the fact there has been one is significant because my understanding is Smith and Wakeling had been prepared to settle years ago, but the Plaintiff insisted on a day in court. However a recent case in appellate courts made the burden of proof harder for the plaintiff, so this may have helped encourage a settlement.

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22 Responses to “Osmose case settled”

  1. Le Grande Fromage (145 comments) says:

    Hopefully Nick Smith has lernt that there is a price to pay for being a belligerent dick head. Unfortunately his actions and statements around the ETS show that he hasn’t.

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  2. Paulus (2,711 comments) says:

    Remember the Plaintiff is a large US Corporation who like most US companies will sue anybody over anything, often right or wrong – what the hell – lawyers paradise.

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  3. big bruv (14,218 comments) says:

    So you cannot be an MP if you are bankrupt?

    What a pity the Plaintiff agreed to a settlement.

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  4. RKBee (1,344 comments) says:

    Dr Smith said that no public money was involved in the settlement.

    Where does he think his money comes from… the private sector.

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  5. David in Chch (523 comments) says:

    Good point, Paulus. I recall that when the North American Free Trade Agreement (NAFTA) started, an American company accused a Canadian limousine manufacturer (they made specialty stretch versions of ordinary cars) of “dumping”, all because the Canadian dollar made it cheaper and even though NO American company was making anything like it. But you see, once a foreign company or person is accused, then the American government steps, via their equivalent of the Commerce Commission, takes over the prosecution of the case! So it often doesn’t cost the American company anything to go to court!

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  6. Le Grande Fromage (145 comments) says:

    In this case the “big nasty US firm” were right to take action. As a result of Nick Smith shooting his mouth off with complete untruths there was a total loss of confidence in one of their product lines. The brands image was so severely undermined it had to be withdrawn.

    Suing for losses was totally fair enough.

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  7. voice of reason (490 comments) says:

    Sure no public funds used in the settlement – but 200k on his legal bills

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  8. peterwn (3,335 comments) says:

    Some time back I dug up preliminary judgments concerning this matter on the Courts web site. The issue in Nick’s case (but not the other defendants) was whether his repeating the alleged defamation was actuated by malice, if it was not he was exonerated. One of the judges involved strongly indicated that Osmose should drop its case against Nick. On this basis I gave Nick a 90% chance of being exonerated but his share of the costs would have ruinous.

    I characterise Nick’s settlement as an outcome of ‘legalised blackmail’ against a MP which is an affront to democracy.

    Hopefully this case will be a catylist for long overdue defamation law reform, something which the NZ and UK Parliaments have never properly grappled with. This is because some MP’s like the ‘protection’ of defamation law and because of effectively lobbying by the legal profession. Nick’s case here, the Gunns cases in Australia and the Chiropractors case in England all show that defamation law is in desperate need of reform. Rod Petricevic used threat of defamation action to cower the media into submission when they were about to blow the whistle on him and Bridgecorp.

    For all the things people say about Nick there are some points to keep in mind:
    1. He continues to retain a whopping majority in his electorate which on paper should be a Labour seat.
    2. He might be a bit of a maverick (because of his hot temper and because he is prepared to stick his neck out) but was not the embarassing maverick that Winston Peters was when in National’s cabinet. If John Key and Cabinet told him to pull his horns in on ETS, he would (although he is copping all the flak for ETS he is most likely implementing fundamental caucus and Cabinet decisions, and being the ‘Aunt Sally’ is probably in the best interests of his party).
    3. He successfully put through a private members bill to reform legislation relating to registration of professional engineers in close consultation with the profession and with the general blessing of the Labour Government. This was an amazing achievement for an opposition MP as most private member bills are used to push particular ‘issues’.
    4. For Caucus and Cabinet operate the most effectively they need people from across the spectrum, and someone like Nick Smith is a very good fit.

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  9. Viking2 (11,678 comments) says:

    Just needs to refresh the brainwith common sense.
    Been there toooooo long.
    Time he went somewhere else for work.
    Family reasons would be good excuse.

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  10. trout (955 comments) says:

    The ETS will be Nick’s ‘Waterloo’. Note the lack of back-up from other Nat. MP’s; he is being left high and dry on this one.

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  11. Manolo (14,169 comments) says:

    “The ETS will be Nick’s ‘Waterloo’.
    Not only Smith’s but Key’s and the coward National Party. They have broken another election promise in creating this new ETS tax.

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  12. Paulus (2,711 comments) says:

    Trout & Manolo – what bullshit.

    Most people in NZ neither know nor really care about ETS as such. Sure there will be a small living cost to the public but they will swallow it like any other cost increase eg motor fuel (which has moved both ways for some years now) – and normal inflation.

    Whilst I do not necessarily agree with Climate Change overall as too many charlatans are involved I accept that it is in NZ best long term export interest.

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  13. Manolo (14,169 comments) says:

    “..I accept that it (the ETS) is in NZ best long term export interest.”

    Do you care to explain why? Is it best for NZ to reduce its competitiveness? Is it best to tax its citizens more for no gain whatsoever? Enlighten me, please.

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  14. insider (845 comments) says:

    I’ll bet he’s pleased what with us paying a large chunk of his bills when he wasn’t even a Minister at the time. Is the absolute privilege of parliament not enough for these guys without us having to subsidise their ill disciplined outbursts?

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  15. GJ (329 comments) says:

    Paulus (203) Along with Manolo I await your enlightenment! I know a lot of NZ’s that certainly do care about the ETS and its outcome!

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  16. BlairM (2,340 comments) says:

    I’m sorry to hear about the settlement. Bankruptcy-inducing lawsuits could not happen to a nicer guy. If only somebody would do the same to Steven Joyce….

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  17. peterwn (3,335 comments) says:

    insider – it was quite a normal political outburst which 99.99% of the time would not attract any special defamation attention. Nick repeated the alleged defamatory information when commenting on a matter of political and public interest and within his opposition portfolio area. There was no malice against the plaintiff – Nick’s concern was that inadequately treated timber would be used for construction leading to more leaky homes problem (they could have still leaked but the framing would not have been rotted out by fungus).

    Nick had the misfortune to run foul of a extremely litigious American company.

    As I said previously if the case had gone to trial he would have had a 90% chance of being exonerated (because malice on his part had to be shown), but he would still have had to bear much of the costs of defending himself.

    It was almost on a par with Simon Singh being sued by chiropractors in the UK because concern that chiropractors were promoting bogus treatments for childrens’ ailments which had nothing to do with the spine. He initially copped it hard in court but was effectively exonerated on appeal but it still left a big dent in his pocket.

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  18. insider (845 comments) says:

    peter

    Sorry but just because he was acting as an opposition spokesman does not mean we should pay. He has a massive protection in being able to say what he wants in Parliament but that does not give him extra rights outside. He does not need further protection. I would have a different view if he had been the minister as they are more likely to be targeted vexatiously.

    I do wonder if the fact he was being bankrolled meant his legal bill was higher than it need be. If it was 90% certain, why did he pay costs to Osmose? You would have thought it would have been so one sided an agreement to settle based on own costs might follow, or even Osmose paying something, given OSmose may have faced costs if they lost.

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  19. Rex Widerstrom (5,013 comments) says:

    peterwn:

    Excellent comment re the (mis)use of defamation. Can you enlighten me (or DPF, if you come back to read comments on this) what DPF is referring to when he says:

    a recent case in appellate courts made the burden of proof harder for the plaintiff

    I completely missed that one. What case would that be?

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  20. peterwn (3,335 comments) says:

    Rex – It may be:
    http://jdo.justice.govt.nz/jdo/GetJudgment/?judgmentID=144556

    Unfortunately I do not have time to research further.

    See also:
    http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2010/350.html
    Chiropractors v Singh in UK.

    Insider – It is quite possible that Nick may have saved the community an enormous sum by blowing the whistle on possibly inadequate timber treatment methods. In this case society would have got excellent value for Parliamentary Service’s contribution to Nick’s expenses. IMO Osmose has ended up with a bloody nose – they have extracted a public apology from Nick, the other allegedly evil defendants do not get a mention. It was the other defendants Osmose were particlar after.

    It would have been far better for Osmose to have defended the suitability of its product in public rather than gag anyone who dares criticise it. In this regard the case has a very strong parallel to the UK Chiropractors case – they shot themselves in the foot and chiropractic is coming under adverse public scrutiny there. Osmose have pretty well shot themselves in the foot credibility wise in this case. At the bottom of the heap you have the financial hucksters who rip off mum and dad investors who start threatening defamation suit when any journo dares get on their tail rather than defending their financial ‘products’. Make your own comparison.

    To put things bluntly, Nick deserves a gong for having the balls to stand up for what he believes in. In the next election he will be responsible for catching a perhaps small but significant lot of votes that would otherwise go to Labour and Greens. It is about time people including Whaleoil start to realise this.

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  21. Rex Widerstrom (5,013 comments) says:

    Thanks, peterwn.

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  22. Tauhei Notts (1,687 comments) says:

    Osmose provide the materials for the Light Organic Solvent Preservative of wood.
    I thought that an organic solvent was like radical conservatism or even, virile impotence.

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