Pike compensation

July 6th, 2013 at 11:00 am by David Farrar

Stuff reports:

The Government has paid no compensation to the families of the victims of the mine disaster, their lawyer, Nick Davidson QC, says.

This was in spite of apologies from the Government and the Ministry of Business, Innovation and Employment over their contribution to the tragedy, he said.

“Nothing has been paid by the Government [to Pike victims]. Not at all.”

In comparison, Davidson said the Government paid out-of-court settlements over another West Coast disaster, Cave Creek, near Punakaiki.

In that case, the Department of Conservation was found to have acted illegally and negligently after the viewing platform collapsed on April 28, 1995, killing 13 Tai Poutini Polytech outdoor recreation students and a DOC manager, and injuring four other students.

The two cases are not comparable.

DOC was the owner of and responsible for the Cave Creek platform.

The Pike River company was the owner of the Pike River mine and responsible for the mine safety. The court has found they were at fault.

I have huge sympathy for the families of the Pike River victims. However I do not believe it would be a good precedent to have taxpayers responsible for the failings of private companies.

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20 Responses to “Pike compensation”

  1. Michael (896 comments) says:

    The Pike River victims families have been getting ACC support from the Government (and rightly so).

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  2. peterwn (3,157 comments) says:

    This happens all the time for usual criminal cases – the crim is in most cases unable to meet the cost of any meaningful reparation.

    I presume in this case the judge may consider that it is possible to breach the ‘corporate veil’ and fold the Pike River shareholder (NZOG) financially liable. This could turn the commercial landscape inside out if a minority shareholder of a company faces liability because of the ‘wrongs’ of the copany.

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  3. Paulus (2,500 comments) says:

    What happened to the huge sum donated from throughout the Country and Australia I believe.
    I donated to a fund for the victims – what happened to it ?
    Perhaps I can be guided, but something like $20m was donated, or am I right out of court ?

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  4. Nostalgia-NZ (4,907 comments) says:

    ‘Chain of responsibility’ is alive and well in NZ, what is the liability of a under staffed and poorly resourced Labour Department?

    Examples of The Pike River are a rare event on the NZ landscape fortunately, I can see where DPF wants to leave the argument in the private hands of the failed company but the question needs to be asked would this event have unfolded in this way if the legislative watchdog had been capable of stricter observation of safety procedures – the answer is most likely no. This Government paying compensation equivalent to that ordered by the Court yesterday would recognise that.

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  5. projectman (204 comments) says:

    And just how does the judge manage to make the quantum leap from “we don’t have any money to pay” to “total lack of remorse”?

    I doubt that her personal views on the matter are of any relevance whatsoever.

    Sitck to the facts, Judge Farrish.

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  6. labrator (1,745 comments) says:

    Absolutely gobsmacked at how incompetent Judge Farish came across in the Herald today.

    “It is not often a company steps back and holds its hands up and says, ‘I have nothing’,” she said.
    “Even a company in a fragile state usually comes forward and offers reparation, but here nothing has been forthcoming.”

    It’s like she doesn’t understand how company law works. Apparently because NOG were shareholders, they should pay the compensation she’s ordered on a company in receivership (not a ‘fragile state’). Once again people wanting to change the rules after the game has started.

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  7. PaulP (141 comments) says:

    @Paulus 11.18am

    $7m to this trust “pledged”. Not sure how much collected but that’s what it says here
    http://www.pikeriverdonations.org.nz/donation-update/

    Also says here there’s another trust set up by the Pike River Coal Company http://www.pikeriverdonations.org.nz/about-the-trust/

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  8. hj (6,350 comments) says:

    didn’t those old miners know as well as anybody whether the mine was safe or not? I have a friend who worked at Strongman mine and he knew a miner who worked at Pike River who said he “never felt good about it”.

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  9. Rich Prick (1,542 comments) says:

    Pike River …. so over it. That aside, I have never in my life heard a judge “hint” that a third-party not before the court ought to pay another party’s fine and reparation. Unbelievable!

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  10. projectman (204 comments) says:

    Re HJ at 12:33 pm

    It will be very interesting, when Peter Whittall comes to trial, to see what angles are taken on the responsibiltiies of the mine workers themselves in the leadup to the first explosion, including their safety manager, what comments were or were not made to management and what notice was or was not taken of them. Perhaps this was covered in the Royal Commission, but I don’t recall the details.

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  11. Bad__Cat (137 comments) says:

    Yes, 29 men died. Yes it’s sad. Yes it’s tough for the families.
    However, in the same year 48 other people died in workplace accidents in New Zealand.

    They didn’t have millions raised for their families. Their supporters aren’t on the news two years later asking for Government assistance.

    Pike River has become a Grievance Industry. Get over it

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  12. Tauhei Notts (1,607 comments) says:

    I still have the book on my shelves. It cost $4.50. It was written by Richard Northey’s father, the redoubtable J.F. Northey. If anybody knows Judge Jane Farish’s address tell me, and I will send the book to her. It will be new reading for her, and instructive. It is called
    “Introduction to Company Law”
    I studied it in 1969 and can assure readers that if my knowledge of company law was as deficient as that exposed by Farish’s comments in this morning’s New Zealand Herald, I would not have passed stage two Commercial Law.

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  13. gump (1,481 comments) says:

    I agree that the Government shouldn’t foot the bill for the court ordered compensation.

    But it does seem somewhat egregious that over $80 million dollars was paid out in insurance – but only $156,000 remains within the company to pay towards court ordered fines of $4.17 million.

    I feel that there is a strong argument to be made for making the Company Directors personally liable. If they want to take Directorships then they should insure themselves against the risks resulting from their poor management decisions.

    For the record – I am a company Director. Though I have no connection to Pike River.

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  14. gravedodger (1,514 comments) says:

    I guess when the natural scapegoat faces justice sic, we might finally get a bit of evidence as to:

    What was the possible contribution of the 29 dead and the other underground workers to the disaster.

    Who was the person who held the responsibility for the Men going in that day.

    I understand the father of one of the dead and one of the two survivors held the job “mine safety manager” or similar.

    I have survived some seriously dangerous practices, some with calculation and some with a bit of good fortune, but wild horses would not have had me going into a hole in the ground with flamable Gas, masked detectors, banned articles on the person of another miner, and two miles of access with no alternative escape route. Why not get a job polishing handgrenades with the pins removed

    Had those men been forced into the mine at the prodding of weapons and wearing shackels I might have more sympathy but they freely went in and there must be some small component of derilection of personal safety codes at play.
    And please do not tell me they were forced to by ecomnomic pressure.

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  15. RossM (36 comments) says:

    Do the families want justice or do they want money? It looks like it was just money they always wanted. The country could have saved the cost of a trial.

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  16. Akld Commercial Lawyer (160 comments) says:

    I am not surprised that the DCJ was affected by the raw emotion, particularly, of the victim’s impact statements. After all this time, it was probably one of the few opportunities for those families to have their day in Court.

    As a commercial lawyer, I do have to admit to being a bit frustrated at the empty gesture of levying fines against a company that is skint. And the issue of no-one turning up to answer for the company is what it is when the company itself is in receivership and there are further proceedings to come against individuals.

    And, despite the obvious points of technical difference between Pike River and Cave Creek, I full expect that when all of the court cases have been heard, whichever Govt is in power will do something more for the families. I make this point because I can’t see it escaping the present Govt that they were part of the chain of causation and (a bit like Councils and leaky buildings) are the only ones left with any dough when the dust settles.

    The difficulty at present is that the state is still taking prosecutions against some of the others in the firing line. When that process has run its course, then there will be some mopping up to be done.

    In this manner, whatever is (finally) done by way of recognition of the failings of the way in which HSE matters were overseen by the old MED will not, in my book, be a case of the poor old taxpayer copping it in the wallet for the failings of a private sector business.

    Finally, I do not know the families’ lawyer and whilst his statement above might seem inflammatory and perhaps not quite how I might put the matter myself, I think he is doing a good job of jogging everyone’s elbow that this sad saga is not done yet. But then, IMHO, you don’t get to be a QC without (i) being on top of your game; and (ii) having quite a wide range of skills as an advocate.

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  17. Nostalgia-NZ (4,907 comments) says:

    ‘I make this point because I can’t see it escaping the present Govt that they were part of the chain of causation and (a bit like Councils and leaky buildings) are the only ones left with any dough when the dust settles.’

    I agree, but not only for the reason that they are the ‘only ones left with any dough when the dust settles.’ In fact that is hardly a reason when compared to the gravity of Government Departments being able and resourced efficiently to do their jobs properly. If they fail, because of lack of resources as it seems happened here, then that is where the buck stops. Whichever is the case, Directors, CEOs are also not held responsible much to the frustration of a growing number of people. I can see a lot of disquiet ahead and off the cuff responses to the problem before perhaps the Law Commission or a select committee look into it across the board, Government, Councils, Directorships etc, finance and the insurance industries being good examples of a ‘job title’ or ‘employment liability restrictions’, offering an indemnity from private or criminal prosecution that many in the public increasingly see as a type of fraud.

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  18. Akld Commercial Lawyer (160 comments) says:

    @Nostalgia, whilst I understand your sentiment – I fear that you have lumped a hotchpotch of issues together to come up with a sort of liability stew. This is not the forum or the time for separating out the different strands. And I, for one, have one eye on the rugby in Sydney.

    In the case of many of the failed finance companies, I think that the law is working (at least in part) those who were a party to fraud are now incarcerated. Those who were guilty of negligence are suffering lesser penalties – but their careers are ruined. Noting that such negligence often manifested itself in trying to save a sinking ship. Perhaps Blue Chip is the only high profile example of those responsible not getting what they deserved.

    On Pike River, I will await the evidence and the Court’s verdict.

    But short of a guilty mind and being consciously involved in the wrongdoing (or wilfully blind to it) if we start jailing the boards and management of businesses, local authorities etc for failings of every hue – the governance that those organisations need, will break down. No-one will want the job. Most people lost their savings in finance companies because of an unhappy combination of poor advice (or failing to get or follow advice) about the risks involved and the inevitable outcome of severe, adverse, market conditions. That’s a world away from businesses that fail to prevent people being killed or maimed through a collision of preventable events and inadequate care.

    Frankly, the MSM is so poor in conveying the key issues in so many current matters that I have little regard for what is conveyed in their version of the court of public opinion. Perhaps that is one of the attributes of what is euphemistically called late middle age. I am pretty confident that what I want will have little to do with the outcomes of much of what I deal with – but nonetheless I am increasingly comfortable with my own judgement. (Andt I am not at all offended if others don’t care what I think or are quite comfortable with their own judgement).

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  19. Nostalgia-NZ (4,907 comments) says:

    ACL:
    Yes I did lump a hotchpotch of issues together but they all have one thing in common: responsibility for decisions, omissions or lethargy. That’s life, just as is the enduring agony of the 3rd Test in Aussie.

    Cheers.

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  20. Jinky (170 comments) says:

    “However I do not believe it would be a good precedent to have taxpayers responsible for the failings of private companies.” says David Farrar. I think you may be slightly too late with that comment. How much have the taxpayers of NZ paid to cover the losses of finance companies, banks and insurance companies here and overseas that were “too big to fail”. I’m sure that would come to a lot more that $3 million. The Royal commision pinned a large portion of the blame for Pike River on the failures by the Labour Dept and the national Government have accepted that and moved to fix the issues. Most Kiwi’s would see a payout to families as being fair and reasonable. Blaming the victims of the explosion is mean and cowardly.

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