Chapter 18
Recommendations for reform


18.1We have concluded above that there is a need for legislative reform to serve the two purposes of:

18.2We have considered what form this new regulation should take. The Policy Framework for Occupational Regulation endorsed by Cabinet in 1999 states that legislative intervention in an industry could be justified when “incompetent service by a member of an occupational group could result in significant harm to the consumer or a third party”.359 The potential harm should be significant because otherwise the compliance costs of intervening may outweigh the harm done. A “significant harm” may be either a significant harm to one person or a moderate harm to a large number. If the harm is irreversible, it is more likely to justify intervention.

18.3We consider that some low-level regulation directed at the funeral industry is justified given the importance of funeral services and the need to promote high standards in the industry. There is a risk of significant harm if things go wrong in this industry, due to the large financial cost of funerals and the emotional and spiritual importance given to funeral arrangements across all sectors of New Zealand society. That harm is compounded by the fact that any emotional distress cannot be easily rectified or financially compensated. In addition, consumers are uniquely vulnerable, and common industry practices make it difficult for them to negotiate for goods and services.

18.4While intervention in the industry may be justified, the costs of compliance and administration of any new regulatory regime should be kept as low as possible. This is not an industry plagued by problems that justify heavy-handed intervention. Rather, it is an industry in which there are vulnerable consumers who deserve robust protection.

18.5We consider that the problems that exist in the sector are not so severe that a completely new regulatory regime is required, such as the licensing systems found in the Lawyers and Conveyancers Act 2006 or the Health Practitioners Competence Assurance Act 2003. Such high-end occupational regulatory reforms require significant investment and are not justified in this industry. Instead, an enhancement of the existing protections is a more appropriate response. This should provide greater public assurance about the delivery of funeral services and provide consumers with more information to strengthen their ability to negotiate for funeral services. Any recommendations should not impose significant regulatory costs on the sector.

18.6In this chapter, we outline two main proposals for reform. The first set of proposals relates to improvements to the registration system, including the provision of clear statutory duties. The second set of proposals relates to the mandatory disclosure of component prices of services provided by the funeral sector.

18.7The principal objectives of reform are to ensure that:

359 Cabinet Office Circular “Policy Framework for Occupational Regulation” (8 June 1999) CO 99/6 at [6].