Subscribe to listen
- Share this article
- Copy Link
- Twitter/X
Microsoft 365 outage affects house settlements and court appearances.
New Zealand businesses have been left scrambling to find alternative options for communication after a global Microsoft 365 outage took down email and instant messaging services on Friday.
The US software company which runs Outlook, Teams, Copilot and OneDrive among other services, says it is “actively monitoring” the performance of
affected infrastructure and making efforts to recover server availability.
The outage began at 6.30am NZT on Friday and caused widespread disruption across the legal sector, with property settlements and court appearances on the line.
On Friday night, the issues had yet to be resolved.
Microsoft’s executive vice president Charles Lamanna says there is “no indication” the outage is due to “malicious or cyber activity”.
The company revealed late Friday afternoon that steps taken which it hoped could fix the outage hadn’t worked.
“We’ve monitored the status of the changes applied to improve serviceability and confirmed that change is not taking as expected,” it said in a message on social media.
“We’re identifying alternate workstreams that can be applied to increase capacity in the face of sustained traffic management imbalances.”
Information Technology Users Association chief executive Craig Young said Microsoft customers should expect to be compensated “especially if any loss can be clearly shown”.
“It shows how reliant we can become on a single provider and is a warning to have disruption plans.”
A Microsoft Australia-New Zealand spokesman said the company had no comment on potential customer compensation at this stage.
Paul Spain, chief executive of Gorilla Technology, said so much of New Zealand’s business relied on Microsoft’s infrastructure.
“When they break, they have a massive impact, not just on individual businesses but on the entire economy.”
Spain said there could be tens of millions of dollars lost in productivity.
Disruption to property settlements
The New Zealand Law Society said the outage had significantly disrupted property settlements across the country, preventing firms from fulfilling legal commitments and receiving bank drawdown information.
“We are urgently liaising with the banks to explore workarounds and will update you as soon as possible,” said Property Law Section chair Kristine King in a letter to members.
She encouraged practitioners on either side of the transaction to discuss options for keeping settlements moving.
“These might include an alternative firm email address, such as Gmail, WhatsApp for encrypted sharing of undertakings, payment confirmations and screenshots, or using text messages and video calls.
“Verify any alternative contact details directly with the other lawyer using a known phone number and continue your usual checks before releasing funds.”
She asked members to contact their bank to understand how it would communicate with them during the outage, “including how drawdown information and payment confirmations will be provided”.
Sotheby’s International Realty agent Patrick McAteer said people could face penalties for failing to meet settlement dates.
“We’re hoping it will be fixed and we don’t roll into some of the clauses around our governance and compliance on our failed purchase agreements.
“We’re hoping there’s some good faith and trust involved with people being able to receive keys and move forward.”
He said there would have to be tolerance between lawyers and home owners.
Real Estate Authority (REA) chief executive and registrar Belinda Moffat urged people to speak to their lawyer or real estate agent and explore alternative ways in completing processes.
Its Licensee Portal and Register of Licensees remained operational, but it was unable to receive emails. The authority said it would work with anyone whose licensing or complaints deadlines were affected by the outage.
MAC Legal director Melissa Choppin, based in Rotorua, said while her company hadn’t been badly affected, an email outage could mean the difference between when, and if, property settlements were completed.
“Buying and selling a house involves a carefully timed combination of money, undertakings and messages between lawyers and banks.
“Settlement relies on the same-day cleared payment system, but email helps join the dots. Advice from the bank that loan funds have been paid, solicitors exchanging settlement undertakings, and confirmation that settlement is complete and the keys can be released.”
She said one delayed settlement could hold up the next purchase and the one after that, resulting in an “unhappy game of dominoes”.
Backlog in court appearances
A lawyer said the Microsoft outage had disrupted court appearances and had the potential to create a significant backlog if it continued.
Gul Law junior barrister Anya Khalid said a teleconference with Hamilton District Court could not go ahead on Friday morning, while staff at Waitākere District Court scrambled to work out how to manage scheduled appearances.
She said lawyers relied heavily on email to file bail applications and disclosure requests.
“If everything gets bumped to Monday, it’s just going to be the biggest backlog and courts are already struggling.”
Asked if businesses were too reliant on one system, Khalid said there may need to be separate systems to protect essential services from major technology outages.
“We should have things like hospitals and courts on a separate system so that at least those can run essential services.”
Microsoft shares fell US$3.23 in after-hours trading, reducing its market value by US$22.28 billion (although it remains one of the world’s most valuable companies with a US$3.88 trillion market cap).
The Ministry of Business, Innovation and Employment warned businesses to stay vigilant about sensitive information.
Manager of business capability Glen McCloy said the disruption was a timely reminder to have a contingency plan for unexpected service outages.
“Staff should only use approved communication channels and avoid sharing confidential or customer details over personal email accounts or unapproved platforms just to keep work moving.”
He said there were three practical steps businesses could take: use alternative communication channels, keep customers informed via websites and social media, and prioritise essential work.
- Share this article
- Copy Link
- Twitter/X
