Legal Services Bill — In Committee 
Legal Services Bill — In Committee 
[Volume:671;Page:17676] 
Legal Services Bill 
In Committee 
Debate resumed from 8 March. 
Part 3 Administration of legal services system ( 
continued 
)  
CHARLES CHAUVEL (Labour) 
: 
 I will start with Subpart 1 of Part 3 of the Legal Services Bill which transfers the administration of publicly funded legal services from the Legal Services Agency to the Ministry of Justice and goes on to provide that the Secretary for Justice will be responsible for establishing and delivering legal services. I note that clause 68 sets out the functions of the secretary including assessing and determining the need for legal services by people of insufficient means. Clearly it is of concern to members on this side of the Chamber that there are reports so many people are having difficulty accessing legal aid or legal services that they have to consider representing themselves. I am concerned there is an idea that more legal aid payments are being made which seems directly related to the increase in both summary and indictable charges rather than the misconstrued idea that lawyers have somehow been gaming the system. I welcome the presence of the Minister in the chair Simon Power; the last time I was able to participate in the Committee stage of the bill we had another member of the executive sitting in his place and I think some of those issues need to be the subject of reassurances. 
The Secretary for Justice will have the flexibility to establish different legal services and different methods for delivering those services. The secretary will be able to determine which method of delivery is most suitable in a given situation whether by salaried lawyers as part of a public defender service private lawyers funded by legal aid or services provided by community law centres. Obviously that flexibility if it operates well is to be welcomed but there are some concerns about clause 68. I would like the Minister to consider taking a call to let us know his views on whether we are giving too much power to the executive and in particular to the secretary. The Minister will know that that concern was raised by the Law Society in this process. I think also it would be useful to hear from the Minister how the actual need for legal services and representation will be determined by the secretary and whether the issue of how community law centres are to be resourced on an ongoing basis is going to be front and centre in the mind of the secretary when he or she takes on this function. 
I am also very interested to hear the Minister’s view on why there does not appear to be any obligation to consult with anyone or any group when determining the allocation of legal services. Surely a statutory obligation of consultation which appears to exist under the current scheme would encourage better outcomes. I note that the departmental report which was considered by the Justice and Electoral Committee states that good administrative practice indicates that that consultation will occur. If that is the case it would be useful to hear from the Minister why we do not just codify the requirement so that we are assured it will occur rather than just fall by the wayside. 
The other matter worth drawing to the Committee’s attention is the insertion by the select committee of new paragraph 68(fa) which states that the secretary must “undertake or fund law-related research and education;” which was asked for by submitters to the select committee. If that is going to occur then how does it gel with the funding gap which the Minister has pointed to real concerns about? I think the figure we heard was $400 million in years to come. The Minister is nodding his head so obviously this matter has been thought about. We want to hear from the Minister about how we are going to reconcile what he says is a major funding gap coming up in the out-years in particular with the obligation that the secretary is to undertake or fund law-related research and education. On those points it would be helpful to hear the Minister’s views. 
I come to the rest of Part 3. Clause 69 empowers the secretary to contract with lawyers and law firms to undertake legal aid work. Presumably that provision exists to allow for providers in remote areas where there is not a good service in a particular area of speciality to assist with those who cannot afford to pay for their own lawyer. Clause 70 establishes the office of the Legal Services Commissioner. On clause 69 and the interplay with the clauses that follow I am interested in knowing whether the Minister has considered restricting the percentage of legal aid work that a lawyer or a law firm can do instead of leaving open the position so that all of the work a contracted law firm might end up doing is legal aid and whether he thinks that would be a desirable situation in any particular case. Obviously from the Minister’s facial expressions he has seriously considered that matter too so it would be helpful for the Committee to hear from him on that issue. 
On the issue of the Legal Services Commissioner we have as was said in previous contributions in the debate a move from an independent entity into the core executive. The Legal Services Commissioner within the Ministry of Justice will be responsible for the granting of legal aid the determination of legal aid payments and assigning and managing legal aid lawyers. Those were all formerly functions of a Crown agency the Legal Services Agency which will be disestablished by clause 117. Part of the work of the commissioner will be independent but also much of it will be carried out by the staff of the ministry under this legislation and that will not be done independently. So I think we need to hear from the Minister what guarantees are in place for the independence of the role of the commissioner and in particular the staff employed by the secretary but who are under the effective management or direction of the commissioner. 
I also have some concerns about Subpart 2 of Part 3 but I propose to leave those matters to later in the debate if I have the opportunity to take another call because I think it would be good to hear from the Minister on the other matters I have raised. 
Hon DAVID PARKER (Labour) 
: 
 Following on from my colleague Charles Chauvel’s comments I want to address the issue of community law centres just a little further. Clause 94 which sits in Part 3 says the secretary may enter into contracts with community law centres. I presume that it is through those contracts that the Crown sets out the sort of work that it is willing to fund community law centres for. The Minister in the chair the Minister of Justice nods. That change is a good thing. I think I have said previously in another part of this debate that we do need to take care that the primary thing that we are funding through community law centres is actually legal advice—legal advice for people who need legal advice in respect of problems that they often could not get a lawyer to be interested in and might not be able to afford to get any legal advice on. 
Community law centres provide a very very valuable and low-cost service to our country when it comes to advice on those generally more minor issues that can be none the less important to the individuals involved. If issues of more significance come through a law centre’s door and they do periodically then the normal practice is for the law centre to say to those people that they need some really decent legal advice from a full-time lawyer rather than a community law centre. So the matter gets referred on to a lawyer. 
Where there can be a problem is when one crosses the line between what is appropriate advocacy by community law centres on matters of principle to advocacy in favour of political causes. I have on occasions seen that from law centres where I think they have been perhaps applying the money that they get from the Crown to political causes which they no doubt believe very strongly in but there is an opportunity cost in them applying their resources to those tasks. The opportunity cost is that they are actually not spending it on legal advice for the people who come into legal centres in respect of legal problems. That balance needs to be carefully preserved and one of my reasons for that is I believe strongly in the importance of law centres and I am concerned that if we do not protect their core functions then if we get a law centre that goes too far with political advocacy it could annoy a future Government. I am not saying there is currently such an intention by either law centres or the Government but one can see that a series of events could be set up that would lead to funding for law centres being reduced in a way that would be to the detriment of the people who need advice from law centres. That advice is far cheaper than any other means that we have of delivering legal advice to people in New Zealand. It is cheaper than any other form of legal service either privately funded or through legal aid. 
The other issue I would like to touch upon briefly relates to civil legal aid because although some of the rules that are being changed in respect of the Legal Services Bill will change the way in which legal aid is granted they do not change the efficiency of court processes. The problem that we have in New Zealand is that court processes in the civil arena have over the years become too complex. They have become so complex that a lot of people cannot afford to access justice any more. Whether or not they are eligible for legal aid often legal aid is a loan to them. It has to be repaid. It is a cost to the Crown. It is effectively a loan to the individual who gets legal aid and it has to be repaid in the future. 
Although legal aid is very important and I do not decry the importance of legal aid the more important thing in my opinion is that we reform our civil court processes. I was a civil litigator for many years and I saw the change in process during the couple of decades off and on that I was practising. I saw our civil court processes become more and more complex. I have no doubt that if we run the full gamut of a court process through all of the interlocutory that can be forced upon parties these days whether it is applications for further and better particulars of the statement of claim whether it is questions asked before trial which are called interrogatories or whether it is the proliferation of expert evidence that seems to be admitted to courts all of these things are driving the length and cost of proceedings. 
When we get an outcome from a court decision the outcome of it these days is near perfect. Not many of them are turned over on appeal but there is always a trade-off between perfection and cost. When the pursuit of perfection goes so far that the cost of those legal proceedings because the processes have become so tortured and long becomes so high that people do not go to court to settle their disputes then there is something wrong with the court system. That is where we have got to in New Zealand. 
Someone told me and I have not had the opportunity to check this yet that in the High Court last year some 350 civil judgments only were delivered. In the whole of New Zealand there were only 350 judgments in such cases. I think that is an indictment on our legal system. A hell of a lot more than 350 disputes should have had the benefit of being litigated in court. Despite the fact that the number of judgments is down the length of law reports is the same. When we read a judgment now that comes out of the High Court most of them look like they are auditioning to write a new academic treatise on one subject or another. They have become in my opinion too often too academic and are becoming a little bit rarefied. I yearn for the day when we have judges who are a bit more robust— 
Hon Simon Power 
: Denning. 
Hon DAVID PARKER 
: Yes Lord Justice Denning or judges like Justice Holland or retired Justice Hansen who keep control of their courts have a good sense of fairness give the parties a hearing then deliver a judgment. We now virtually have no judgments delivered orally in New Zealand. It is very rare for an oral judgment to be delivered. Everyone goes away and they prepare a written judgment. Often that involves time from the judge and also clerks of judges who assist but in both cases it causes delay. Again I am not sure whether judges are fearful that they are going to be overturned on appeal if they do not turn over every stone that has been pointed at by one of the parties in the litigation but for these reasons our civil processes have become so expensive that they are not being used. That means that our court system is not serving the function that it is meant to which is to provide people with a non-violent way of resolving their disputes. 
The quality of justice cannot be divorced from its accessibility. Accessibility is largely a function of cost and cost is not cured just through legal aid. We must minimise these costs. We should have legal aid in appropriate cases but we must simplify these processes. So I would be interested to hear from the Minister of Justice his views on that. I know that the court rules are actually the Attorney-General’s rules. The Attorney-General sets the rules and I think that it is time for the Attorney-General to take some control of those rules and to improve court processes so that the amount that people have to get be it from a loan by way of legal aid or through their own means is not disproportionate to the amounts of money that are at issue. 
Hon SIMON POWER (Minister of Justice) 
: 
 In response to the Hon David Parker’s comments on the Legal Services Bill perhaps I could make three or four quick remarks. The first is that the need to expedite these matters before the courts and to ensure that that process does not divorce itself from quality representation and quality arguments is critical to a range of things the Government is undertaking across the justice area at present. I can tell him that if he holds his breath for long enough help is on the way in the jurisdiction. We are dealing with the criminal area; the family area is next on my radar. We have been doing some things on the simplification of the court processes themselves. Of course it was his Government that had the foresight to legislate for the removal of depositions and this Government that instigated it. We are making progress. 
To the matters contained in Part 3 of the Legal Services Bill and in particular on community law centres I share the member’s view that it is the role of community law centres to provide legal services to clients who cannot afford to seek that advice by way of payment directly from a law firm. Of course it might not be the case in the member’s part of the world but many of these community law centres actually employ full-time lawyers. So the ability to simply hive people off to another firm is not always the case with some of these bigger community law centres around the country. 
One of the things we are working hard towards is consistency of advice across those community law centres sound governance arrangements across those community law centres and relevance to a particular community to make sure that the skill set is correct. Those three categories of compliance have had diverse contributors to them—if I can put it that way—over the course of the last while. But I can assure members of the Committee that this Government and I are committed to the continuation of community law centres and the quality service they provide. 
I have a couple of quick responses to some of the comments raised by Charles Chauvel. Firstly on the statutory obligation to consult I briefly advise the member that the consultation provisions in the Legal Services Act 2000 frankly were used to stall and slow down legal aid reform during previous times. It made the development of the public defenders’ service much slower and far more expensive than it should have been. My experience has been that having a codification of statutory consultation actually invites that type of process to occur where differing benefits accrue. So on that basis I have no doubt that consultation will occur where appropriate. In respect of legal research and education as I am sure the member knows the secretary may undertake or fund law-related research and education rather than must. Law-related research and education is a traditional yet very small part of this particular vote and of the legal aid scheme. 
A party vote was called for on the question  
That Part 3 be agreed to. 
Ayes 110 
New Zealand National 58; New Zealand Labour 41; ACT New Zealand 5; Maori Party 4; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Part 3 agreed to. 
Part 4 Transitional and savings provisions amendments to other enactments and repeals 
CARMEL SEPULONI (Labour) 
: 
 I want to speak on the Legal Services Bill but I also have to acknowledge that I am a newbie on the Justice and Electoral Committee. I have some questions but I will not pretend I am an expert like my colleagues Charles Chauvel or David Parker on this particular issue. Before I get on to Part 4 I need to say that Labour believes that reforms are necessary with an emphasis on the public defender system community law centres and a focus on quality assurance. However we have concerns about this bill and the Government’s overall direction in regard to its justice policy which seem to inhibit access to justice. 
I will get on to Part 4 “Transitional and savings provisions amendments to other enactments and repeals” and Subpart 1 “Transitional arrangements for transfer of Legal Services Agency to Ministry of Justice”. The Legal Services Agency will no longer exist the public advisory committee will be disestablished assets and liabilities of the agency will be transferred to the Ministry of Justice and employees of the agency will be transferred to the ministry unless they do not consent and the terms and conditions of their employment cannot be any less favourable than those before the transfer. In the transition legal aid granted by the old 2000 Legal Services Act is not affected by the enactment of the new legislation. Some of the non-legislative changes we see here as well as the changes outlined previously include the Government’s decision to expand the Public Defence Service to Hamilton Wellington and Christchurch and to work with community law centres to develop a uniform set of standards. 
The Public Defence Service was launched in 2004 by the then Minister of Justice Phil Goff in the Auckland and Manukau courts as a 5-year pilot and in August last year the Legal Services Agency made the service permanent. The Public Defence Service has its origins in Labour’s 1999 manifesto which I think is important to point out. There have been two independent evaluations of the service and both found it offered savings and lawyer costs. When compared to the estimated cost of equivalent private providers there was a saving of $985000 over the period of the pilot. Those savings were achieved with no difference in outcome for the client as measured by overall conviction rates. Simon Power announced in April that the Public Defence Service would be expanded to Hamilton Wellington and Christchurch. 
I will turn to the Bazley report. In April 2009 the Minister of Justice Simon Power appointed a panel chaired by Dame Margaret Bazley to review the legal aid system. Dame Margaret produced a discussion document in September last year which outlined some concerns and then a final report in November of last year called  
Transforming the Legal Aid System 
. The report was damning and prompted the Government to announce an overhaul of the legal aid system. What were the findings of that review? It found variable-quality legal aid services including a number of lawyers who were poor performers and some who were alleged to be acting in a corrupt way. Dame Margaret found that around 200 lawyers were apparently rorting the system. The review found that some practitioners paid backhanders to duty solicitors who recommended legal aid applicants to them. Some practitioners demanded top-up payments from clients over and above the remuneration they received from the Legal Services Agency. There had been complaints of dishonest behaviour to the Law Society that were not acted on. Lawyers and defendants colluded to make sure cases took as long as possible a mutually beneficial arrangement under which the lawyer racked up fees and the defendant delayed conviction and sentencing—I am just going through the findings of the review here. The quality of legal aid lawyers was variable and many of them showed up at court unprepared or late. Some lawyers gamed the system apparently by delaying a plea or changing pleas part-way through the process in order to maximise legal aid payments. Specifically Dame Margaret was told that up to 80 percent of lawyers practising at Manukau District Court could have been gaming the system. That is what she was told. 
I would really like to hear the Minister’s thoughts on that issue particularly in relation to what is being proposed in Part 4 of the legislation. A lot of the questions I had on the bill were around Part 3 but Part 3 went by and we have moved on to debate Part 4 now. 
The CHAIRPERSON (Lindsay Tisch) 
: I remind members that we are on Part 4 which is a pretty narrow debate. It is not a peroration of the review. 
CAROL BEAUMONT (Labour) 
: 
 I rise to speak on Part 4 of the Legal Services Bill. I note in relation to the bill in total that we have supported it to date but Labour is keeping its support for the bill under review. As Mr Chair said Part 4 “Transitional and savings provisions amendments to other enactments and repeals” is a very narrow provision. 
Part 4 has five subparts. Subpart 1 is “Transitional arrangements for transfer of Legal Services Agency to Ministry of Justice”—we have raised concerns about potential issues of independence there—Subpart 2 is “Transition of matters commenced approvals granted and funding provided under former Act” Subpart 3 is “Transition of matters commenced under Legal Services Act 1991” Subpart 4 is “Amendments to other enactments” and Subpart 5 is “Repeal and revocation”. 
One of the transitional arrangements under Part 4 is that employees of the Legal Services Agency will be transferred to the Ministry of Justice unless they do not consent. That provision is very important. In these times of high unemployment it is very important that people have employment security so I certainly support that provision. We have 158000 New Zealanders out of work at the moment so at least the people in the Legal Services Agency have the option of transferring to the Ministry of Justice and the transfer will see that their terms and conditions of employment are no less favourable than what they currently have. I put on record that in these tough economic times of high unemployment that transitional provision is important. 
I want to ask the Minister of Justice a couple of questions that are more to do with non-legislative changes. In terms of the transition from one system to the other a number of announcements have been made in conjunction with the bill that I think reflect the transition. First of all there is the decision around expanding the Public Defence Service to Hamilton Wellington and Christchurch which my colleague Carmel Sepuloni referred to and also working with community law centres to develop uniform sets of standards. I am just wondering what the transitional provisions will look like and whether there will be continuation of them given the Minister’s departure from his role. The Minister has made a number of undertakings and a number of announcements in relation to the bill so I seek from him his commitment that those transitional provisions will continue after his departure. 
The other thing I want to ask the Minister about is the funding gap that my colleague Charles Chauvel mentioned when he was speaking on Part 3. I understand that there is a funding gap of $400 million. Again I ask what the transitional arrangements will look like in relation to some of these non-legislative changes—like the expansion of the Public Defence Service to Hamilton Wellington and Christchurch—given the $400 million funding gap. Of course we know that the Budget the Government will be announcing this May is likely to see cuts in public services across the board and many important core services that assist New Zealanders like Working for Families will be under threat. 
Going back to the transitional arrangement that is alluded to in Part 4 I want to check with the Minister about the certainty that these other announcements that have been made by the Minister in relation to changes like expansion of the Public Defence Service will be able to be honoured by the Government in light of the funding gap of $400 million and the reality of the cuts to public services that we are all expecting. I think they are fairly important transitional arrangements too. I acknowledge that they are non-legislative matters but it is important to note that the announcements have been made in conjunction with the Legal Services Bill. I ask the Minister for his comment on those matters. 
CHARLES CHAUVEL (Labour) 
: 
 I will add my voice to the request made by my colleague Carol Beaumont. It would be very helpful to have the Minister of Justice take a short call about the transitional savings provisions and other repeals and amendments. As Carol Beaumont said the transitional and savings provisions in Part 4 of the Legal Services Bill in themselves are not comprehensively different from what we might expect in other similar legislation. Obviously the Legal Services Agency goes out of existence and is replaced as far as its functions are concerned by a core employee of the executive. But in respect of that transition there is one important disestablishment which is the public advisory committee to the old Legal Services Agency. 
When we had some questions earlier about the benefits of inserting a consultation provision in the statute the Minister’s reply was that consultation actually held up reform earlier and was not terribly useful but he was sure that officials will consult anyway. I am not sure that that reply is as reassuring as members on this side of the Chamber would have hoped. It would be helpful to hear from the Minister about the public advisory committee’s disestablishment and about what means will be in place for the Secretary for Justice and the commissioner to hear from the public about the sorts of access to justice issues there are out there and how they are truly to be met in what is obviously intended and envisaged by the Minister to be a more flexible situation. Instead of having just contracted legal aid providers there will be a mix of those types of providers and the public defence system as well as this notion of firms contracting to provide services to fill the gaps. 
On the statutory issues I think it would be helpful to hear about the extent to which there will be any obligation or expectation on consultation with the public over those access to justice needs and how they will be filled. On the matters of transition that are not legislative but none the less very relevant because they arise from the same sorts of questions I congratulate the Minister. I congratulate him on his announcements about the extension of the public defender scheme. I remember when the public defender scheme was set up under the previous Government the resistance encountered from the profession to not only setting it up but also having it properly evaluated and then having it expanded. I commend the desire to see the scheme extended to Hamilton Wellington and Christchurch. As Carol Beaumont said it would be helpful if the Minister were to update the Committee about his intentions. Public information about the extension is somewhat dated so it would be useful if the Committee could be told whether the intent is to extend the scheme especially to Hamilton and Christchurch. 
Obviously the benefit of extending the scheme is that it provides some contestability for those who are simply contracted providers. The evidence appears to be that where the public defender scheme has operated it has operated very efficiently and effectively it has used public money effectively and it has set up tension with the contracted providers so that there is something to benchmark performance with—one against the other. If the Minister can confirm that the public defender scheme is going to be extended as an effective part of the transition to the new regime in order to keep everything honest in the new system as well as to provide an alternative service it would be useful. 
I note that there have been two independent evaluations of the service. Both evaluations found that it offered savings in lawyers’ costs when compared with the estimated cost of equivalent private providers. In respect of the Auckland pilot the saving was nearly a million dollars. These savings were achieved with no reported difference as far as the clients’ experience of quality service was concerned and also as measured by overall conviction rates. Last April the Minister announced the extension to the other centres. Obviously we are nearly a year on from that announcement. Economic circumstances are not easy—we all recognise that—but we want to see excellent services. It would be very helpful to hear from the Minister in the chair on these matters. Thank you. 
Hon SIMON POWER (Minister of Justice) 
: 
 I am happy to update the Committee. Two further Public Defence Services have opened in Auckland on the North Shore and in Papakura. Since that time 3 weeks ago I opened the Wellington Public Defence Service. In fact I am a bit upset that the member did not see my press release and speech from that particular opening given that Kris Faafoi attended the opening of the Wellington Public Defence Service on behalf of the Labour Party. I can assure members opposite that progress is rolling out in a way and at a pace that I am sure they only wish they could have done when they were in Government and when they first promoted the Public Defence Service were it not for the strange arrangements that were in place regarding consultation and slow down at the time. 
The CHAIRPERSON (Lindsay Tisch) 
: I just remind members that if a party wants a party vote it needs to ask for one. Just because one votes against it does not mean to say that there will be a party vote. 
A party vote was called for on the question  
That Part 4 be agreed to. 
Ayes 110 
New Zealand National 58; New Zealand Labour 41; ACT New Zealand 5; Maori Party 4; Progressive 1; United Future 1. 
Noes 11 
Green Party 9; Independents: Carter C Harawira. 
Part 4 agreed to. 
Schedule 1 
The question was put that the amendment set out on Supplementary Order Paper 208 in the name of Rahui Katene to schedule 1 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand Labour 41; Green Party 1; Maori Party 4; Progressive 1; Independents: Carter C Harawira. 
Noes 64 
New Zealand National 58; ACT New Zealand 5; United Future 1. 
Amendment not agreed to. 
The result corrected after originally being announced as Ayes 48 Noes 64. 
Schedule 1 agreed to. 
Schedule 2 
A party vote was called for on the question  
That schedule 2 be agreed to. 
Ayes 106 
New Zealand National 58; New Zealand Labour 41; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 15 
Green Party 9; Maori Party 4; Independents: Carter C Harawira. 
Schedule 2 agreed to. 
Schedule 3 
A party vote was called for on the question  
That schedule 3 be agreed to. 
Ayes 106 
New Zealand National 58; New Zealand Labour 41; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 15 
Green Party 9; Maori Party 4; Independents: Carter C Harawira. 
Schedule 3 agreed to. 
Schedule 4 
A party vote was called for on the question  
That schedule 4 be agreed to. 
Ayes 106 
New Zealand National 58; New Zealand Labour 41; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 15 
Green Party 9; Maori Party 4; Independents: Carter C Harawira. 
Schedule 4 agreed to. 
Clause 1 Title 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 106 
New Zealand National 58; New Zealand Labour 41; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 15 
Green Party 9; Maori Party 4; Independents: Carter C Harawira. 
Clause 1 agreed to. 
Clause 2 Commencement 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 106 
New Zealand National 58; New Zealand Labour 41; ACT New Zealand 5; Progressive 1; United Future 1. 
Noes 15 
Green Party 9; Maori Party 4; Independents: Carter C Harawira. 
Clause 2 agreed to. 
Bill to be reported without amendment presently.