Legal Services Amendment Bill (No 2)

Part 2 of the Legal Services Amendment Bill (No 2) deals with transitional provisions. It is made up of clause 43 and clause 44.

Clause 43 deals with applications for legal aid and grants of legal aid made before the commencement of this Act. Basically it gives assurance that the provisions of this Act—once the bill comes into force—will not affect applications for legal aid or grants of legal aid made before the commencement date. The commencement date, as we see in clause 2, is a date to be appointed by the Governor-General by Order in Council; obviously, it looks forward to the time when the bill passes into law. As clause 43(2) states, this Act will not affect applications for legal aid or grants of legal aid made before its commencement. That raises the question of whether those applications would be better dealt with under the new Act. I am sure my colleague Chris Finlayson will have something to say about that. For applications that are pending, so to speak, applicants will decide for themselves whether they are in a better position now than they would be under the new Act. Perhaps the Minister in the chair, Pete Hodgson, will take a call to clarify—[Interruption]—what a shame—clause 43(2). Maybe it is not as complicated as it seems on the face of it. So that deals with that.

Clause 43(3) states: “Sections 40 and 41 of the principal Act (as substituted by section 26 of the Legal Services Amendment Act (No 2) 2005) apply to any proceeding for which legal aid has been granted on or after the commencement date.” So the new Act will apply to any proceeding for which legal aid has been granted on or after the commencement date, and that seemingly carries those proceedings over to the new legislation once it is passed. Again, I wonder whether the Minister will take a call on that. He is usually an obliging Minister and I am sure he is in that frame of mind today. These transitional provisions—simple and short as they sometimes appear to be—can be quite tricky, and it always helps to have the Minister clarify for the Opposition, and certainly for me, the impact of them.

Let us look at clause 44, “Transitional provisions in relation to providers of legal services, etc”, in Part 2. I ask the Minister whether the provisions relating to legal service providers are carried over into the new legislation or dealt with under the old legislation.

Those are three legitimate questions, and it would not take the Minister all that long to clarify them. It would be very helpful if he did. But coming back to the thrust of the bill, because, after all, the transitional provisions relate to the bill itself, I say that there is disappointment on the part of the Opposition that this bill has not clarified matters or given certainty to those who are applicants for legal aid. They will enter the process not too much the wiser than they were under the old legislation as to whether they qualify. As I said in an earlier contribution, that is not good for the law or for the system. Certainty is an underlying value for the National Party.

There are two disappointments about this legislation. One point, as my colleague Mrs te Heuheu said, is that it is bad legislation because it fails to address the key point of access to justice. The second point that is something of a disappointment to me is that the Minister responsible, Mark Burton, is not in the chair. The Minister in the chair, Pete Hodgson, cannot reasonably be expected to comment on anything that the Opposition raises, and indeed the Government MPs barely get involved in the debate and basically sit like zombies.

Be that as it may, let us turn to Part 2, which deals with the transitional provisions. The heart of the transitional provisions is, of course, subclause (2) of clause 43, which provides that the provisions of the amendment bill do not affect applications for legal aid or grants of legal aid made before the commencement of the legislation, except as provided in certain circumstances. I will briefly look at those now.

The first set of circumstances, as set out in sections 40 and 41 of the principal Act as amended by subclause (3) of clause 43, deals with two situations: firstly, the liability of the aided person for costs and, secondly, the costs of the successful opponent of the person who is on legal aid. In the second reading speech that I gave, I said I regarded both of those provisions as practically useless because there will be very few, if any, occasions where an aided person will actually be made liable to pay costs. Indeed, the changes made to the substituted section 40, in my view, almost tighten up the situations where costs can be granted and make it harder for a person who has gone to the expense of opposing a plaintiff on legal aid to recover funds. Those transitional provisions are inserted in there, but really they are of no moment because the provisions of the Act in relation to the liability of the aided person for costs and the costs of the successful opponent of an aided person have not been properly addressed.

The only other part of clause 43 that needs to be referred to concerns the transitional arrangements in relation to the Legal Aid Act 1969. I would not have thought that in 2006 many of those charges would be left at all, so that is almost a question of the law not being concerned with trifles.

The next clause, clause 44, deals with a number of transitional provisions in relation to the providers of legal services. I will say something about the first of those sections. Section 68 of the principal Act, as substituted by clause 31 of the bill, raises quite an important point. Under the previous Act, listed providers had to protect the agency’s interests in relation to charges and the proceeds of proceedings, and in many respects were almost like agents of the agency in terms of the information they had to provide. That was the subject of quite a lot of discussion in the Justice and Electoral Committee, and members may note that the original subclause (3) of new section 68 was struck out and replaced by a new provision that states that an aided person is deemed to have waived any legal professional privilege that may otherwise prevent his or her lawyer from providing the required information to the agency. That is quite an important provision, and clause 44 provides that the transitional arrangements are such that it will apply regardless of whether the grant was made before, on, or after the commencement date of the amendment legislation.

Finally, section 72A of the principal Act, inserted by clause 32, deals with another set of amendments that make sense. They deal with the temporary suspension of the listing of providers of legal services and the cancellation of the listing of legal services. Those provisions apply whether the person was a listed provider on or after the commencement date.

I, too, rise to speak to Part 2, the transitional provisions provided for in the Legal Services Amendment Bill (No 2). It is easy to dismiss transitional provisions of any bill or statute as technical, trivial, or even boring, and as mere machinery provisions, and, accordingly, to overlook their very importance. But they are important and they are deserving of very close scrutiny indeed.

Although transitional provisions are frequently required as a consequence of a change in law, that change may be the result of the repeal of existing legislation or its replacement with new legislation. It may also be the result of amendments to existing legislation that do not necessarily involve repeal, whether in whole or in part. In this bill we have a bit of both. We have some repeal and we have some amendments. Accordingly, we must look carefully at any existing situations, rights, and interests of the parties, to determine the effect on them of this proposed legislation. It is all too easy to focus on how the legislation will work in the future rather than on the transition to the new arrangements. The problems caused by inadequate transitional provisions or, in fact, no transitional provisions can be considerable and far-reaching, and it is for this reason that we really do need to give these two very important clauses some close scrutiny. I liken it to a “what if” situation. Members have to ask themselves what if a certain circumstance arises or occurs—is it covered by these transitional provisions?

For example, under this legislation we must consider what happens to a person who was financially ineligible for legal aid and is part-way through a case. Under these expanded criteria, which now allow an extra 450,000 New Zealanders to become eligible for legal aid, a person may become eligible even if a case is midway through. That is tough, because under the transitional provisions the bill does not affect applications for legal aid or for grants of legal aid made before the commencement date. So we may in fact have a situation where the applicant in a court case is actually disadvantaged because of the inadequacy or otherwise of these transitional provisions.

If the applicant was ineligible for legal aid at the first hearing, but took the matter to subsequent appeal, would he or she be eligible for legal aid for that subsequent appeal? Those are the questions that as members of the House we must be asking, in order to ensure that we are indeed making good law—even though this part is what some would call a technical, boring machinery provision of the bill.

What happens if the person is embarking on mediation proceedings, for which legal aid was not previously available? Under the transitional provisions of this bill, legal aid could possibly be available. The important date is, however, again, that on which the application for legal aid is made, not the date of the proceedings. What happens if a person who was previously eligible for legal aid becomes ineligible, for some reason, following the passing of this bill? Again, we must look at the date on which the application for legal aid was made.

Can a person midway through a case who now becomes eligible for legal aid, having previously been ineligible for legal aid, apply for legal aid? Many of the additional 450,000 New Zealanders who are now eligible for legal aid are midway through a case. If they can apply for legal aid, how do they apply for it? What is the procedure for those midway litigants? Will the case be adjourned? We do not want a miscarriage of justice, because that would lead to more appeals and more legal aid. Will the case be adjourned to enable the legal aid documentation to be put in place? If the case is adjourned to enable the documentation to be put in place, then the judge has to set the case down for another hearing date.

In the meantime, the applicant fills in the legal aid application form. We have heard in the debate on previous parts of the bill how onerous some of the bureaucratic requirements of the legal aid regime really are. So the poor old applicants may have their cases adjourned halfway through. They get another hearing date and fill in all the forms. This may take time, because they will have to substantiate the details on those forms. They may have to substantiate their income—they may have to get that information from their accountant—they may have to substantiate their capital position, they may have to get a valuation of their property, and they may even have to substantiate whether they are actually single, married, or separated, to determine exactly what their assets are and what their income is. All this takes a lot of time and incurs a lot of cost.

In this scenario the Legal Services Agency becomes inundated with all these applications from New Zealanders who are suddenly eligible for legal aid. The agency cannot cope with them. We have even more bureaucracy. The new hearing date arrives—I ask members to bear with me through this scenario, because I do not think it is as far-fetched as some might think—and the poor old person who is getting legal aid turns up with his or her counsel, but because of the inundation of the Legal Services Agency with all those extra applications, that person’s legal aid eligibility has not yet been determined. The lawyer then has to apply for a further adjournment, and the judge has to set a further rehearing date. All that that does is clog up the already clogged up system. It wastes the time of counsel on both sides, it wastes the time of the judges, and it wastes the time of the clerks. It is another level of what could be termed unnecessary bureaucracy.

Of course, there is another scenario that I will go through as well—this time, perhaps, not in such detail, because I am aware that my call is about to come to an end. What happens if people currently midway through a case have a lawyer who is not an approved legal aid provider? That lawyer may well have to apply to be a legal aid provider. Nothing in these transitional provisions makes adequate provision for a scenario in which a client suddenly becomes eligible for legal aid halfway through a case but his or her lawyer is not a legal aid provider. Again, we may have further adjournments and a further waste of time. At the end of the day the paramount issue of this bill is access to justice. One cannot deny justice to a person who is halfway through a case. This House is changing the rules, and that person will now be legally eligible for legal aid. That person’s lawyer, who thought he or she was not doing a legal aid job, suddenly finds that he or she has to be a qualified, certified legal aid provider. There is absolutely no mention of what happens if a lawyer who is not a legal aid provider is part-way through a case.

This highlights the importance of transitional provisions, which can be overlooked. They are not to be taken lightly; they are machinery provisions, but they are very, very important. When members look back at some of the speeches that have been given on this bill beforehand, they will see that we on the Opposition side of the Chamber have highlighted the difficulties with the amount of bureaucracy, and the fact that because of the bureaucracy there are fewer legal aid providers. I would like to mention again a local firm that wrote to the Legal Services Agency about this bureaucracy: “It is with regret that we advise that this firm will no longer undertake legal services for new matters—”.

I move, That the question be now put.

I wish to raise one very technical matter that I have not quite finished with. It relates to clause 44(2), which deals with sections 72A and 73 of the principal Act. [Interruption] As Mr Hughes would have heard me say, those sections deal with the issue of suspension or cancellation of listing by lawyers who may be engaged by the Legal Services Agency. The only point I wish to make—and I heard Mr Fairbrother interject to ask my friend Ms Wilkinson whether this was discussed at the Justice and Electoral Committee, and indeed it was not—is in respect of this issue. It could not have been reasonably expected to be raised at the select committee.

Since this legislation has come back to the House, we have dealt with the Lawyers and Conveyancers Bill. As Mr Fairbrother will realise—and I am sure Mr Hughes will, if he was listening to that debate—there is a completely different regime for dealing with recalcitrant lawyers in the Lawyers and Conveyancers Bill, and it is quite a lot more complex and subtle than the disciplinary provisions that are contained in the Law Practitioners Act 1982. Under new section 72A, which is inserted by section 32, a person may suffer a temporary suspension of his or her listing if that person “is charged with an offence or is subject to disciplinary procedures under the Law Practitioners Act 1982;”. I cannot imagine that the words “Law Practitioners Act 1982” will survive, but I am interested in whether that terminology is accurate to describe the new disciplinary regime under the Lawyers and Conveyancers Bill, insofar, obviously, as it relates only to lawyers, because conveyancers will not be able to apply for legal aid on behalf of clients.

The second point relates to clause 33, which substitutes new section 73 in the principal Act. That deals with cancellation of listing in one of eight circumstances. I have no problem with subsection (1), paragraphs (a) through to (g), but a question does arise for me about paragraph (h). That paragraph provides that there can be a cancellation of listing if “the person is convicted of an offence, or subject to an order made under section 106 or section 112 of the Law Practitioners Act 1982.” Of course, as I said, I am not sure whether the Lawyers and Conveyancers Bill has yet been assented to by the Governor-General, but the reality of the matter is that, given its imminent assent, we will need to do something about subsection (1)(h). It does not really capture the kinds of offences that will apply under the Lawyers and Conveyancers Act—as it soon will be—and that will necessarily be a factor the agency will need to take into account in determining whether a person will have his or her listing cancelled.

We have an opportunity now to tidy up that point. It is a technical point, but it should be tidied up and clarified now before this legislation is passed into law, and before we have to have another minor amendment probably tied up in a Statutes Amendment Bill in the rush at the end of the year. I would appreciate it if the Minister could provide some guidance on that. I acknowledge that it is not only a transitional matter but that it is a substantive matter, but it is one that has just come to my attention.

I move, That the question be now put.

When we look at Part 2, “Transitional provisions”, we think they look pretty simple and pretty effective. Clause 43(2) basically says that past applications will not be affected by the legislation, but clause 43(3) says that new ones will be dealt with by the legislation. It reminds me that a couple of weeks ago we had a similar situation in regard to the P endorsement for licences. The Labour Government was unwilling to make a distinction at that time between two tests that involved exactly the same question—rules for old ones and rules for new ones.

The Government was not willing to make that distinction then, but it is now. We cannot see any consistency in its lawmaking between the way it approached that situation and the way it is approaching this situation now. That is something that very much should be looked at unfavourably by members of the community, and also by the Opposition, because we are not seeing consistency in government.

I also note the word “transition”, and ask members what that means. Is transition the stage between Government and Opposition—like New Zealand First—or is it a period between a blip in an economy and a slight dip in economic growth, as Michael Cullen would have us believe economic growth is? Or is it the period between a Minister’s plans for Waikato roading needs in a pre-Budget announcement and a joint officials group for the Waikato?

💬 Hon Mark Gosche: What’s this got to do with the clause in the bill?

💬 Darren Hughes: Nothing.

Or is “transitional” ultimately what the current member for Otaki stands for?

The New Zealand Law Society in its submissions made some very good points in regard to clause 44. Society members went through section 68 of the principal Act, as substituted by section 31, and made some very good points—such as the proposed section 68 retains, and to some extent extends, the existing liabilities of legal aid providers. They stated that both the proposed and the original provisions failed to recognise that lawyers cannot compel their clients, and that lawyers should be liable for clients’ actions only where they have taken a positive step to assist clients in undermining the interests of the agency. Some very good points were made in that submission from the New Zealand Law Society.

In regard to clause 32, by which new section 72A is inserted—and which we also see in clause 44(2)—society members made similarly good points. They said that the section would authorise the agency to suspend temporarily the listings of providers who are charged with an offence, or who are subject to disciplinary procedures under the Law Practitioners Act. The society felt that a fundamental tenet of our legal system was that natural justice should be observed and a person is considered to be innocent until proven guilty, so it opposed the original section.

The New Zealand Law Society made some very good submissions in regard to this bill, and that is something we need to take into account as we look forward at the transitional provisions. Those provisions in themselves look very honest and genuine. They take up only a page in what is something of a lengthy document, in regard to this bill, but they provide a very good system where there can be both a new and existing process. That is something we tried to encourage this Government to do a number of weeks ago, yet it would not listen. It would not take that on board; it knew better. Yet within a day it was in the newspapers that the Government had made a mistake in regard to the P endorsement legislation. We will be facing that situation again in this Parliament. The transitional provisions show an approach that should have been used in that case. It is easy to make that distinction, and we should have made it the other day. We are willing to make that distinction now, but we were not, then. What is the difference?

💬 Anne Tolley: There is no difference.

There is no difference. The Government should have made that distinction then. It is common sense and it is consistent with our lawmaking approach around the country. So let us move in that way in the future.

I move, That the question be now put.