Legal Services Amendment Bill (No 2)

We are here at this point in the day to debate the title and the commencement date of the Legal Services Amendment Bill (No 2), and I want to make some preliminary comments relating to the debate in the Committee just before members rose for dinner. I was very disappointed that the Hon Mark Burton, the Minister in the chair at the time, did not stand to allay some of the difficulties that my colleague Kate Wilkinson had with this bill. I thought she made a very worthwhile contribution on the transitional provisions—small as they are but, as she said, very important. They are so important that in my view they can wreck the operation of an Act if not carefully crafted, but the Minister did not stand to answer any of my colleague’s queries.

I was also disappointed that Russell Fairbrother, who was one of only three lawyers, I think, on the Government side present in the Chamber at the time, saw fit to shout out during most of Kate Wilkinson’s speech, but when I invited him to take a call, he did not see fit to do that. He should have done so, because I believe that a large part of his practice before he came into Parliament was around legal aid cases. One would think he would know better than most whether this bill, so titled the Legal Services Amendment Bill (No 2), actually does what the Government intends it to do.

On the basic underlying theme of access to justice, particularly for those who are not in a position to pursue their own side of a case before the courts, legal aid is hugely important. This bill, on the face of it, increases the number of those people eligible for legal aid, but in essence it was an opportunity given to the Government and the Minister of Justice at the time, the Hon Phil Goff, to make sure that, in conjunction with the 2000 legislation, it really covered the area of legal aid comprehensively. Only then might National have been in a position to say that we thought this Government was serious about access to justice, and about ensuring that those who should get legal aid do, in fact, get it. But we do not think the bill’s provisions do that, for a couple of main reasons. Those reasons have been covered in earlier parts of the debate, but certainly one reason is a lack of certainty on the process. National members think that the legislation that will be replaced by this current legislation adds more certainty in some cases.

I want to spend the rest of my time now, though, speaking around the issue that National has raised several times. Every time we raise this issue, members on the other side of the Chamber, including New Zealand First members, seem to think that we are looking after our rich mates. I do not know that I have any rich mates, but I do know that Māori people—mostly—are the ones who are affected if we do not have an effective and efficient legal aid programme in New Zealand. The issue is this: the Justice and Electoral Committee that took submissions on the bill was told in a financial review of the justice system that no consideration of legal aid rates would be made until after the bill was passed, and National members on the committee noted the publicly reported comments of the Prime Minister that that issue was a Budget item. Of course it will be a Budget item, but the very fact that the Prime Minister had to make that comment puts doubt immediately over whether the Government will indeed reconsider the rates at which defence lawyers are paid. Those rates have been fixed at 1996 levels, and we do not want the lawyers who make themselves available for legal aid to be only the younger ones in the legal profession. While those young lawyers are good, and they are learning, eager, and motivated, there is no doubt that more experienced lawyers would be in a better position, possibly, to defend people before the courts.

It gives me great pleasure again to rise to speak to the title and commencement date of the Legal Services Amendment Bill (No 2). I do not think that this bill should be called the Legal Services Amendment Bill (No 2), at all. I think it should be called the “Legal Services (Access to Justice) Amendment Bill”, because throughout our debate, members on this side of the Chamber have concentrated on access to justice as being the paramount issue. That issue seems to have been ignored completely by those on the other side of the Chamber.

I have said it before but I will repeat it, because I think it is so vital in terms of this bill. It is not access to justice where defendants who are defending their innocence have fewer resources and where their legal counsel has less time to prepare the case than their prosecuting counterparts. It is not access to justice when victims of domestic violence who are in desperate need of prompt, competent, and able advice have to shop around for a lawyer who is willing and able to do legal aid work. It is not access to justice when clients do not have the opportunity to engage sufficiently qualified, experienced, and able counsel. Counsel of choice is an important hallmark of our legal aid scheme, and by not addressing the issue of legal aid providers, the bill limits the choice of legal representation. It is not access to justice when one first has to jump through all the uncertainty of the eligibility rules that are contained in this bill.

While I talk about uncertainty I would just like to refer to some of the definitions in schedule 1 of the bill, which is to replace the current schedule 1 of the Legal Services Act, because I do not think those definitions do much to assist in the whole issue of access to justice. Forgive me if I am being a pedantic ex-lawyer, but there is a definition of “disposable capital” in clause 3, which states: “… that person’s total assets after deducting the amount of any debts secured against those assets”—which is fine—“and after deducting,—(a) if the person has an interest in a home, the amount of equity in the property set by regulations made under this Act:”.

I am not sure what “set by regulations made under this Act” means. This schedule is an addition to the principal Act, but surely equity is equity—that is, the value of the asset less the debt. How on earth can equity be some figure prescribed by regulations? Where we have equity in this bill, it is not set by a valuation, it is not set by the Government valuation less the mortgage, but it is set by regulations. What can we read into that? Is it that those regulations will set an absolute maximum, so that if one has an equity of, say, $50,000, one may be eligible for legal aid, but if one has an equity of $60,000—as set by regulations—one may not be eligible? It will be arbitrary, bearing absolutely no relation whatsoever at all to reality.

Then the bill talks about an allowance for “the amount of the contingent liabilities of the person that may mature within the next 6 months:”. So for any guarantees that may have been given—which are often upon demand, and we all know that “upon demand”, under the meaning in the chattels transfer legislation, is within 3 months—the amount of that guarantee will be deducted from the value of a person’s assets. Some guarantees, albeit unwisely, are for unlimited amounts, so those guarantees could reduce the assets of an applicant for legal aid down to zero. It is meaningless to have such an uncertain definition of disposable capital in the schedule of the Legal Services Amendment Bill (No 2).

Perhaps one of the other definitions in the schedule that I also take issue with is the definition in clause 4 of resources of partner or spouse. It states: “Any resources of a person’s spouse or partner”—which is fine—“must be treated as that person’s resources unless—(a) the person is living apart”—and that is OK—“from his or her spouse or partner; or (b) the person and his or her spouse or partner have contrary interests in the matter to which the proceedings relate; or (c) regulations … provide otherwise.” Again, what on earth will those regulations provide?

The partners and spouses either are living separate and apart or are not.

That brings me to the basis, I believe, of relationship property law, or matrimonial property law—whatever one wants to call it—which generally provides that partners and spouses can keep certain property separate, such as inheritances. As long as that property is kept separate and apart, and has not been intermingled in any way, then it is regarded as that person’s separate property. But the definition in the Legal Services Amendment Bill (No 2) overrides that basic premise.

As my friend Ms Wilkinson said, one of the key purposes of the Legal Services Act 2000 is to provide access to justice for people who have insufficient means to pay for legal services. But the effect of this bill means that we are not talking about access to justice but about a little bit of access to justice, or about some access to justice. Although the bill deals in a reasonably competent way with what could be called minor matters, it completely fails to address the real issues confronting the legal aid system in this country.

I do not intend during this address to repeat what the previous National speakers have said, but will simply endorse what they have said. Access to justice is impeded when the legal aid rates—particularly the criminal legal aid rates—are so paltry. I compare this mealy-mouthed approach to lawmaking exemplified by the Legal Services Amendment Bill (No 2) with what has been going on in England over the same period. It really is quite illustrating that the Labour Party’s brothers and sisters in New Labour in England have been prepared to bite the bullet.

There have been three reports in the last year that show the way for legal aid reform in this country. The first is dated 5 July 2005, in which the Department for Constitutional Affairs set down a long-term strategy for legal aid whereby lawyers, for example, have to bid for legal aid cases, and there is a very high-cost case review board. Those sorts of things will make legal aid more affordable. Then on 9 February 2006 a very important report called the Procurement of Criminal Defence Services: Market-based reform was published under the authorship of Lord Carter. I endorse that report, which I have read, and commend it to the Labour Party, because market-based reforms are not all right-wing madness. It has been endorsed by New Labour in England and will be implemented over a couple of years in the period leading up to 2009.

The Labour Party in England is prepared to sign up to fixed pricing for all criminal legal aid work, to a managed market, to awarding contracts to efficient and good-quality providers, and to managed price competition. These are not alien terms in England; these are the sorts of things this bill should be dealing with. Then, most recently, on 20 March 2006, a consultation paper on proposals for a national preferred supplier scheme was launched. The Legal Services Commission, the equivalent in England of the Legal Services Agency, will provide services only to preferred suppliers, who have to be of a certain standard. There will be simplified billing and claiming processes for preferred suppliers in order to reduce transaction costs on both sides, significantly reduced inspection and auditing, preferred supplier membership based on higher upfront entry criteria, a new relationship—and this is an important one—based on forging a genuine partnership with providers of legal aid services, and the lead responsibility for managing this partnership given to one of the Legal Services Commission’s relationship managers. Finally, the paper specifies that e-business will be used for all transactions between the agency and preferred suppliers so that the work is done more efficiently and quickly.

We know full well that throughout the Government leviathan in New Zealand, e-business is in many respects a pipe dream, because it is barely in place. The Ministry of Justice needs to get its act together in relation to e-business within the areas for which it has responsibility.

So the key point to make is that the Legal Services Amendment Bill (No 2) deals with some minor issues reasonably well but does not address the big issues. No one on this side of the Chamber debates that legal aid is incredibly important. No one debates that the cost of legal aid has to be very carefully managed, otherwise there will be a blowout. But there are some important access to justice issues that this bill should have addressed and has simply failed to address.

Once again we are talking about the title and commencement date of legislation. The bill in this case is the Legal Services Amendment Bill (No 2). The title relates to the Legal Services Act 2000, which is the principal Act, and to the amendments in this bill. As National members have so eloquently said in the debates on this legislation over the last week or so, we do not have any fundamental problem with legal aid. Our concerns relate to the ability for individuals who are in the most vulnerable state to get access to efficient and equitable legal aid so that they are represented to the level they should be in court proceedings.

One may ask why that is so important. It is important because people’s lives are at stake. These are people who are generally reliant on the Government to be involved at that stage in their lives. Normally they have come into turmoil, or something they had not anticipated has gone wrong, and they need to deal with it. A lot of the time we say that our welfare system will look after people in their time of need, but for some people such a situation will probably be their biggest time of need, because it is something they never saw coming. They may have got into a situation that was not right for them and did not know how to react, and now they have to face the consequences.

Legal services are important in that situation. This bill is an attempt to deal with that situation. However, it is an attempt that National sees some major holes in. The two biggest problems are, first, that the bill does not really deal with a framework for review of legal service payments. Those engaged in providing legal aid do not know when they will get a review of their fees, or the quantum of any review, and that potentially creates a situation whereby people will not want to engage in that work. The people who can assist those most in need of assistance are not willing to do so because potentially they will not get paid at the level they could enjoy doing other work. They also do not know how secure their work is.

That creates a lot of issues for the Government, which needs to provide those services. How do we provide a mechanism so that the providers of legal aid services are willing to do so? Probably the fundamental problem in this legislation is that there is no process there. It has been said only that there will be a review—that was said in this Chamber during one of the readings of the bill. There is no formal process; there is no certainty. Legal aid providers do not really know what their situation will be in the future.

💬 Dr Paul Hutchison: How many reviews have they had?

Well, there need to be more reviews. A review is an essential part of government, and this is one area that, quite obviously, could be reviewed. It would be interesting to see a review. Would anyone on the other side of the Chamber be able to review this area? That is the other question. No, I do not think they could. They might employ someone to review it and then pay some major fees to the public service or the private sector. Consultants would enjoy the review process. It could be like the campaign—we could get Treasury to review it. But then we could not tell anyone what Treasury said—we would have to keep it quiet. But there needs to be some kind of review, some kind of formal process, so that individuals who are representing people know the situation and know how they can get an equitable payment for their services.

Although this bill covers an area where there is no real debate amongst the political parties about the need to have legal aid, and the title of the Legal Services Amendment Bill (No 2) covers an area that there is no debate over, the issue is in regard to how that is made to happen. We do not see this bill achieving the goals of its stated intention. Clause 1, “Title”, mentions the Legal Services Amendment Act and the Legal Services Act 2000. To provide legal services one has to pay people. We do not see a payment mechanism in the bill to enable that to happen.

First of all, I have to say that it sounds a bit strange to hear members of the National Party speaking up for the rights of the poor and the oppressed, but, having made that comment, I shall move on to the matter of the title. I also heard those members talk about changing the title to “Legal Aid (Access to Justice) Bill”, which is a lovely title. When we look at this bill, along with some of the others, we see it is more like the “Legal Aid (Let’s Grease the Machine) Bill”. There are suggestions in other bills about getting rid of juries and just having judges, and about getting rid of lawyers and defendants and just having videos. This year we are trying to make the whole thing flow easier but, in fact, we are greasing the machine to put more people through, and they will all end up in jail. The jails are already full. Soon the rugby clubs will be full, and the vans parked outside Mount Eden Prison will be full. All those sorts of things are happening, yet no fundamental change is being made to the way in which we treat one another in society that could reduce the need for us to need any of that kind of stuff.

Legal aid is necessary—there is no question about that. I know that heaps and heaps of my whanaunga would already be in jail if it were not for legal aid. In fact, I had a phone call not an hour ago from one of my whānau who is to appear in court tomorrow and who is looking for a legal aid lawyer. But I do not know that more money, as has been suggested by the National Party, is the answer. All that will do is ramp up the cost. Lawyers will say that they charge so much, and then there will be a request for more. The amount of money can be reviewed every year, but that will not change the basic need of the people at the bottom.

I hear talk about lawyers of choice. As a person who has been in a situation where I needed legal aid—although I have never used it—and who has seen other people wanting legal aid, I can tell folks that people do not get to choose their lawyers. That is not how it works. A person will get whoever is silly enough to put up his or her hand. Most of those lawyers are the young ones, the bunny lawyers. Often they are the lawyers who are not particularly good at law. Then, of course, there are the conscience-driven ones—the good ones like Russell Fairbrother, and others. There are some good ones around. I throw in another name, Mr David Sayes, from Whangarei, who is a very good legal aid lawyer. But there are not a lot of them. I know for a fact that all the really good lawyers just turn those cases down, because there is not enough money in it.

So how does one get around the issue of money being the matter that determines whether one gets a good lawyer? There are other ways, and my suggestion is that everybody who holds a lawyer’s licence must agree to do a certain number of legal aid cases per year, so that there will be a quota system for all lawyers. I am talking about lawyers at the most basic level all the way up to the QCs, so that they all have to do at least some cases. Then it does not become a matter of money; it becomes a matter for all. I hear lawyers talking about the importance of public service—they do it for the public good, etc., etc. But when it comes right down to it, they run away from it; they do not do it. I am suggesting that instead of ramping up the money to pay for more so-called good lawyers, lawyers need to be in a quota system in terms of how many legal aid cases they do. I am not against annual reviews, but I just think that getting every lawyer into the game will make it a lot easier for people at the bottom to make the choice.

I shall give an example of a suck-arse lawyer—another lawyer from Whangarei. He was representing a 61-year-old kuia. It was the first charge she had ever had in her whole life, and he let her go to jail. There are bad lawyers. We need decent legal aid and decent lawyers.

I shall take a quick call on the title. At the end of the day New Zealand First will not be supporting any changes to the title. We do not see a need for that, but I would like to put on the record a couple of things. During the debate on the bill a lot of comments have focused on the Government’s inability to provide a mechanism whereby legal aid services can be reviewed and, what some people would term, more appropriate levels of remuneration paid to lawyers who undertake legal aid work.

That is interesting. Since we last debated the issue I have received some information in the mail and when I ponder those facts I find it strange that the National Party team of lawyers talks about the poor remuneration levels and lack of incentives for lawyers who engage in legal aid work these days. I point out that legal aid rates were increased by the New Zealand First - National coalition Government and by its Treasurer, the Rt Hon Winston Peters, in 1998. But in 1999, after National had tipped the coalition Government upside down, fired Winston Peters and seized control with Tau Hēnare, Tuku Morgan, Jack Elder, and Peter McCardle—the member Mr Bennett should listen to this—National lowered the legal aid rates. Why did not one honourable, distinguished National Party spokesperson tell us that fact? We could have put on the record of the House the fact that National overturned New Zealand First’s initiative to raise the level of legal aid in 1999, but instead lowered it, and did so at the same time that it cut the pension. Do members remember that?

So it is kind of mean-spirited of those members to come into the Chamber and campaign about the inadequacies of a bill when their own party of people like Maurice Williamson, Bill English, and others, all of whom sit here today, cut the levels. Now they have the audacity to sit here and criticise the Labour Government.

I go one step further and confirm what honourable members have been saying about the concern of a number of lawyers in the legal fraternity that it does not pay them to do legal aid work. In these days of MMP where we try to discuss things cross-party and make sensible balanced policies, maybe the previous speaker, Mr Hone Harawira, hit on a point. If the legal fraternity has such high ideals, perhaps we should assign people in the first, second, or maybe the fifth year of their practice to work on legal aid cases. Maybe it could be proposed that people who come out of university with massive debt might like to—after they have gained a few years’ experience and become somewhat competent—volunteer their time in the area of legal aid. I am waiting for the people who have argued the most for increasing the pay, to put forward suggestions such as those.

The National Party is quite right to express those concerns and New Zealand First acknowledges that. We acknowledge that we must ensure that justice is delivered to everyone, across the board, regardless of their socio-economic background and their access to good, competent, legal representation. The National Party is right to raise the issue, and I think we all acknowledge that we must consciously move towards addressing it. We must ensure that those who most need legal aid support, like people who are accused of doing something they did not do—indeed, MPs get hundreds of those letters across their desk in their time here—are able to get that legal representation. But let us also remember that New Zealand First did do something positive and raised the level of legal aid payment, but National in 1999—not Labour, not New Zealand First, not ACT, not the Alliance, not the Greens, not the Māori Party, not United Future—cut the level of legal aid payment. That should encourage some honourable members to stand up, fess up, own the problem, and accept where the problem lies. It does not lie on this side of the Chamber.

I think the member misses the point that is being made. He will be aware, of course, that the rates for Crown solicitors are considerably higher than those available for defence lawyers. It is on that basis that this side thinks there should be some fairness and equity. Yes, it is important that the Crown’s case is prosecuted, and prosecuted well, but Crown lawyers are basically sitting within the framework of a huge bureaucracy. They do not necessarily have to worry about the costs of the bureaucracy, or about the ongoing costs to their particular practice, as private lawyers do. So the argument for the Government promptly reviewing the rates available for defence lawyers is basically around that point—fairness in the system. I do acknowledge what the member says. He does make the point that we need to be constantly on watch to make sure that the rates are at a sufficient level to ensure that those who ought to get legal aid, and who deserve legal aid, are not barred by the fact that there are lower rates for defence lawyers compared with rates for those acting for the Crown.

As National members have made very clear, we think the Government has missed an opportunity here to properly review the legal aid services framework. The points raised by Hone Harawira are, I think, very, very important. He comes from a background in which he has definitely worked at the coalface with whānau—Māori and others—and I think the suggestions he makes are worthwhile. I suppose it would be great if we could all agree to a system whereby we say to the profession at large that we expect each and every one of those who practise to take a certain number of legal aid cases each year. I do not think it is practical, partly for the reason that I referred to a couple of minutes ago, which is that our top lawyers in the country come at a price. That price, in the end, is reflected in all of the costs that are inherent in their businesses—in running competent, professional legal practices. The value of Hone’s contribution—and it should be a lesson to the Government—was that he showed that this was an opportunity to look properly at the framework for legal aid, and to look properly at eligibility issues.

The other area I mention tonight that really has not been addressed—and I am sure that the whole Committee knows and agrees—is the issue of rorting in the system. Let us think about that. That issue has not been addressed, so the minor good that is being introduced in this bill will possibly be lost when, indeed, thousands of dollars are run out of the system because of rorting. It is a great shame that the Government did not address that issue.

I see that the Minister in charge of the bill, Mark Burton, has returned to the chair. National members would have appreciated his assistance this afternoon in taking some calls to answer various issues that were raised on the transitional matters and on the schedules. Generally, it would have been worthwhile to have had his input. It was not there. As a Minister without a legal background, it may be that he would have benefited from the contributions made—particularly those made by members of the National team who have recently come from practice. We have a few of those, and it is a shame that the issues raised by them were not answered.

In terms of the title itself, the bill should really have been called the “Legal Services (Minor Amendments) Amendment Bill”. As my colleague Chris Finlayson said, in terms of addressing some minor issues the bill does reasonably well, but on the whole we have missed a great chance to deal with more substantive issues.