Debate on Crown Entities, Public Organisations,and State Enterprises — Legal Services Agency

There is often a lot of hyperbole in this House, but I think it is fair to say—and it is certainly not hyperbole to do so—that the Justice and Electoral Committee’s report on the Legal Services Agency is very serious indeed, and that the agency is simply not working. Its financial review revealed a number of serious problems. I will run through some of the major ones, then focus on one. The first problem is the concern expressed by the committee that legal aid forms are if not unintelligible, then certainly far too prolix. There are some real concerns about the supply and quality of legal aid providers. There are some very serious concerns about the closure of community law centres. There are some concerns about the commitment of the agency to the Treaty of Waitangi and the work it is doing there. There are some very real concerns about the problem I intend to focus some time on: the assessment of cases.

In the last year a number of totally unmerited cases have caused a great deal of harm and concern to certain defendants. During the course of the hearing of the select committee, I mentioned one case that had been commenced against an elderly couple. The wife had multiple sclerosis. The husband had given up work in 2002 to help his wife, and they were sued. What is more, the plaintiff knew about the couple’s situation. The plaintiff was granted legal aid and commenced what could be described only as a hare-brained proceeding. It was struck out in the District Court, and Judge Crosbie said the case was so untenable that it could not possibly succeed. He said he struggled to see how any self-respecting lawyer could plead such junk against the defendants. He said the case lacked common sense and balance. Then the case went to the High Court on appeal—again funded by legal aid—and the High Court judge was of the same view. He said the plaintiff’s claim to a constructive trust in respect of the property owned by the second respondents had no merit whatsoever.

The claim had no merit whatsoever, so at the end of it there was an application under section 41 of the Legal Services Act that the successful opponents of the aided person be granted their costs by the Legal Services Agency. That application was filed in 2005, and it was dealt with. Unfortunately, it took 2 years for the matter to be considered by the agency, and it was concluded by the agency only after a hearing of the select committee into the agency. There is a happy ending to this sorry tale. In the last few days the agency has provided payment of the full amount claimed by the second respondents in that case. They were paid the full amount, but there was no apology, and no reasons were given by the agency.

The fact of the matter is that the agency was wrong to fund that particular plaintiff. The agency did not want to face a full review, as that would have resulted in the decision being reduced to writing and being available as a precedent for other claimants. The agency had a particularly hard time at the select committee hearing. It had no grounds not to pay the second respondents, and paying them was the right thing to do. So after 2 years, during which time the lady concerned had become quite ill as a result of her problems with multiple sclerosis, I am pleased to say that the agency did the right thing. Just in the last few days I have learned that it has paid the respondents in full.

That is one case where the agency did the right thing. What about the other cases, where people have had to confront mad legal aid - funded cases and expend huge sums of money? These are very serious matters. These are questions of justice, and something needs to be done to make sure that the agency has people who are capable of analysing cases at the very start, so that some of those cases are not legally aided. I suggest that the Minister read paragraph 10 of the select committee’s report carefully, because it said the committee was very concerned about this matter, and added: “Such cases are expensive and time-consuming for the legal aid system, the courts, and opposing parties.” I would like the Minister to explain what he proposes to do about this particular matter, because these are not anything other than serious questions of justice.

In all litigation there are three interests at stake. There is the undoubted right of the plaintiff to commence his or her proceeding, and, if indigent, he or she is entitled, subject to the criteria of the Act, to be legally aided. But there are other rights at stake, as well. There is the public interest in the swift and economical conduct of litigation, particularly where, as in the case I have mentioned, a person is being assisted to conduct that litigation because he or she qualifies for legal aid. The other interest is the right of the defendant. If someone is legally aided, it certainly behoves the lawyer for that person to conduct sensible litigation expeditiously and economically. It is a matter of grave concern—and it certainly was to the select committee—that that kind of abuse occurs.

So I think some questions need to be answered by the Minister. He should look at paragraph 26 of the select committee’s report, and I invite his comment on it. Has he ever seen an agency, whilst he has been a Minister—or, indeed, since he has been in this House—receive such a caning? The report states: “We consider that the Legal Services Agency needs to improve its performance significantly in a number of key areas. We are concerned that several issues we raise in this report suggest that the agency is not performing adequately. We are particularly concerned that many of these issues appear to be ongoing.” The committee has sent a warning to the agency that: “We intend to monitor this situation closely.”

This afternoon we dealt with three bills, and comments were made by Labour members about the cooperative nature of the work conducted by the Justice and Electoral Committee. That was quite right, not only in relation to those three bills, but also in relation to this financial review. I think it is fair to say that the Labour members on the committee were also concerned about the quality of this particular agency. Members will note that there is no dissenting report. These are matters of justice, and the issue comes back to what we said when we were debating the amendment legislation last year: eligibility for legal aid has been widened by this Government, so that over a million people are now eligible in this country. But the agency has not delivered. It is not delivering. It is too bureaucratic, it buries people in paper and in process, it does not cut to the chase, and it does not provide a very good service at all. It is underfunded, which obviously cannot help the agency. I do understand, in fairness to the agency, that it is underfunded and has to deal with minimal funds to the best extent that it can.

But it is not good enough for an agency such as this to have a report of such seriousness written about it. I went through the other reports, and I did not see another review of a Crown entity that was as critical as the select committee’s report on this agency. So the response of the Minister in the chair, the Hon Mark Burton, should be forthcoming on that. These are serious matters of justice and competency, and I fear that unless a strong lead is taken by the Minister, this organisation will continue to drift and a similar sort of financial review will be conducted next year. I warn the Minister that, as I said a few minutes ago, the select committee is seriously concerned about this body. It intends to monitor the situation very closely. But no organisation and no Minister responsible for an organisation such as this can be proud of a report that repeats, almost like a litany, that it is concerned about financial management, legal aid forms, monitoring, the availability of legal aid in rural areas, the closure of community law centres, and legal aid providers, and that it is very concerned about unmeritorious cases. What are the answers?

I am pleased to take a call in response. Firstly, I acknowledge one point that the member who has just resumed his seat, Christopher Finlayson, made. I think the Justice and Electoral Committee should be acknowledged in this Chamber as a committee that takes its work seriously. Certainly, all the evidence I have seen suggests, as the member said, that it is a committee where members, regardless of party, take the job seriously and work collegially. Obviously, there are differences from time to time, but I think they do an important job for this Parliament, and I want to acknowledge that.

The member who has resumed his seat raises some important issues, and I am not for a moment going to suggest that this agency is perfect in its performance. Clearly, it is not. But, equally, I want to say that it is well and good to take a particular case—the member spent about a third of his time on one particular case—in which, indeed, there was judicial criticism. Such criticism is relatively rare. It happens maybe once a year in an agency that has to look after thousands upon thousands of cases a year. It is one thing to highlight a particular problem with a particular case; it is another thing entirely to run and operate an organisation effectively that deals with many thousands of cases and applications every year.

There are a number of areas in which it is clear that there needs to be improvement. There will be, and are, clear expectations in terms of the agency’s coming year and the focus for that year in terms of key service delivery issues. There are a number of areas that clearly have to be enhanced, where organisational capability needs to be improved or enhanced in some respect. A good example of that is the strengthening in management of the agency’s information technology systems. I think the functionality of that, and its ability to meet some of the workload issues that have been highlighted concerning the increasing volume and complexity in those areas, is critical to doing that effectively and well.

The issues raised around continuing to monitor the quality, supply, and security of supply of legal aid providers are important. I have to say that the facts across the country are not as we often hear in this House, but there is no doubt that from time to time there are areas in which supply is difficult. In any specialist service provision, in a country like New Zealand that has 4 and a bit million people spread over a large land mass, there will always be problems of supply, whether we are talking about Government agencies or other professional services. That is simply a fact of life, living in the sort of country we do. The critical thing is that this agency must monitor and have the willingness and capacity to respond when issues are raised with it, and that is precisely what our expectation is.

There are areas where re-establishing an appropriate level of community legal services needs to be addressed in the coming year. I emphasise Northland and Canterbury in particular, following the termination of provider contracts. Such terminations are difficult issues, but I would ask the member who has resumed his seat whether he would have the agency simply ignore concerns and problems when they arise. That is not an option when delivery of quality service has to be maintained. But the challenge has to be risen to, in terms of re-establishing an appropriate level of community legal aid services, particularly in Northland and Canterbury. That challenge has been laid very clearly before the agency for the coming year. Again, part of the streamlining and improving of the service is the project to modernise legal aid management, granting, and information technology systems. Further work is being done now on the improvement of some of the paper systems, which the member referred to.

I acknowledge, however, that the agency has had a lot of new work to do in the last year, and I think it has certainly done well with a great deal of that. It is a year that has been dominated by the implementation of the new Act, and that has seen a significant increase in the number of those New Zealanders on low and modest incomes who now have eligibility. Several hundred thousand additional people have eligibility for legal aid who did not before. I make no apology, and this Government will make no apology, for making our first priority extending the access to legal aid service to low-income New Zealanders. That is what we have done.

I am not suggesting for a moment that that is all we need to do. Of course it is not. But that was the first priority. I think it is one that we stand by, because, frankly, it really goes to the sort of debate we all saw in 2005 around things like tax cuts. There are those in this House who would say that we should have the sorts of tax cuts that would deliver up to people in this House $100, $200, or $250 a week, and to low-income New Zealanders $5, $8, or $10 a week. This Government says that those who should be targeted should get the first access to tax relief, and that is what we have done. Unfortunately for members in this House, they got nothing. But the consequence of that is that modest-income families raising children are getting $100, $200, or, in some cases, $300 a fortnight in tax relief. That is about setting priorities. It is the same philosophy that drove the decision to make low and modest income New Zealanders’ access to legal aid service the first priority.

So are there challenges in the year ahead? Indeed there are. Quite properly, some of those issues have been raised by the select committee. But has this agency also done a great deal of good work in the last year? Yes, it has, and that too should be acknowledged.

Report noted.

Police Complaints Authority