Legal Services Bill

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 $985,000 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.

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 158,000 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.

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.

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.