Criminal Bar Association of New Zealand Incorporated v the Attorney-General

JurisdictionNew Zealand
CourtHigh Court
JudgeSimonfrance J
Judgment Date31 August 2012
Neutral Citation[2012] NZHC 1572
Docket NumberCIV 2012-404-00992
Date31 August 2012

[2012] NZHC 1572

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

CIV 2012-404-00992

Under the Legal Services Act 2011 and the Judicature Amendment Act 1972, the Declaratory Judgments Act 1908 and/or Parts 18 and 30 of the High Court Rules

In the Matter of certain actions and proposed actions of the New Zealand Cabinet, the Minister of Justice, the Ministry of Justice, the Secretary for Justice and the Legal Services Commissioner, including past, proposed and purported exercises of statutory power under the Legal Services Act 2011 by the Secretary for Justice and the Legal Services Commissioner

Between
Criminal Bar Association of New Zealand Incorporated
Plaintiff
and
The Attorney-General
First Defendant

and

Stuart White
Second Defendant
Counsel:

R E Harrison QC, G M Illingworth QC and K H Cooke for Plaintiffs

K L Clark QC, T Warburton and P D Marshall for Defendants

Application for judicial review of a decision of the Secretary of Justice to introduce a fixed fee payment system for criminal legal aid providers — applicant sought order quashing the new system as being inconsistent with the Legal Services Act 2011 and therefore unlawful — whether it was permissible for the Secretary to introduce a fixed fee payment system for providers of criminal legal aid — if fixed fees were permissible, were the reasons to implement such a scheme lawful — whether the scheme was inconsistent with the New Zealand Bill of Rights Act 1990.

Held: The proposition that payment must only be on an hourly rate basis was not correct. Section 23(2) LSA provided that a maximum grant may be expressed in any way. There was no reason to read s23 LSA down and require only time based systems. A fixed fee did precude the capacity of a grantee to seek review under s90 LSA (aided person may request examination of cost of services), but this power of review should not dictate the method of calculating payment. The provision still had a purpose as it still applied to refusals to amend, and to the claims in complex and high cost cases.

The more difficult issue was whether the Secretary or the Commissioner should set the rates. While the LSA referred to the Commissioner setting a maximum grant, the Secretary's act was permitted. It was arguable that the Commissioner still played a role in all maximum grants. For the bulk of cases he applied the fixed fee, rather than by transferring the case to another category. While he did not set the quantum of the fee he did decide whether the fixed fee would be the maximum fee. However, the reality was that the fixed fee was set by default, and absent an amendment application, the Commissioner was unlikely to actually consider whether it should apply. He had the capacity to fix a different maximum grant if circumstances warranted that.

Section 99 LSA placed the task of assessing a claim on the Commissioner. The grounds for deferring a claim included whether the claim or part of the claim appeared excessive in light of the Secretary's standard rates of payment. The section expressly provided that the Secretary would set rates for payment. There was reason to read that as not including fixed fees. The LSA also contemplated that limits could exist on the Commissioner's discretion in relation to maximum grants. Under s144 LSA (regulations) the Governor-General could make regulations prescribing a method or methods for calculating what maximum grant, if any, should be set under a grant of legal aid.

While the Secretary had to act within the limits of the power conferred by the LSA and consistently with its purposes, it would be surprising if the establishment of the scheme was undertaken by the Secretary autonomously and independent of government policy. When regard was had to both the fact that legal aid was subject to normal budgetary constraints, and to the broad language of s68 LSA (functions of secretary), it was the Secretary's task to establish the legal aid system and that task included the ability to control expenditure and set fees. The LSA did not intend to and did not require the Secretary to act independently of government policy. Since the Secretary was properly required to implement government policy, the claims of illegality based on the Cabinet decisions failed.

Although the policy may have been motivated by a desire to achieve ten per cent savings, it was not inherently inconsistent with the terms in which the power had been conferred. It was permissible to have regard to the overall cost of the scheme. To have as a purpose the reduction of the existing overall cost was not necessarily inconsistent with a statutory purpose of high-quality legal services. There was nothing to say conceptually that one could not achieve the same or a better outcome for the same or less money. Section 3 LSA (purpose — to promote access to justice by establishing a system that provides legal services to people in the most effective and efficient manner) could not be ignored and efficiency properly incorporated considerations of costs.

The scheme was not inconsistent with the NZBORA. Regulations prescribing the levels of experience needed by lawyers in order to do legal aid work on different types of cases had been passed. The promulgated scheme included quality assurance requirements, auditing requirements, and identified remuneration rates and there was scope for the Commissioner to adopt a payment method other than the fixed fee.

The LSA did not impose any statutory obligation to consult and there was no breach. The statutory scheme was not undermined by appointing a Legal Services Commissioner, and at the same time delegating to him many of the functions of the Secretary. The LSA required the Commissioner to be an employee of the Ministry and it required the Commissioner to act under the direction of the Secretary and the Minister other than in the conduct of the independent functions. The LSA also contemplated that the Commissioner would have a dual role that necessitated both acting under direction and acting independently.

The fact that a case was initially allocated to the fixed fee category by default was not incompatible with s16(2) LSA (decision on application for legal aid), which provided that the Commissioner may specify a maximum grant. The statutory statement that the Commission “may” set a maximum grant could be read permissively as simply meaning that the Commission was allowed to set alternative payment methods for complex cases and high cost cases, as well as having the ability to amend the size of any additional fees.

Given the fixed fees system was called on an “overs and unders” concept, the test was designed to emphasise that the fact that a case was an under would not of itself make the fixed fee inadequate. Inadequacy of the fee must refer to a case where the amount of work involved clearly fell outside the reasonable range contemplated by an overs and unders regime. The test was a matter for the Commissioner who had to assess whether the fee was sufficient to ensure an accused person obtained appropriate legal services. Opportunities for departure included complex cases; the number of accused; cases involving vulnerable persons, those affected by mental health issues, and those needing special assistance such as interpreters and high cost cases defined not only by the likely cost, but alternatively by a particular charge. It was too early to say whether those categories would be inadequate to identify accused in need of more assistance than that contemplated by the fixed fee system.

An irrational method had not been used to set the fixed fee nor had it been shown that there would not be “overs”. It seemed inevitable that there must be some. The possibility of an over in this sort of scenario must be high. The concept of averaging meant there should be overs. It could not be said at this point that the outcome was that there would be none.

It was not the role of the Court on a judicial review to determine if lawyers were being paid enough for the legal aid work they did. It was not a legal question. It would be a legal issue if the rates being offered meant that lawyers of the necessary quality were not available to do the work. But that was not the case; indeed at this point the opposite was true.

The statutory task of procuring high-quality legal aid services rested with the Secretary. In carrying out that task he was not required to act independently of government policy. He was entitled to set the overall rates, and the way he had done this had not improperly interfered with the independent functions of the Commissioner. The Secretary was required to establish a scheme that delivered high-quality legal services and it was not possible to say that the scheme he had introduced was incapable of doing that.

Application dismissed.

JUDGMENT OF Simonfrance J

Introduction
1

The method by which lawyers have been paid for providing legal aid services to those charged with criminal offending has changed several times over the years. Initially, the Offenders Legal Aid Act 1954 placed the responsibility for deciding if there would be a grant of aid with the Court. Under that scheme, the Law Society approved the lawyers who could do such work, and the rate of payment was set out in a schedule to the Act. 1

2

More recently there was the Legal Services Act 1991, which was an attempt to control costs by a move towards introducing fixed amounts for some services. That process was under the control of the Legal Services Board. Then, the Legal Services Act 2000 placed all decision making in the hands of a newly created Legal Services Agency. That scheme introduced the concept of a maximum grant, whereby lawyers were allocated to an hourly rate reflective of their experience, and guideline hours were prescribed for various types of proceeding. A claim could not exceed the guideline hours unless an amendment to a grant was sought and approved.

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