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

• Jurisdiction: New Zealand
• Judge: Simonfrance J
• Judgment Date: 31 August 2012
• Neutral Citation: [2012] NZHC 1572
• Docket Number: CIV 2012-404-00992
• Court: High Court
• Date: 31 August 2012

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

[2012] NZHC 1572

CIV 2012-404-00992

IN THE HIGH COURT OF NEW ZEALAND

WELLINGTON REGISTRY

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.

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

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.

3 In 2009, seemingly in response to concerns over the increasing cost of legal aid and over the quality of work being provided by some legal aid lawyers, the government of the day commissioned Dame Margaret Bazley to review the system. Her report attracted much publicity. There can be no doubt that many aspects of the latest legal aid statute, the Legal Services Act 2011 (“the Act”), reflect recommendations made in the Report.

4 One of the features of the new Act is the abolition of the Legal Services Agency, and the transfer of responsibility for administering legal aid to the Secretary for Justice (“the Secretary”). 2 Section 68 of the Act requires the Secretary:

to establish, maintain, and purchase high-quality legal services in accordance with this Act.

5 The Secretary's decisions pursuant to this statutory function, and the new scheme he has implemented for how criminal legal aid work will be paid, are the focus of these proceedings. Particularly challenged is the decision to introduce a schedule of fixed fees. It is anticipated that 95 per cent of criminal legal aid cases will now be remunerated by payment of a predetermined fixed fee.

6 The plaintiff is an organisation to which many providers of criminal aid work belong. It brings these judicial review proceedings and seeks an order quashing the new payment system as being inconsistent with the relevant statutory scheme and therefore unlawful. There are various strands to the challenge, but the case can be captured by four inquiries.

7 First, was it permissible for the Secretary for Justice to introduce a fixed fee payment system for providers of criminal legal aid? This challenge is, in part, based on various provisions within the Legal Services Act 2011 which are said to be incompatible with such a system. Primarily, however, the focus is on the newly created office of Legal Services Commissioner. That person is charged with responsibility for determining whether someone obtains a grant of aid, and, it is said, determining how much that grant is for. The Act expressly provides for independence in these decisions, and it is said a fixed fee scheme improperly interferes with the Commissioner's independent statutory function.

8 Second, if fixed fees are permissible, were the reasons behind the Secretary's decision to implement such a scheme lawful? Here it is contended that the Secretary wrongly considered himself bound by prior Cabinet decisions to introduce a fixed fee system. This is said to be unlawful because the Secretary is required to act independently of government policy when carrying out this statutory function.

9 Further, in addition to considering himself obligated to introduce a fixed fee system, the Secretary also considered that the same Cabinet decisions required him to achieve ten per cent savings. It is contended in relation to this that, for the same reasons as advanced in relation to the fixed fee model, the Secretary was wrong to consider himself bound to follow Cabinet's direction. Further, it is submitted that in any event the Cabinet decision did not require a ten per cent saving, and the Secretary has therefore misdirected himself, and undertaken the whole exercise on an incorrect premise. Finally, it is submitted that it was impermissible for the Secretary to have regard at all to budgetary constraints because they are incompatible with the statutory purposes.

10 The third question, if fixed fees are permissible and have been introduced for lawful reasons, is whether the process followed by the Secretary was lawful. Here, the focus is on whether there was adequate consultation, and whether it was lawful for the Secretary to delegate his functions to the same person who was appointed the Legal Services Commissioner. The contention here is that placing both functions with the same person impermissibly undermined the plain statutory aim of separation of functions.

11 The fourth question focuses on whether the particular scheme that has been introduced, if conceptually permissible, is a lawful exercise of the Secretary's statutory function. It is alleged that the scheme impermissibly fetters the Commissioner in carrying out his independent functions in that it does not allow sufficient scope to depart from the fixed fee in appropriate cases. Further, it is said that the scheme is reviewably unreasonable — it cannot promote the statutory purposes, it is premised on flawed theories that the cost savings to the practitioner will offset the ten per cent cuts to an already inadequate remuneration rate, it is premised on a flawed theory that there will be occasions of overpayment whereas in reality all cases are already “unders”, and its long term effects will be to bring about the demise of the independent criminal bar.

How a lawyer is now paid for criminal legal aid work

12 The new criminal legal aid system is a combination of statutory provisions, and the regime introduced by the Secretary. It begins, as one would expect, with an accused person applying for a grant of aid. Section 71(1)(a) of the Act prescribes that it is the task of the Legal Services Commissioner to decide the application. In doing so, he 3 must act independently from the Secretary.

13 If aid is granted, a lawyer will be allocated. Proceedings are divided into four categories:

For the categories 1 and 2, a lawyer will be appointed on a rotation basis. 4 For categories 3 and 4, lawyer of choice is available.

• (a) PC1, being Judge alone cases;

• (b) PC2, being jury trials where the highest maximum penalty is ten years;

• (c) PC3, being jury trials where there is a finite maximum penalty greater than ten years;

• (d) PC4, being jury trials where the maximum penalty is life imprisonment, or the Crown has indicated it will seek preventive detention.

14 Remuneration will initially always be by way of fixed fee, except for a small group of serious offences that always fall into what is known as the high cost category, and concerning which fixed fees do not apply. For fixed fee cases, there are two fixed fees payable —

• (a) the base fixed fee which covers taking instructions, trial preparation and defending the charge; and potentially

• (b) specific additional fees applicable to certain applications, where such applications have been made — e.g. bail, name suppression, and other interlocutory applications. Also, additional hearing time is payable where the attendances exceed a stated number of hours.

15 Set out below is an example of a fixed fee schedule. It is the schedule applicable to category one cases, which are Judge alone cases. Because the range of matters which may be presided over by a Judge is broad, there are three different levels of fee within category one (A, B and C below): 5

Disposed at Defended Hearing [summary charge]
Activity	A	B	C	Tasks covered by Fixed Fee
All activities up to completion of Defended Hearing (including sentencing)	$480	$550	$580	For: • Taking instructions, attending the client • Receiving and reviewing disclosure (may include preparation of disclosure package — ie, disclosure by defendant) • Identifying legal and factual issues • Undertaking research • Engaging in charge resolution/negoti ati on • Attending to unopposed bail, name suppression, variation, interlocutories etc • Attending...