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

• Jurisdiction: New Zealand
• Judge: Wild J
• Judgment Date: 24 May 2013
• Neutral Citation: [2013] NZCA 176
• Docket Number: CA606/2012
• Court: Court of Appeal
• Date: 24 May 2013

Between

The Criminal Bar Association of New Zealand Incorporated

Appellant

and

The Attorney-General

First Respondent

and

Stuart White

Second Respondent

[2013] NZCA 176

Court:

Randerson, Stevens and Wild JJ

CA606/2012

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal from High Court's dismissal of challenges to the introduction of a new fixed fees regime for criminal legal aid — regime was introduced to reduce Government costs and comprised of fixed fees with an ability to seek amendment for complex cases — regime was developed and implemented by second respondent (General Manager of the Legal Services Agency) exercising powers delegated by Secretary for Justice — whether cost-cutting was a proper purpose under Legal Services Act 2011 (“LSA”) (purpose) — whether the Fixed Fee Policy (FFP) was inconsistent with Legal Services Commissioner's independent functions under the LSA — whether FFP unreasonably fettered the Commissioner's discretion under the LSA — whether the delegation of the Secretary's powers under the LSA Act to the second respondent when he was also the Commissioner was a valid exercise of the Secretary's powers of delegation — whether the FFP was unreasonable — whether failure to take into account rights under the New Zealand Bill of Rights Act 1990 when developing FFP made it unlawful — whether the decision to implement the FFP was unlawful, as it gave effect to a 10 per cent reduction in fees directed by Cabinet.

Counsel:

R E Harrison QC, G M Illingworth QC and K H Cook for Appellant

C R Gwyn, T J Warburton and D Perkins for Respondents

A The appeal is allowed, to the extent that we hold:

(a) The Secretary for Justice acted unlawfully in implementing the Criminal Fixed Fee and Complex Cases Policy, in that it is inconsistent with the Legal Services Commissioner's independent functions under the Legal Services Act 2011.

(b) The Criminal Fixed Fee and Complex Cases Policy and Procedures is also unlawful, in that it unreasonably fetters the discretions imposed in the Legal Services Commissioner by ss 16, 23 and 28 of the Legal Services Act 2011.

B We make declarations accordingly.

C Any decision on further relief is reserved, for application by way of memorandum if sought.

D The appeal is otherwise dismissed. E The costs of the appeal are reserved.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Wild J)

Table of Contents

	Para No
Introduction	[1]
Background
Concern over the rising cost of legal aid	[7]
Government initiates a fundamental review of legal aid	[8]
Bazley Report	[9]
Cabinet decisions following the Bazley Report	[14]
Cabinet approves the fixed fee regime and high cost case management	[21]
Development and implementation of the Fixed Fee Policy	[23]
The 2011 Act	[30]
The questions on appeal	[38]
Question 1: Is the purpose of cost-cutting which supported the introduction of the 2011 Act a proper purpose of that Act?
Relevant provisions	[39]
The Judge's view	[40]
Appellant's argument	[42]
Respondents' response	[45]
Our views and decision	[51]
Question 2: Is the Fixed Fee Policy inconsistent with the 2011 Act, in particular the Commissioner's independent functions under the Act?
The Fixed Fee Policy	[64]
The Judge's reasoning	[76]
Respondents' response	[86]
Our views and decision	[87]
Question 3: Does the Fixed Fee Policy unreasonably fetter the Commissioner's discretion under the 2011 Act?
The Judge's reasoning	[105]
Appellant's argument	[115]
Respondents' response	[117]
Our views and decision	[118]
Question 4: Was the delegation of the Secretary's powers under the 2011 Act to Mr White when he was also the Commissioner a valid exercise of the Secretary's powers of delegation?
Appellant's argument	[127]
Our views and decision	[131]
Consideration of the remaining questions	[135]
Question 5: Is the Fixed Fee Policy unreasonable?
Unreasonableness	[136]
The Judge's view	[137]
Appellant's argument	[143]
Respondents' response	[149]
Our views and decision	[152]
Question 6: Is the Fixed Fee Policy unlawful, in that the Secretary when developing the Policy failed to take into account rights under the New Zealand Bill of Rights Act 1990 (BORA)?
The Judge's view	[157]
The opposing arguments	[159]
Our views and decision	[161]
Question 7: Was the Secretary's decision to implement the Fixed Fee Policy unlawful, in that it gave effect to the 10 per cent reduction in fees directed by Cabinet?
The argument in the High Court	[170]
The Judge's view	[171]
Appellant's argument	[175]
Respondents' response	[180]
Our views and decision	[185]
Result	[204]

Introduction

1 In March 2012, the Government introduced a new framework for criminal legal aid. It comprises fixed fees with an ability to seek amendment of those fees for complex cases. The new fees cut the remuneration of lawyers providing criminal legal aid services by an average 10 per cent.

2 The appellant, the Criminal Bar Association, represents lawyers practising criminal law in New Zealand. Most of its members are involved in criminal legal aid work. The appellant is understandably concerned at the cut in remuneration, particularly as remuneration rates for criminal legal aid work have been increased only once since 1996. That was in 2008, an 8.5 per cent increase.

3 The appellant applied to the High Court for judicial review of several of the key decisions involved in the new fees framework. First, it challenged the delegation of powers by the Secretary for Justice (the Secretary) to the second respondent, Mr Stuart White. The new fixed fees ‘regime’ was developed and implemented by Mr White, exercising those delegated powers. Second, it challenged Mr White's decision, also exercising those delegated powers, to introduce the fixed fees ‘regime’. Third, it challenged the ‘regime’ itself. Fourth, it challenged the policy applying to complex cases – the policy for amendment of the fixed fee. The ‘regime’ and ‘policy’ are incorporated in the Criminal Fixed Fee and Complex Cases Policy and Procedures, promulgated with amendments in June 2012. In this judgment, we will refer to this as the Fixed Fee Policy, or simply the Policy.

4 The appellant's judicial review application was heard by Simon France J. In a judgment he delivered on 31 August 2012, the Judge dismissed all of the appellant's challenges. 1

5 The appellant appeals against the whole of Simon France J's judgment, pursuing on appeal all but one of the challenges the Judge dismissed. 2

6 In [38] below we set out the seven questions which this appeal requires us to answer. They are best understood if we first provide some background.

Background

Concern over the rising cost of legal aid

7 In March 2007 Government decisions expanding the eligibility for legal aid were implemented. The resulting increase in legal aid expenditure was greater than anticipated. For the year ended March 2010 it was $172 million, a 55 per cent increase on the $111 million cost for the March 2007 year. Criminal legal aid accounted for 45 per cent of the expenditure — $78 million in the March 2010 year. 3

Government initiates a fundamental review of legal aid

8 Government considered that it could not sustain that rising level of expenditure. In March 2009 Cabinet agreed with the recommendation of the Minister of Justice that a fundamental review of the legal aid system be undertaken. Cabinet agreed also with the terms of reference recommended by the Minister. These included: 4

• 1. The purpose of this review is to take a first principles approach to reviewing New Zealand's legal aid system to ensure it:

  • • delivers legal services to those who need them most

  • • manages costs effectively and is sustainable

  • • complements efforts to maintain and improve the effective operation of the justice system, especially the court system

  • • is consistent with principles of natural justice and New Zealand's international obligations

  • • is based on objectives of fairness, efficiency, effectiveness, and quality

  • • provides value for money

  • • is simple and low cost to administer.

• 2. The review must align with Government priorities and take into account the projected fiscal environment of future years. In this respect, a key focus is on developing alternative approaches to manage or reduce costs. Existing models of public and private service provision (including other forms of social assistance) should be considered.

Bazley Report

9 Dame Margaret Bazley was appointed to chair the review. She submitted her final report and recommendations in November 2009. The report is entitled “Transforming the Legal Aid System” (the Bazley Report). 5

10 Amongst the failings of the then current legal aid system identified in the Bazley Report were the inflexible procurement provisions in the Legal Services Act 2000 (the 2000 Act) which prevented the Legal Services Agency (the LSA) procuring services in the most efficient way possible. 6

11 The Bazley Report expressed the view that the existing funding on a “fee for service” basis did not encourage lawyers to be efficient or innovative, including by resolving a case in the most effective way, was open to abuse, and carried significant administration costs. 7

12 The recommendations in the Bazley Report included: 8

• (a) a mix of publicly and privately provided services; and

• (b) greater flexibility in the procurement of legal services: the funding model that ensured best value for taxpayers' money should be used.

13 The section of the Bazley Report headed ‘Procurement of Legal Aid Services’ included this...