Legal Services Bill

  • enacted

Commentary

Recommendation

The Justice and Electoral Committee has examined the Legal Services Bill and recommends that it be passed with the amendments shown.

Introduction

The Legal Services Bill aims to reform the legal aid system and to replace the Legal Services Act 2000. The bill seeks to address the issues raised in Dame Margaret Bazley’s 2009 review of the legal aid system, and intends to improve both the quality and the efficiency of the system. Key features of the bill include

  • disestablishing the Legal Services Agency

  • transferring the administration of legal aid services to the Ministry of Justice

  • creating a new independent statutory officer to undertake those functions that need independence

  • replacing the Legal Aid Review Panel with a new Legal Aid Tribunal

  • improving administrative, quality assurance, performance management, and application assessment processes

  • clarifying that legal aid can be obtained for Waitangi Tribunal proceedings, but not for negotiating settlements with the Crown.

This commentary covers the significant amendments that we recommend to the bill; it does not cover minor or technical amendments.

Review Authority

We recommend amending clause 82(1) to make it clear that the Review Authority would be authorised to review all provider approval decisions made by the Secretary for Justice. Given that judicial review of a decision cannot be sought until the authority has reviewed the matter, we believe it is important for the clause to state explicitly the scope of appeals to the authority that would be permissible.

We also recommend inserting new clause 82(3), which would allow the authority to accept a late application for the reconsideration of a decision, up to three months after the person concerned has been notified of the decision. This provision would apply only if there were exceptional circumstances which prevented the application being made in the initial 20-working-day review application period. This would bring the authority’s late application provisions into line with other review application provisions recommended in this report.

We recommend amending clause 85(1) to make it clear that the role of the authority is to review all decisions made by the Secretary that relate to the approval of providers. Concern was raised that clause 85(1) in the bill as introduced would not allow people to appeal against certain decisions of the Secretary, including decisions to suspend payments. We believe the authority is the cheapest and most effective avenue for appeal, and recommend that its scope be widened to include such reviews.

We also recommend that clause 85(2) be amended to provide that the authority can review a decision of the Secretary only on the application of a provider whose approval has been cancelled or modified, or by a person whose application to be a provider has been declined or made subject to a condition. This would make it clear that the process is focused on providers.

We recommend amending clause 86(2) to require the authority to provide full reasons for its decisions. This reflects the fact that the authority’s decisions may have serious implications for the approval status of the applicant or provider concerned, and that the applicant or provider might wish to seek a judicial review of the decision.

We recommend deleting clause 83(2), which would impose a time limit for seeking judicial review of a decision by the authority.

We also recommend amending clause 84 to require the person appointed to be the Review Authority to be a barrister and solicitor of the High Court of New Zealand, with at least seven years’ legal experience. This would ensure the person appointed to this role had sufficient experience to make the decisions required.

Cancellation

Clause 103(1)(b) would require the Secretary to cancel the approval of a provider who was convicted of an offence punishable by imprisonment. We recommend modifying this provision by adding that the conviction in question must reflect on the provider’s fitness to practice, or tend to bring his or her profession into disrepute. This would align the provision with those in the Lawyers and Conveyancers Act 2006, ensure providers were held to appropriately professional standards, and protect the reputation of the profession.

Legal education

We recommend inserting clause 68(2)(fa), which states that the Secretary for Justice may undertake or fund law-related education and research. While legal information and education is included in the definition of legal services in clause 4, we recommend setting out more explicitly the ability of the Secretary to undertake or fund law-related research and education.

Provider approvals

We recommend amending clause 77 by inserting new subclause 3A. This would require the Secretary for Justice to provide a reason for declining or giving approval for a provider to provide legal aid or specified legal services.

Review applications and timeframes

We recommend deleting clause 51(3) and replacing it with a new clause 51(3). This would give the Legal Services Commissioner the power to accept a late application for the reconsideration of a decision within three months of notification of the decision, provided there were exceptional circumstances which prevented the application being made in the initial 20-working-day review period. We believe this would improve the review process by ensuring that applicants were not penalised by circumstances outside their control, without needing a distinction between represented and unrepresented applicants.

We also believe the same timeframes should apply to applications for a review of the Commissioner’s decision by the Legal Aid Tribunal, and we recommend inserting clause 53(2) to apply the same provision to tribunal applications.

Performance review committee

We recommend amending clause 79(2) to make it clear that the purpose of the performance review committee is to assess and advise on the performance of a legal aid provider, in order to assist the Secretary for Justice’s decision-making.

We also recommend amending clause 79(3) to provide that the Secretary may refer a matter to the committee if he or she believes that a provider has failed to comply with any provision of the bill, regulations, or condition of their approval, and the Secretary considers that failure justifies cancellation or modification.

We believe these changes would make the role of the committee clearer for practitioners, committee members, and statutory bodies.

Quality assurance

We recommend amending clause 88 to allow the Ministry of Justice to carry out quality assurance checks in order to ensure legal aid services are being delivered and administered effectively and efficiently.

Use of non-lawyers

We recommend amending clause 69(a) to provide that non-lawyers may be used only for work that is appropriate for non-lawyers to undertake, under the Lawyers and Conveyancers Act. The role of non-lawyers in the bill as introduced was ambiguous, and we believe this amendment would provide the necessary clarity.

Transitional arrangements

We recommend amending clause 125 to clarify that any references to the Legal Services Agency in enactments, instruments, and registers should be read as references to the Secretary for Justice (unless they fall within clause 71(1)(a) to (d), in which case they are to be understood as referring to the Legal Services Commissioner). This would ensure that contracts that fell under the Secretary’s responsibility were understood to be with the Secretary once the bill was enacted.

We recommend that clause 135 be amended to ensure that listed providers under the former Act could, for six months after the commencement of the new regime, continue to provide the services they were approved to provide. This amendment of clause 135 would also make provision for providers who had applied within that six-month period for approval to provide legal services, to continue to provide their services as listed providers until the Secretary made a decision about their application.

We also recommend that clause 135 be amended by inserting subclause (1A). This would clarify that providers approved for the transitional period under the Legal Services Act, who have applied to be an approved legal aid provider under the new regime, will receive temporary approval while their applications are being processed.

Preferred lawyer

Concern was raised about the removal of the right of defendants in less serious criminal cases to choose who should represent them. This is a recent operational decision by the current Board of the Legal Services Agency. We considered whether provision for the preferred lawyer system should be to be included in the bill. The system was introduced by the board in the belief that it would improve the quality of representation by allowing legal aid recipients to use the best lawyers available. However we heard from the board that this belief has proved unfounded, and that in practice many poorly-performing lawyers have continued to receive a large amount of legal aid work. The board has therefore removed the freedom for recipients to choose their lawyers for category 1 and 2 criminal cases, which involve lower-level criminal offending. Defendants charged with more serious category 3 and 4 criminal offences, or people involved in civil or family cases, may still choose who should represent them.

Currently the agency must take into account any special needs of the recipient, such as language barriers, when assigning a lawyer. We believe this policy strikes the correct balance between ensuring people receive the most appropriate representation and ensuring the efficiency of the system, and we recommend that it continue under the new regime. We considered recommending including in the bill a schedule setting out the factors that must be considered when allocating a lawyer. However, we decided that this was an operational matter and that it would be difficult to provide an exhaustive list of such factors that could remain relevant in the future. We consider that the efficient and effective administration of the system will require operational policies that strike the right balance for the time.

Statutory consultation requirements

We heard a number of submissions from community law centres and other organisations concerned about the absence of statutory consultation requirements in the bill. This bill makes no provision for any equivalent of the Public Advisory Committee, established by the Legal Services Act to advise the Legal Services Agency about community legal needs. We heard submissions that the bill should require the Secretary for Justice to consult representatives of community law centres to gauge the level of need for community legal services. We believe such consultation by the Ministry of Justice of community legal providers to be important and good administrative practice; but we concluded that embedding this in legislation was not necessary to ensure this consultation continued.

Independence

We heard concerns expressed about bringing legal aid services under the responsibility of a Government department, and in particular that decisions could be subject to political interference, thus limiting the independence of the criminal bar. We are satisfied that the new statutory officer created by the bill, the Legal Services Commissioner, would retain the necessary degree of independence. Functions that require independence, such as granting decisions, are defined in the bill as independent decisions of the Commissioner. It is important that while the Commissioner would be accountable to the Secretary for Justice, the Secretary should not be able to interfere in the Commissioner’s performance of his or her independent functions as set out in the bill. There are a number of instances of a similar structure having been used successfully within the public service, such as the Registrar of Companies and the Director of Public Health.

Legal Services Management System

We were concerned to hear that the Legal Services Agency was having difficulty implementing its new Legal Services Management System, causing delays to the processing of provider invoices and the making of granting decisions. The computer system automates the complex granting processes used by the agency. It is also intended to ensure that providers are paid at the correct hourly rate and that payment is made only for work that has been formally approved by the agency. The system is designed to ensure that decisions by the agency comply with legislation and policy, and that grants are made consistently nation-wide, and to reduce errors. Following the introduction of the system in September 2010 there were delays in the processing of invoices and applications, as agency staff and providers adapted. Changes in GST rates and the use of GST-exclusive rates for legal aid also affected invoice processing, and the Canterbury earthquake caused regional disruption. However we were pleased to hear that the agency had taken steps to clear the backlog and ensure the system will be working efficiently by early 2011.

Report of the Regulations Review Committee

The Regulations Review Committee expressed to us a concern that the reasons and justifications for the exemption-making power in clause 114(1)(o) were not clear, and that the controls on the power might not be sufficient. We considered these concerns carefully, and are satisfied that the power is appropriate.

Appendix

Committee process

The Legal Services Bill was referred to us on 24 August 2010. The closing date for submissions was 8 October 2010. We received and considered 24 submissions from interested groups and individuals. We heard 13 submissions.

We received advice from the Ministry of Justice. The Regulations Review Committee reported to us on the powers contained in clause 114(1)(o).

Committee membership

Chester Borrows (Chairperson)

Jacinda Ardern

Kanwaljit Singh Bakshi

Simon Bridges

Dr Kennedy Graham

Hon Hekia Parata

Hon David Parker

Lynne Pillay

Paul Quinn