Court of Appeal rules Criminal Fixed Fee Regime to be unlawful

Marie Dyhrberg                  On 24 May 2013, the Court of Appeal delivered its long awaited decision in The Criminal Bar Association of NZ Incorporated v Attorney General & White [2013] NZCA 176.

The proceedings arose out of a challenge by the Criminal Bar Association (CBA) to the implementation of the criminal fixed fee policy by the Ministry of Justice in March 2012.

The Court of Appeal found for the appellant, the CBA, on two points:

1. 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; and

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

Background

Following concerns expressed by the Government about the rising level of legal aid expenditure, the criminal fixed fee policy was introduced subsequent to the completion of a review of the legal aid system by Dame Margaret Bazley (“Transforming the Legal Aid System”, November 2009).

In addition to criticising the quality of legal aid services being provided by lawyers, the Bazley report included recommendations that legal aid be delivered via a mix of publicly and privately provided services; that there be greater flexibility in the procurement of legal services; and that a funding model that ensured best value for tax-payers’ money should be used. The Bazley report favoured funding models such as bulk funding or fixed fee, over the existing model of “fee for service”.

The Bazley report has been the subject of widespread criticism by criminal practitioners who have described the report as being inadequate, unfair and inaccurate, in part due to its apparent reliance upon anecdotal comment as opposed to empirical research.

Criminal fixed fees

The introduction of criminal fixed fees is one of a number of decisions made by the Government to alter the legal aid framework.

A succession of changes has been implemented with speed.  In November 2010 the ability of legally aided clients to elect their counsel of choice for category 1 and 2 criminal proceedings was removed. In April 2011 the government announced that the Public Defence Service’s caseload would increase to 50% of criminal cases in the Courts where it operates. In July 2011 the Legal Services Agency was disestablished and the responsibility for administering legal aid was transferred to the Ministry of Justice. In March 2012 the criminal fixed fee policy was implemented. All of these decisions have had a significant impact on the independent criminal bar and legally aided clients.

Removing the appointment of counsel of choice and reducing the amount of legal aid cases to be assigned to practitioners at the independent bar had significant implications for clients who could no longer nominate counsel they felt would best represent their interests, but instead had to settle for counsel assigned to them on an apparently random basis, with whom they may have had no existing relationship.

Criminal practitioners at the independent bar were left to deal with the obvious and negative impacts upon their practices resulting from the sudden reduction in their legal aid caseload as a result of the implementation of these successive changes to policy.

The CBA’s concerns regarding the introduction of the fixed fees regime were formally addressed in a comprehensive written submission provided to the Ministry of Justice prior to the implementation of the policy.

The overarching concern was that the implementation of fixed fees was not the appropriate mechanism for reducing legal aid costs, and that the policy would impact negatively on the goal of providing quality legal services.

In addition to a number of issues, the CBA expressed a concern that the low level of remuneration to practitioners would result in counsel being unable to comply with their obligations to their clients and to the Court. The

CBA also foreshadowed that implementation of the policy was likely to result in driving away competent practitioners from the practice of criminal law, and a reduction in the number of senior counsel prepared to undertake legal aid work.

In the face of strong opposition by the criminal bar, the criminal fixed fees policy was implemented by the Ministry of Justice in 2012.

Judicial review

Following implementation of this policy, the CBA applied to the High Court for judicial review of several of the key decisions made in respect of the new fees regime. In a judgment delivered on 31 August 2012, Simon France J dismissed all of the challenges made by the CBA. The CBA subsequently filed an appeal, the decision on which was handed down last Friday, 24 May. 

Whilst the awaited decision from the Court of Appeal has now been delivered, exactly what the decision means in practical terms is yet to be ascertained. All parties will require an opportunity to digest the decision.

What course the Ministry of Justice will choose to adopt as a result of the decision is awaited with considerable interest. Will the Ministry file an appeal against the decision? Will the Ministry seek to legislate to address the matters contained in the Court of Appeal decision? Will the fixed fees policy be set aside or perhaps amended by the Ministry?

The negative impacts of the fixed fee policy in operation to date have been widely felt by the independent criminal bar. Category 1 and 2 lawyers at the bar have been particularly affected by this regime, not only in terms of a significant reduction in income but also by the lack of opportunities to develop a career path at the independent bar.

Under the existing regime it appears Legal Services is reluctant to assign private providers to the role of junior counsel in many cases and this is seriously impeding the ability of category 1 and 2 providers at the independent bar to obtain the necessary experience to achieve the required categorisations to conduct trials in the higher criminal categories.

Senior practitioners appear to be focussing on their private practice as opposed to taking on the same number of legally aided clients as before.

In terms of the impact upon practitioners’ remuneration, references to a ten per cent cut may be misleading given the cumulative effects of the introduction of successive policies which have impacted upon the practices of independent barristers.

It appears that a drop in income for some has exceeded ten per cent, with some practitioners reporting a lowering of gross income by as much as fifty per cent.

It is hoped that in response to the Court of Appeal decision the Ministry might elect to consult on a professional and meaningful basis with members of the profession, in order to design a scheme that not only addresses fiscal concerns but ensures delivery of quality legal service to clients, fairly pays practitioners for necessary work and preserves the future of the independent bar. However all parties need time to review the recent decision and digest the implications.

Whilst the response by the Ministry will be eagerly anticipated, for now it is a case of “watch this space”. 

Breaking news

Following the writing of this article, on Monday 27 May Justice Minister Judith Collins responded to the Court of Appeal’s decision, announcing that leave to appeal had been filed at the Supreme Court.

She acknowledged that although the Court of Appeal had found the process of implementing the fixed fees policy unlawful, and that it unreasonably restricts the Legal Services Commissioner’s discretion, the Court had rejected that the policy was unlawful in any other respects.

Minister Collins noted that the Court of Appeal had reserved its decision on a remedy, and that pending clarification from the court, or the outcome of an appeal, the immediate future was uncertain. “It is not in the public interest to stop processing legal aid applications – there are approximately 1215 applications per week”, said Ms Collins.

The Crown has also advised the Court of Appeal that it intends to continue with the status quo until a final determination is made, as it is impractical to freeze legal aid applications and payments pending the outcome of the appeal.

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