Corrupt lawyers 'threatening legal aid'

A review of legal aid has accused corrupt lawyers of exploiting the system for personal gain with plea delays and backhanded deals.

The Legal Aid Review report released today said it was appalling where lawyers were abusing the system indifferent to clients' needs.

Dame Margaret Bazley, who headed the independent review, said there could be as many as 200 corrupt lawyers in the system and they should be disbarred.

"While there are very good lawyers in the legal aid system, there is also a small but significant proportion of very bad lawyers who are bringing themselves and their profession into disrepute," she said.

The situation could not be allowed to continue.

"The damage that incompetent and unscrupulous lawyers can inflict on their unsuspecting clients – and the potential to destabilise the court system, with resulting wasted expenditure of public money – is simply too great."

Poor lawyer practices included:

* lawyers ignorant of legal principles and not realising their own ignorance;

* "car boot lawyers" using a District Court law library phone as their office number and using interviewing rooms as their offices;

* lawyers gaming the system by delaying a plea or changing pleas part-way through the process to maximise payments – Dame Margaret said sources told her up to 80 percent of lawyers practising in Manukau District Court could be gaming the system;

* lawyers who demanded or accepted top up payments from clients who do not understand legal aid;

* widespread abuse of the preferred lawyer policy by duty solicitors, including taking backhanders for recommending particular lawyers to applicants.

Dame Margaret said the system needed to make it tougher to become a legal aid lawyer.

She recommended an accreditation system. Lawyers would have to get accredited before they could practise, and renew it every three years.

It should be subject to conditions that would ensure accountability to the provision of legal aid services.

Legal aid lawyers should also get training, supervision, peer support and feedback on their performance.

Pay and other issues also needed to be addressed.

Some clients were also abusing the system, aiming at manipulating it to their own ends, or for lawyers' financial benefit, said the report.

The system has a high number of repeat clients, accounting for about 63 percent of expenditure.

Dame Margaret recommended a case management system, where repeat clients who reach a threshold or continuously dismiss lawyers, would not be entitled to their choice of lawyer.

"Compounding these problems is the dysfunctional relationship between the Legal Services Agency and the New Zealand Law Society," she said.

"Each blames the other for shortcomings in the legal aid, and each considers the other responsible for the quality of legal aid lawyers."

The report said the agency has not been successful in holding lawyers accountable for their performance and it struggles as a small bureaucracy outside mainstream government.

Dame Margaret said a sea change was needed to revamp the crippling system. Among 86 recommendations, she suggests the Legal Aid Agency be folded into the Ministry of Justice.

If the system cannot be rectified within three years, the government should institute an independent regulator for the legal profession, Dame Margaret said.

Justice Minister Simon Power, who initiated the review in April, said the report was deeply concerning and the Government would act swiftly to implement the structural changes suggested.

"I will be raising some of the recommendations in Cabinet on Monday to ensure we maintain certainty around the delivery of legal aid.

"We will act on the remainder of the recommendations early in the new year."

Mr Power said he was most concerned about her criticism of how the agency operated and lawyers' behaviour – it goes to centre of the integrity of the legal system and it needs urgent attention.

"When someone as experienced in providing services to the public as Dame Margaret talks about system-wide failings, a system open to abuse, and appalling behaviour, we know we have a problem."

The Law Society said it would comment once it had the opportunity to study the report fully.

- NZPA