Justice Minister Judith Collins is considering releasing both reports on the David Bain compensation claim by the end of the week.
She revealed that retired Canadian judge Ian Binnie went "well beyond" the terms of reference laid down by former justice minister Simon Power.
"I would have thought that was a pretty basic thing to get right," she said. "I read it from cover to cover and I had deep concerns."
She was worried that individuals who gave evidence were criticised in Binnie's report and not given the opportunity to respond.
"There is also issues around the understanding of the law of evidence in New Zealand,'' she said.
''There is quite a long list of concerns. Anyone who is a lawyer would have concerns."
Attorney-General Chris Finlayson and Solicitor-General Michael Heron shared those concerns and agreed the report should be reviewed.
Collins will receive a peer review from Robert Fisher,QC, today or tomorrow.
"I am giving very careful consideration to the repeated requests from Mr Bain's supporters and also now from former justice Binnie that I release the reports," she said.
She said they needed to be released together.
"Mr Bain and his supporters have obviously got a lot of concerns and I think they are very worried about the process and I want to be as transparent as possible."
Yesterday, she lashed Binnie's report for containing assumptions based on incorrect facts and a misunderstanding of New Zealand law.
She said he criticised individuals who gave evidence in the Bain trial and gave them no recourse to respond.
"There are comments that have been made. Now that we've had Justice Binnie come out and make statements which are very unfortunate - accusations that I was running a political process."
She said it was "very demeaning" for him to make the comments but she did not want to get into a ''slanging match'' with Binnie.
She defended Heron from "extraordinarily unfair" attacks by Binnie, saying he was not involved in the Bain legal proceedings.
Bain deserved a fair process, "and that's what I'm trying to deliver for him," she said.
Binnie bit back this morning, calling for his report to be provided to Bain and made public.
It was a "curious feature" of the Bain case that all "external" judges who had looked at the case had rejected the arguments of the solicitor-general and the Crown Law Office regarding Bain's guilt, he said.
He is understood to have suggested that Bain was innocent on the balance of probabilities.
Bain is seeking compensation for wrongful conviction and arrest. He spent almost 13 years in jail but was aquitted at a retrial in 2009.
He stands to get almost $2 million, but the Government is not legally obliged to pay out.
FRESH REPORT MAY BE ORDERED
The Government may be forced to order a fresh report on Bain's claim for compensation after rejecting the $400,000 Binnie report.
Collins said Binnie's advice was based on "incorrect facts" and a misunderstanding of New Zealand law.
Binnie was paid about $450 an hour. Collins has asked former High Court judge Robert Fisher, QC, to peer review his report, racking up a further legal bill.
Fisher will deliver his review within days. The Cabinet will decide the next steps in the new year, and sources say if he concludes Binnie's report is flawed it may have to be scrapped.
Critics have argued the Government's bill for legal advice may top any compensation figure Bain is seeking. He could get a $2 million payout for wrongful conviction and imprisonment.
Collins insisted yesterday that she was not "shopping around" for a legal opinion that suited the Government.
She could not make a recommendation to the Cabinet based on a report that "would not stand up to public scrutiny".
She revealed that Binnie had sent two further unsolicited versions since she and Justice Secretary Andrew Bridgman met him on September 13 to express concerns.
She said he would not be paid for the extra work.
Binnie was asked to consider whether Bain was innocent on the balance of probabilities and whether there were any extraordinary circumstances the Cabinet should take into account. He was not instructed to determine whether Bain should receive compensation.
"It doesn't matter [what his conclusions are] if he's got basic facts wrong," a source said.
Collins defended the cost to taxpayers, saying a dollar value could not be put on justice.
She also expressed concern at the delay to Bain's application, made after he was acquitted in a 2009 retrial.
Labour's justice spokesman, Charles Chauvel, called on Collins to release the report "and let the public judge for themselves".
"What we are being asked to believe is that a retired judge of the Supreme Court of Canada has made basic mistakes and that Judith Collins knows best," he said.
Collins said she hoped to make public both the report and review once the Cabinet made a decision in the new year.
Michael Reed, QC, acting for Bain, said he was "too busy" to discuss the latest developments, while Binnie did not respond to a request for comment.
- © Fairfax NZ News
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