$40m of public money for private law firms

Why do we give $41 million each year to private law firms to conduct public prosecutions? As part of the Is This Justice? series, Guyon Espiner investigates.

The defendants have behaved "very, very badly" and taken advantage of a drunk young woman. The police have charged them with sexual violation. But the senior detectives who arrive at Auckland Crown Solicitor Brian Dickey's office do not get the result they were hoping for: The Crown will not be proceeding with a rape charge.

"The decision was quite nuanced," Dickey says, pointing a few meters across the office to the room where he gave police the bad news.

"It wasn't that there was no evidence upon which the jury might convict, but that we thought there was no realistic prospect of a jury convicting."

Dickey, the son of working class Dalmatian immigrants who tackled his first High Court trial aged just 23, now prosecutes the most serious crimes in Auckland. He prosecuted Jesse Kempson for the murder of British backpacker Grace Millane. He prosecuted Eli Epiha for murdering constable Matthew Hunt and attempting to kill his partner, constable David Goldfinch.

But it's the cases which do not go to trial that worry him the most.

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"They're not going to be held to account in a courtroom because I've decided there isn't sufficient evidence or the public interest favours not pursuing that charge. So that sits on me without oversight of the judicial system."

It is usually the police who charge people and then prosecute them for crimes. But the most serious crimes - about 5 percent of all prosecutions - become Crown prosecutions. When they do, the Crown Solicitor can add to the police charges, modify the charges or withdraw them.

This is the power of the Crown Solicitor, and yet Dickey does not work for the government: All of New Zealand's Crown Solicitors are lawyers in private law firms.

Why do we trust the private sector with these decisions? And why are we paying private firms $41 million of public money each year to conduct public prosecutions?

***

Dickey's office is a luxuriant, light-filled space on the top floor of a central city Auckland high rise.

A Karl Maughan painting, with its vivid, pulsing flowers, draws your gaze, and you could easily miss the much smaller picture frame, which holds something plain to the eye but of great value: the Auckland Crown Warrant.

It was awarded to Dickey in 2015 and last year was worth $7.5 million in government money.

Dickey is a partner at Meredith Connell, which has held the Crown Warrant for Auckland for a century.

A fresco of newspaper stories, spread across a section of the open plan office, catalogues the history of cases Meredith Connell has prosecuted for the Crown.

"Munn To Hang" reads the headline above the story of Arthur Munn, sentenced to death in 1930 for poisoning his wife with strychnine. The prosecutor was Vincent Meredith who was made Auckland's first Crown Solicitor in 1921.

The firm has held the Crown Warrant ever since (the warrant is in the name of an individual - the Crown Solicitor - but the law firm assists them and the lawyers working under them are Crown prosecutors).

Crown Law records, released to RNZ under the Official Information Act, show that in many centres the Crown Warrant has been with the same firm for decades.

In Christchurch, Raymond Donnelly & Co has held the Crown Warrant since 1914, the year World War I began. In Wellington, Luke Cunningham Clere has held it since 1936, when Michael Joseph Savage was Prime Minister, ushering in the welfare state during the Great Depression.

Gresson Dorman & Co have held the Crown Warrant in Timaru since 1954, and in Whangārei, Marsden Woods Inskip Smith have held it since 1971.

Why are the same private firms bagging large amounts of public money year after year for decades?

Each Crown Warrant is issued by the Governor General in the name of the Queen, and Crown Solicitors serve at her majesty's pleasure.

Those appointed before 2013 have the warrant for life. Those appointed afterward have a 10-year term, but can apply to be reappointed after it expires.

Technically the warrant could be withdrawn, but no Crown Solicitor has ever been removed from office.

There are 16 Crown Solicitors in New Zealand. All have a regional monopoly on prosecuting serious crime for the Crown. All are lawyers in private firms.

***

On a no-exit side street in the grungy part of Auckland's Eden Terrace is a bunker where a private investigator, if he knows you're coming, will nod at you from a narrow, darkened window, hit the keypad, and let you in.

Tim McKinnel is a former detective who picks holes in the work of his onetime colleagues, often on behalf of defence lawyers funded by legal aid.

He says the low pay rates for legal aid - the levels have not been adjusted since 2009 - mean defence lawyers often stack themselves up with work and can't devote the time their clients need.

Māori and Pasifika clients bear the brunt of this, he says, as they are more likely to be in a financial situation that means they need legal aid, plus, they're more heavily targeted by the criminal justice system.

"You've got lawyers who are advocating for predominantly Māori and Pasifika who are under enormous, constant pressure," McKinnel says. "They're up against the state and Crown Solicitors - private law firms - who are supported by the police. There's a terrible imbalance here."

McKinnel wanted to quantify the imbalance.

Private law firms aren't subject to the Official Information Act (OIA), so McKinnel used the OIA to ask Crown Law, the government department which oversees Crown prosecutions, how it ensures Crown Solicitors aren't contributing to bias in the justice system.

But the sleuth, who became a household name after his investigative work helped free Teina Pora from jail for a murder he didn't commit, came back virtually empty handed.

Crown Law said it didn't monitor the ethnicity of defendants and nor did it have internal policies about bias in the criminal justice system.

In the 26-page contract between Crown Law and Crown Solicitors, called the Terms of Office, just two paragraphs are devoted to diversity and the Treaty of Waitangi.

One paragraph says Crown Solicitors are "committed to the values and principles" of the Treaty and will deliver services to reflect that. The other paragraph says "where practicable" Crown Solicitors should try to "reflect the diversity of the community which the warrant serves".

McKinnel didn't ask how many of the Crown Solicitors themselves were Māori.

But Crown Law had agreed to an interview with RNZ. Seeing as there are only 16 Crown Solicitors - there are 17 warrants but one solicitor covers the Hawke's Bay and Gisborne regions - we expected Crown Law could easily give us an ethnic breakdown.

***

Deputy Solicitor General Madeleine Laracy has booked Quiet Room No 1 at the Crown Law office, just across the road from Parliament.

Laracy, formerly the chief spy watchdog in her role as acting Inspector General of Intelligence and Security, heads the Criminal Group at Crown Law and is directly responsible for monitoring the Crown Solicitor Network.

She's an enthusiastic and expert advocate for the virtues of the Crown Solicitor system, revelling in its history and gently chiding when she feels its shortcomings are overstated.

But 48 minutes into the interview, when asked the simplest of questions - how many of the Crown Solicitors are Māori? - there is a long and unexpected pause.

"I don't know if any of the Crown Solicitors would label themselves as Māori," she eventually responds. "We don't ask that question. We don't have that data. We don't ask them how they identify."

Since Crown Law doesn't have the data, RNZ decided to collect it for them. Because they are private law firms not subject to the OIA they didn't have to respond but 11 of the 16 did.

The responses showed many were failing to reflect the diversity of their communities. The Crown solicitor firms in Christchurch, Gisborne and Whanganui had no Māori prosecutors at all and outside Auckland few firms had more than one.

Interestingly, one of the best performers on diversity is a firm that had to start from scratch when a new Crown warrant was issued for Manukau, breaking the Auckland-wide monopoly enjoyed by Meredith Connell.

Kayes Fletcher Walker was a small criminal defence law firm with three people when Natalie Walker was made the first Crown Solicitor for Manukau in 2015. The firm now has 39 lawyers - 24 are Pākehā, six are Māori and four are Pasifika. The firm also has prosecutors from China, Sri Lanka, Iraq, Macedonia and the Democratic Republic of the Congo.

Laracy accepts that there is bias in the criminal justice system - it would be difficult not to, given more than half the prison population is Māori despite making up only 16 percent of the general population.

But the way to combat that, Laracy says, is by Crown Solicitors "ensuring that they prosecute impartially and without discrimination".

If a prosecution was driven by discrimination, she says, that would not go unnoticed.

"That's going to show up in the fact that there isn't sufficient evidence and it isn't in the public interest and those concerns should be readily identified in the court process."

Maybe. But then as Brian Dickey said, as he recalled his angst over the rape allegation that never went to trial, sometimes a Crown Solicitor's decision is never exposed to the bright lights of the court room.

So who monitors the performance of Crown Solicitors? The short answer is Madeleine Laracy's boss, Solicitor General Una Jagose, the government's chief legal advisor and chief executive of Crown Law.

According to the Terms of Office, the Solicitor General conducts reviews of Crown Solicitors which are "designed to ensure high standards" and "examine the legal acumen and performance".

But Crown Solicitors are only subject to these reviews every three or four years and the public is asked to trust their performance is acceptable without being able to verify that it is.

RNZ asked for copies of the performance reviews but Crown Law wouldn't hand them over, saying they are not subject to the OIA.

Dickey reckons his performance review would stand scrutiny. "In a way I would like you to have it because it is really good," he says, deploying the deadpan drawl which belies his skill as a prosecutor.

"We're subject to an enormous amount of public scrutiny. We're not subject to this very bespoke particular aspect of public scrutiny," he says, narrowing the allegation and neutralising it, as if defusing a bomb.

When a case is appealed, the Crown Law office in Wellington goes through the file with a fine-tooth comb, he says.

"It's very hard for an office my size to hide anything in terms of the way that we conduct the public office aspect of being Crown prosecutors."

***

Dickey clearly takes his role very seriously. He became Crown Solicitor in 2015 after Simon Moore, who worked at Meredith Connell, was appointed a High Court Judge.

Sometimes Dickey can turn up to court and his old mentor is the judge, as he was in the Epiha trial.

For McKinnel it is all a bit too close for comfort. The private law firms are dynasties, he says. The Crown Warrant seems to be handed down through the ages.

"Where's the contestability with the law firm that has held a warrant for 100 years," he asks. "You can't tell me that that is the free market working. It goes beyond that. These geographic monopolies, these dynasties, have a great deal of power and influence in society."

If you ask a Crown Solicitor, Crown Law or the government minister responsible for the system about this, you'll end up in a circular argument which effectively boils down to this: We've always held the warrant because we have the expertise. We have the expertise because we've always held the warrant.

The politician at the top of the legal system, Attorney General David Parker, articulates this view most eloquently, or pompously, depending on your view.

"It's perfectly natural [for Crown Warrants to stay with the same firm] because it's the repository of that specialist knowledge that's accrued from working for the Crown through the generations that is imbued in those firms," Parker says.

"They are effectively a local monopoly. But you deal with the monopoly concern through having regulated prices, not by pretending that you should change it through some sort of competitive tender process."

When he talks of regulated prices, he means there is a cap on the amount spent on Crown prosecutions each year, currently $41 million. This is divided up among the 17 warrants, based on the volume and complexity of cases.

This bulk funding regime was introduced in 2013 and led to considerable cost savings - a 25 percent reduction, according to a 2016 statement by former Attorney General Chris Finlayson, who presided over the changes.

"We do not pay them on an hourly basis, so if they do more hours, they do more hours. There's no more money," Laracy says.

But bulk funding may have introduced unintended consequences, according to research by Andrew Britton, who worked as a Crown prosecutor himself.

For his 2018 paper, Pressing for Sentence, An Examination of the New Zealand Crown Prosecutor's Role in Sentencing, Britton spoke to ten Crown prosecutors about the impact of bulk funding, among other issues.

One prosecutor told him the warrant had been "a license to print money" but that changed with bulk funding, and in some firms "equity partners have made decisions that they are not going to take a pay cut - they will just live with having less staff".

More alarming was the suggestion that lawyers in these firms might use plea bargains to clear work off the books.

''I certainly do believe that we will be accepting pleas to lesser charges on less principled bases than we did in the past, to dispose of cases," one lawyer told him, adding that there was "definitely variation" in how people were charged between different Crown firms.

"There are a lot of suggestions that some people are doing unprincipled resolutions to get things disposed of quicker so that they can get more money," one lawyer told him.

Laracy is quick to stomp on that idea. "We've seen no evidence of that," she says. "Theoretically the incentive is there," but she believes the open court system provides the checks and balances in plea bargaining.

"One of the protections against that is the public nature of prosecutions. So these are not deals ... that happen behind the scenes without a degree of public accountability through the court process."

***

New Zealand is the only western democracy that contracts out such a vital piece of the justice system to the private sector.

Laracy describes it as a quirk, an accident of fate.

"It is a historical anomaly. New Zealand, amongst comparable jurisdictions, I understand, is the only one that has that particular model."

"In 1918 the Solicitor-General of the day determined that all Crown Solicitors were agents of Crown Law," according to the Spencer Review of the Crown Solicitors Network in 2011. "This view has not been formally contested since then."

Is the system still fit for purpose?

Attorney General David Parker says it is not about to change. Parker, who has spent 20 years in Parliament and has been Attorney General in two governments, thinks the private law firms provide a healthy buffer, keeping the prosecution function well away from politicians.

"I look at other systems overseas where they have more politicised judiciary and a less hands-off approach and I think they have worse outcomes."

But prominent defence lawyers and legal academics think the system is ripe for change, and for them it's a matter of principle.

"It's almost like a franchising system when you franchise out the bus services for a particular area. We do that in New Zealand for the prosecution function," says Kris Gledhill, Professor of Law at AUT.

"We wouldn't privatise the police, who are exercising that governmental function, and yet we've privatised prosecutions by historical accident."

He says transparency and accountability would be much stronger under a government prosecution service. "People exercising core government functions really should be government employees."

Douglas Ewen, a human rights and defence lawyer with Wellington's Brandon Street Chambers, worked in the British system, where the Crown Prosecution Service is a government department.

"I'm unaware of any other system where the government just directly contracts out a constitutional function," he says.

"My position is there are some things that are so inextricably bound to the state that the state has to deal with it directly. It's the expenditure of public money. There needs to be, as well as legal accountability, there needs to be direct political accountability."

This story is part of the series Is This Justice?