LEGAL SERVICES AGENCY V HASLAM & ANOR HC AK CIV 2006-404-4728

LEGAL SERVICES AGENCY V HASLAM & ANOR HC AK CIV 2006-404-4728 8 February 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2006-404-4728BETWEEN LEGAL SERVICES AGENCY Appellant AND GEORGE HENRY HASLAM Respondent AND THE NEW ZEALAND LAW SOCIETY Intervener Hearing: 6 December 2006 Appearances: GDS Taylor and PJ Ryder-Lewis for Appellant CB Wilkinson-Smith and MM Wilkinson-Smith for Respondent M Scholtens QC and J McHerron for NZ Law Society as Intervener Judgment: 8 February 2007 at 3:00 pmJUDGMENT OF ASHER JThis judgment was delivered by me on 8 February 2007 at 3:00 pm pursuant to Rule 540(4) of the High Court Rules .. Registrar/Deputy Registrar .. DateSolicitors: Bartlett Partners, PO Box 10852 Wellington (P Bartlett) C Wilkinson-Smith, PO Box 276-167 Manukau NZ Law Society, PO Box 5041 Wellington (M Bryson) Copy: GDS Taylor, PO Box 5294 Lambton Quay, Wellington MT Scholtens QC, PO Box 5454, WellingtonTable of ContentsParagraph NumberIntroduction [1]Reviews and appeals under the Legal Services Act [9]The issue [14]First ground of appeal – Proportionality [16]What did the Agency in its second decision decide on "proportionality"?[16]Was the Agency's insistence on proportionality in its second decision manifestly unreasonable, or did it contain an error of law?[24]Was the Panel correct in finding manifest unreasonableness in the Agency decision on proportionality?[32]Was the Panel correct in finding an error of law in the Agency decision on proportionality?[33]Conclusion on issue of proportionality [39]Second ground of appeal – Error in the Panel allegedly adopting a "no stone unturned" approach[41]Interpretation of the second Panel decision [40]Error of law [46]Conclusion on "no stone unturned" approach [52]Third ground of appeal - Did the Panel just substitute its decision for that of the Agency?[55]Consequences [72]Conclusion [75]Result [78]Costs [80]Introduction[1] This is an appeal brought by the Legal Services Agency ("the Agency") against a decision of the Legal Aid Review Panel ("the Panel"). In that decision the Panel reversed a decision of the Agency refusing a practitioner's claim for 150 hours' preparation. The appeal is described by Ms Scholtens QC, counsel for the New Zealand Law Society (which has been granted leave to intervene), as raising an important issue of principle, relating to the extent to which an applicant for legal aid in a criminal matter involving more than one person is entitled to a grant to enable his or her legal adviser to read the entire Police disclosure file. [2] The present situation has its genesis in a very substantial Police investigation known as "Operation Strike". This resulted in ten persons being charged in early 1995 with a substantial number of burglaries and related charges. The Police disclosure included 24 Eastlight files of documents, photograph booklets, videotape interviews and home-movie footage. [3] George Haslam was one of those charged. Whereas the charges against the other accused ranged from 15 charges to 68 charges each, there was only one charge against Mr Haslam. In July 2005 the experienced counsel ("the practitioner") appointed to represent Mr Haslam by the Legal Services Agency, wrote to the Agency advising of the extensive nature of the discovery, and estimating that 150 hours would be required for preparation for the preliminary hearing. [4] On 23 November 2005 the Agency approved an interim grant of legal aid including preparation time of fifty hours. There was some correspondence between the Agency and Mr Haslam's counsel, which culminated in a letter of 23 December 2005. The Agency stated that it deemed the fifty hours' preparation time to be more than reasonable, given the single charge Mr Haslam faced, and the limited evidence that directly related to his level of culpability. It was also stated that after depositions, counsel appointed (who was referred to as "the lead provider"), could very properly claim for increased preparation time to read the file in its entirety. It was clear, therefore, that the original grant of fifty hours'preparation time was for preparation which would not include reading all the discovered material before depositions, and that the Agency was not prepared to pay for it all to be read. [5] Counsel for Mr Haslam applied to the Panel to have that decision reviewed. On 13 March 2006 the Panel issued a decision ("the first Panel decision") in which it found:[30] The Panel accepts the submissions for the Applicant that it was entirely appropriate for the listed provider to read all the material disclosed by the police in this case. It was the professionally responsible course of action to adopt. It is manifestly unreasonable to suggest that the material could or should have been approached selectively. [31] In the circumstances, the Agency's decision must be revisited. The Applicant is to be granted aid for the purposes of reading the material disclosed by the police in this case. The Panel is, however, not in a position to ascertain what an appropriate level of grant would be, and has therefore decided to refer the matter back to the Agency.Decision[32] For the reasons set out above, the Agency is directed to reconsider the amount of aid to be granted to the Applicant for preparation. [33] In reconsidering the matter, the Agency is directed to take the following matters into account:• it was appropriate for the listed provider to read all the material provided by the police as part of the preparation for depositions.• the listed provider spent a total of 170 hours in preparation; and• the listed provider was careful to keep the Agency fully informed at all times as to what she was doing and what was likely to be involved.[6] In accordance with the first Panel decision, the Agency reconsidered the amount of aid granted. On 4 May 2006 the Agency issued its further decision in response to the Panel's direction. It stated that fifty hours' preparation, the same amount it had previously allowed, was consistent with the level of work involved, and that the grant remained at fifty hours of preparation. Counsel for Mr Haslam applied to the Panel to review this decision. [7] In its decision of 11 July 2006 ("the second Panel decision"), the Panel concluded that the Agency's refusal to grant more than fifty hours' legal aid to the applicant was both manifestly unreasonable and wrong in law. It reversed theAgency's decision. It stated that the applicant was to be granted aid for the purposes of reading the material disclosed by the Police file, and that the amount of aid granted was for 150 hours' preparation, the amount sought by Mr Haslam's counsel. [8] The Agency has appealed the second Panel decision on three grounds. First, it is alleged that the Panel erred in its finding that the Agency required preparation to proportionately relate to the number of charges faced and the level of the accused's culpability. Second, it is alleged that the Panel has erred by effectively requiring a litigator to "leave no stone unturned". Third, it is alleged that the Panel has substituted its own opinion for that of the Agency rather than exercise the appropriate appellate jurisdiction.Reviews and appeals under the Legal Services Act[9] Mr Taylor for the Appellant helpfully referred to the history of the legal aid system in his submissions. The 2000 Act is the fourth post-war statute dealing with legal aid. The initial Act, the Offenders Legal Aid Act 1954, gave the discretion to grant legal aid to the Courts. The District Law Societies prepared the list of practitioners who could participate. Fees were governed by the Schedule to the Act, which set out monetary amounts payable for each stage in the proceedings. The Court would determine how to apply the Schedule, and the Court Registrars had significant powers. [10] The second Act, the Legal Aid Act 1969, dealt with civil legal aid only. It set up a Legal Aid Board and District Legal Aid Committees and removed control from the Courts. Section 32 provided in respect of civil legal aid that the sums allowed by the District Committee to counsel and solicitors as legal aid payments would be the full amount of any disbursements and eighty five percent of the amount of profit costs and counsel's fee. Under the Offenders Legal Aid Regulations 1972 the fees of assigned practitioners for criminal legal aid were determined by the Court in accordance with a scale of fees in the Schedule to the Regulations. [11] The Legal Services Act 1991 related to both civil and criminal legal aid. Previously the fees to practitioners had been paid on the basis of a percentage ofprofit costs. There was a move in the 1991 Act to give greater administrative control over expenditure of money to the Legal Services Board. The move was towards paying a fixed amount for particular legal services, called "total remuneration", rather than a fixed return for time spent. Appeals were to an Appeal Authority. [12] The Legal Services Act 2000 put decision-making wholly with the Legal Services Agency for both civil and criminal legal aid. Instead of practitioners receiving "total remuneration" they receive a "maximum grant" (s 14(2)(c)), and there is a staged grant process. A new appellate structure is created. The Appeal Authority is now the Panel, whose jurisdiction was greatly widened to include criminal legal aid decisions, remuneration, and the individualised decisions made by the Agency. Its ability to review is limited to two grounds; first, that the decision reviewed was "manifestly unreasonable", or second, that it was "wrong in law". [13] There has, therefore, been a significant change in the approach taken to the work of counsel on legal aid matters. It is no longer a system based on the actual time and fees of counsel. Rather, it is a system where judgment is exercised by the administering body as to the appropriate fee for the work done or to be done. The difficulty arising from practitioners being able to dictate time and fees has been replaced by the difficulty of the Agency having to make its own principled assessment of the appropriate fee for the work to be done. The difficulty of the Agency's task was referred to by the Minister of Justice in 1991 on the Second Reading of the Bill:There is therefore a conflict between the demand/driven nature of both civil and criminal legal aid, and the need to ration resources. They will never be totally reconcilable.The issue[14] There has been a tendency throughout the submissions to examine the merits of the practitioner's claim that she spent in excess of 150 hours reading the disclosed material. This has involved argument about the number of files, their content, and the helpful material actually elicited by the practitioner in the consideration process. However, this is not the particular issue in this Court. Appeals to this Court arebrought under s 59 of the Legal Services Act, which limits the Court's jurisdiction to correcting an error of law in the Panel's decision. [15] The Panel, in reversing the Agency decision, had to do so on the basis stated in s 54 of the Act, namely that the Agency's decision was manifestly unreasonable or wrong in law. It would be an error of law on the part of the Panel to incorrectly find the Agency to have been manifestly unreasonable. However, this does not mean that it is desirable in this case for the Court to enquire into the reasonableness of the claimed 150 hours. There is insufficient information before me to consider such matters of fact, which in any event, are not suited to an appeal on a question of law.First ground of appeal - ProportionalityWhat did the Agency in its second decision decide on "proportionality"?[16] It is submitted by Mr Taylor for the Agency that the Panel in its second decision misinterpreted the Agency's second decision. The error of the Panel was its holding that the Agency had erred in law in concluding that the number of hours required for preparation must be proportionately related to the number of charges faced, or to the level of an accused's culpability. Mr Taylor argued that this was not in fact what the Agency had decided at all, and indeed that it was at pains not to make the decision on this basis. Instead, Mr Taylor submitted the Agency had in its decision only made the obvious point that if the client is only charged with one charge and is seldom mentioned in the disclosed material, there will be less work in assessing that material than if that client is facing many charges and is mentioned frequently. [17] To deal with this submission it is necessary to review the Agency's second decision that the Panel reviewed. It must be borne in mind that that Agency decision resulted from the Panel having earlier upheld a review of the Agency's first decision, and the Panel having remitted the matter back to the Agency to consider the matter again, taking into account certain factors stipulated by the Panel. Those factors stipulated by the Panel in its first decision were as follows:[33] In reconsidering the matter, the Agency is directed to take the following matters into account:• it was appropriate for the listed provider to read all the material provided by the police as part of the preparation for depositions.• the listed provider spent a total of 170 hours in preparation; and• the listed provider was careful to keep the Agency fully informed at all times as to what she was doing and what was likely to be involved.[18] The first bullet point must be read in the context of the statement at para [27] of the Panel's first decision where it stated:The Panel does not agree with the Agency that the number of hours required for preparation must be proportionately related to the number of charges faced, or to the level of an accused's culpability. The Panel finds that the Agency has erred in law in exercising its discretion based on these factors. The amount of preparation needed for any case has to be assessed in light of its own particular circumstances.[19] Section 58(1) specifically states that the Review Panel may, instead of determining a review, give directions. Section 58(2) states that the Panel must give reasons for any direction and may set out the matters that the Agency must take into account. Mr Taylor has submitted that the Agency could not appeal when the Panel, instead of determining a review, gave the directions to the Agency to reconsider on 13 March 2006. Section 59, which gives the right to appeal to this Court on questions of law, refers only to there being a right of appeal when it is considered that the Review Panel's "determination" is wrong in law. Given the clear distinction between a determination and a direction set out in s 58(1) it is difficult to interpret these two sections as giving any right to appeal from a direction, as distinct from a determination. This seems an anomaly, because a direction can have much of the force and effect of a determination, in that it can require the Agency to reconsider a matter on a certain basis. This is an important and difficult issue, and it is not necessary to determine it in this appeal, which is not against the earlier direction, but from the later determination. [20] The second Agency decision, which responded to the first Panel directions, covered almost two closely typed pages and was quite densely reasoned. I set out two paragraphs:We are conscious that [the Panel] criticised the apparently arbitrary nature of the fifty hours that was set on 23 November 2005 and confirmed on 23 December 2005. We also take into account in accordance with the [the Panel] direction that reasonable time for reviewing all the disclosure relate to the burglary that the aided person was facing. Given that the disclosure only tangentially and/or partially referred to the aided person, we consider that one hour per file would be sufficient plus 20 hours for the remainder of the review and reasonable preparation, including for the heralded positive defence, despite the aided person's confession. You did not need to understand the Crown case against the other accused to represent the aided person effectively and efficiently in respect of one isolated burglary.[emphasis added][21] All counsel agreed that the word "relate" should have read "relating" in the first quoted paragraph. Even with that change the second sentence of the first quoted paragraph is not clear, but I take it to mean that the Agency has interpreted the Panel direction as requiring allowance for a reasonable time for reviewing all the disclosure relating only to the specific burglary charge that the aided person was facing. That this was the Agency's meaning appears to be confirmed by the next quoted paragraph, which contains a further reference to the fact that the aided person was facing "one isolated burglary" and that it was not necessary to understand the Crown case against the other accused. I also interpret these paragraphs as stating that one hour of reading per file would be sufficient, which would equate to approximately 24 hours, given that the estimate is that there were 24 files. [22] I am mindful of Mr Taylor's submission that the two paragraphs I have quoted should not be read out of context. It is correct that elsewhere in the letter the Agency noted that the grant was "not a question of being a linear proportion of the grant of others based on the number of charges or overall culpability." However, there are also other parts of the letter in addition to those quoted which seem to unduly emphasise the fact that Mr Haslam faced only one charge and that it was a relatively minor charge. Further, the statement that it is not necessary for defence counsel to understand the case against the other accused is significant, indicating that only material directly relating to the burglary charge should be considered. [23] The fact that the Agency had failed to take into account the Panel direction that remuneration need not be proportionate to the number and seriousness ofcharges can also be seen from the result of the Agency's second determination. The number of hours to be compensated was not increased. It remained at fifty hours. Some increase could be expected in the second Agency decision, given the Panel direction to re-consider and put aside culpability as a basis for reduction. The fact that the second Agency decision does not demonstrate any reconsideration of hours supports the view expressed by the Panel that proportionality remained a dominant factor in the second Agency consideration. I conclude that proportionality, the need for the work to be in proportion to the seriousness of the charge and not to include an understanding of the charges against other accused, remained central to the second Agency decision.Was the Agency's insistence on proportionality in its second decision manifestly unreasonable, or did it contain an error of law?[24] It is necessary to consider, then, whether the Panel was correct in finding that the Agency made an error of law, or reached a manifestly unreasonable decision, when it applied the proportionality approach. [25] It must be said that the Agency does not appear in either of its decisions to have been prepared to come to terms with the difficulties that a practitioner faces, when that practitioner's client is facing charges that are one or more of a multiplicity of charges laid against a number of co-accused. In such circumstances, a practitioner does not meet her or his professional requirements by only considering documents that overtly relate to the particular legally aided person, or the particular charge. Material that does not overtly pertain to the legally aided person or the charge may nevertheless be relevant if it contains material that might exculpate the client, for instance, by offering the possibility that someone else committed the offence. Of just as much importance is the possibility that there may be material there which inculpates the client, such as a brief that appears to implicate the client in another crime. When there are charges against a number of accused, all inculpatory material needs to be fully understood at an early stage in proceedings because it will greatly affect the tactics at depositions and at trial as to whether to cross-examine or call a client. Indeed, it could lead to a decision to plead guilty at an early stage. Moreover, there is likely to be a need to confer with counsel for other co-accused to decide ontactics. None of these vital professional tasks can be accomplished by counsel without an overall understanding of what the case is about, and what charges the other accused persons face. This cannot be achieved if only that material which directly relates to the particular accused is considered. [26] This problem of sifting through a large quantity of documents, some of which may not be relevant, arises particularly when there is a complex array of facts against a number of co-accused. If the Police had just chosen to lay a charge against Mr Haslam on his own, and provided limited discovery relating to that charge, counsel's task would have been much simpler. But that is not what happened here. Rightly or wrongly, the Police chose to charge Mr Haslam with all the other co- accused who faced an intricate array of factual material, and to deliver this material affecting all accused to his counsel. The Crown has an obligation to disclose all evidence to be called by the Crown, and any other material gathered in the course of the investigation which might be helpful to the Defence: R v Seu CA 81/05 8 December 2005. There is an initial obligation on the Police to separate "the wheat from the chaff": Police v Keogh [2000] 1 NZLR 736 (HC) at [26]; R v Stinchcombe[1991] 3 SCR 326 at [21]. Ms Scholtens for the New Zealand Law Society pointed out that the practitioner acting for Mr Haslam had to assume that all the material in the Police disclosure was regarded by the Police as relevant to Mr Haslam, either immediately in terms of the current charge, or potentially in respect of future charges that might be laid. Defence counsel are aware that the Crown may lay further charges after depositions. [27] The obligation on the legal practitioner to be aware of and to consider all the material, and to read carefully that which is relevant, is demonstrated by the ethical and fiduciary obligations on legal practitioners. In this regard I have been assisted by the submissions of the New Zealand Law Society and an affidavit filed by a senior practitioner, John Rowan QC. The parties referred to the New Zealand Law Society Rules of Professional Conduct for Barristers and Solicitors. These were drafted and adopted by the New Zealand Law Society under the rule-making powers in s 17 of the Law Practitioners Act 1982. They are rules to provide guidance for practitioners in the practice of law in New Zealand (see Introduction, pg 2). They are not an exhaustive code or treatise, and do not have the force of law. They areunder review following the enactment of the Lawyers and Conveyancers Act 2006. They are, however, of obvious assistance in assessing a practitioner's ethical obligations to a client, and indeed are useful in considering a practitioner's fiduciary duties. [28] Commentary (6) to r 1.02 of the Rules states, consistent with s 65(2) of the Legal Services Act 2000, that a client should receive the same standard of service whether the client is legally aided or not. The Rules in Chapter 10 under the heading "Advocate for the Defence" assume that a practitioner acting for a defendant to a criminal charge will have a comprehensive knowledge of all relevant facts and all relevant disclosure. Defence counsel has a duty to see that the prosecution discharges the appropriate onus to prove the guilt of the accused, and to put before the Court any proper defence: r 10.01(1). Defence counsel has the right to adopt a line of defence which attributes guilt to another person, but only if the facts or circumstances arising out of the evidence, or reasonable inference drawn from that evidence, raise a reasonable suspicion that the crime or offence may have been committed by another person. The commentary to r 10.01 states that counsel should examine the facts that the prosecution will prove, must act conscientiously in presenting the case for the accused, and must bear in mind the disclosure obligations arising from Commissioner of Police v Ombudsman [1988] 1 NZLR 385 concerning access by the accused to information. Rule 10.02 places a duty on counsel not to mislead the Court, which means that counsel has a duty to be properly informed about all relevant matters. Rule 10.05 states that counsel must, in advising the client on a plea, or as to whether or not to give evidence, traverse all relevant aspects of the case and seek to ensure that the client makes an informed decision. [29] None of these duties can be discharged unless all relevant information available to defence counsel has been properly considered and understood. These duties are absolute. Defence counsel must satisfy them whatever the seriousness of the charge. The importance of carrying out these duties was demonstrated in this case, where the knowledge that Defence counsel obtained from her reading of the disclosed material resulted in a number of specific benefits. Counsel found in that material an unrelated brief showing her client's car at the scene of another burglary, as well as a video showing her client in the home of the main accused. She was ableto obtain orders excluding both of these pieces of evidence. If she had not been able to have that evidence excluded, she was concerned that the Crown may have joined her client to the main charge of organised crime, or charged him with a second burglary. Also in this case counsel, having reviewed all the disclosed material, was able to arrange for the charge against her client to be called first at depositions. She did not then have to attend the rest of the depositions hearing which took three weeks, apart from sitting in on part of the evidence of a witness who may have been relevant. She was also able to have Mr Haslam's case severed from the trial of the other accused in the High Court. Her client's trial would instead be in the District Court, and was scheduled to take less than a day. If indeed Mr Haslam had gone through a joint trial in the High Court, there would have been a greater burden on legal aid. An understanding of the cases against the other accused was necessary to enable counsel to make these decisions. [30] There was some debate between counsel as to how the particular exercises carried out by counsel in this case assisted her in achieving these results. It is not necessary to go into this. Whether these benefits are accepted as matters of fact or indeed are treated as hypothetical, they demonstrate how a full and proper consideration of disclosure can assist the client, and also how it can promote the efficient use of legal resources. [31] There was, therefore, an identifiable error in the approach the Agency took, because it required an approach proportionate to the seriousness of the charge, which would mean that a practitioner might not consider all material that could help or harm her client. It would never be appropriate for a practitioner to decide to read less and take less care simply because a client faced a single rather than multiple charges, or indeed a minor rather than a serious charge. A practitioner who is representing an accused on criminal charges always has an obligation to prepare thoroughly and properly in accordance with her or his professional obligations. The Agency's assumption that the accused's potential culpability should be reflected in the level of preparation was incorrect.Was the Panel correct in finding manifest unreasonableness in the Agency decision on proportionality?[32] It follows that the Panel was justified in its conclusion that there was an error on the part of the Agency in continuing to apply the proportionality principle in its second decision. The particular error correctly identified by the Panel was the Agency's insistence that the number of hours required for preparation be proportionately related to the number of charges faced, and to the level of an accused's culpability, and that preparatory reading should be limited to that one charge faced. This appears to have been applied as some sort of rule. The Panel was correct in finding this to be manifestly unreasonable.Was the Panel correct in finding an error of law in the Agency decision on proportionality?[33] The question arises as to whether the Agency's insistence on proportionality was an error of law. I am satisfied that it was. The purpose of the Act is stated to be to promote access to justice by providing a legal aid scheme for those who have insufficient means to pay for legal services so they may nonetheless have access to them: s 3(a). In setting out the purpose of the Act it reads:3. Purpose of Act. (a) providing a legal aid scheme that assists people who have insufficient means to pay for legal services to nonetheless have access to them.Section 65(2) of the Legal Services Act 2000 states specifically that the fact that a lawyer provides legal services under the Act does not in any way affect his or her rights, obligations, responsibilities or duties as a lawyer, or the relationship between, or the rights of, the lawyer and his or her client. [34] An accused person has a right to a fair trial. Section 24(d) of the New Zealand Bill of Rights Act 1990 ("the BORA") provides that an accused person has the right to "adequate time and facilities to prepare a defence". In R v B [1995] 2 NZLR 172 (CA) at 182 Richardson J described the right in s 24(d) as: a fundamental right protective of personal liberty and an important element of a fair trial. As well, it is designed to put the defence on a footing of equality with the prosecution in preparation for a fair trial. That right must include adequate access to evidence which the accused requires to present his or her case.[emphasis added][35] The BORA applies to the Legal Services Act. The Legal Services Agency is part of the executive branch of government and in terms of s 3 is performing a public function, power or duty conferred or imposed by or pursuant to law: s 3(b) of the BORA. The Legal Services Agency has an obligation to comply with the BORA in carrying out its functions. This Court must interpret the Legal Services Act in a manner consistent with the provisions of the BORA. The Agency must, therefore, pay a practitioner for sufficient time to properly prepare the defence, whatever the nature or gravity of the charge. [36] An examination of only the material relating to the single charge faced by the accused would have been negligent. There is no access to justice if the legally aided person's counsel cannot properly prepare the case. The Panel in its second decision made no error in isolating this aspect of the Agency decision and upholding the review. [37] This is not to say that the Agency cannot expect sensible selectivity in preparation on the part of practitioners. It would be wrong for practitioners to read every line of material disclosed on a "just in case" basis. Practitioners should make decisions on relevance as they go through material. Material that on investigation is clearly not going to assist or damage the client's case can be skimmed over. This point is referred to in the next section of the judgment. [38] It was also an error of law for the Agency not to follow a Panel direction. It is the Agency's explicit obligation in any reconsideration the Panel has directed it to make, to take into account the reasons for the direction and any matters set out by the Panel. It is stated at s 58(3):If the Agency receives a direction to reconsider, it must reconsider the decision, taking into account the reasons for the direction and any matter set out by the Review Panel.To fail to take into account a matter set out by the Review Panel was in these circumstances a failure to take into account a relevant matter. It was an error of law by the Agency.Conclusion on issue of proportionality[39] Thus, the approach of the Agency, which appeared on the face of the second decision to make compensation proportional to the seriousness of the charge, was wrong. The Panel did not misread the Agency's second decision, and was not in error in finding that its approach was manifestly unreasonable and an error of law.Second ground of appeal – Error in the Panel allegedly adopting a "no stone unturned" approachInterpretation of the second Panel decision[40] Mr Taylor in this part of his submissions focused on the following four bullet points at paragraph [23] of the second Panel decision:• as emphasised in its decision dated 13 March 2006, the Panel considers that the listed provider has taken her role as a professional seriously, and her diligence has resulted in benefits to the Applicant.• the listed provider would be in breach of her obligation to her client if she failed to disseminate thoroughly all the material presented to her;• it seems obvious that a decision that some of the material is not necessarily fundamental to her client can only be made after the material has been read;• it is manifestly unreasonable to suggest that the listed provider read the material selectively: a skim read of the material may have exposed her to a possible claim of counsel incompetence; and• the Agency has erred in law in exercising its discretion on the basis that the number of hours required for preparation must be proportionately related to the number of charges faced, or to the level of an accused's culpability. [emphasis added][41] It was submitted that these propositions effectively permitted counsel to "leave no stone unturned", and directed the Agency to pay all the hours involved insuch circumstances. I observe that there is a typing error in the second paragraph in that "disseminate" makes no sense. It would appear to have been intended to read "assimilate". Mr Taylor submitted that it was an error of law to direct that practitioners should assimilate, in the sense of read line by line, all disclosed material. [42] Ms Wilkinson-Smith for the practitioner did not really take issue with this, but disputed Mr Taylor's interpretation of the words used in the Panel's second decision. She did not argue that the Panel should require an in-depth perusal of the entire file. She noted that the definition of "assimilate" in the Concise Oxford Dictionary is "absorb (information etc.) into the mind." and that this could accommodate a selective process of reading. She pointed out that the Panel can hardly be suggesting that every line of every page be read, as on her calculation even allowing for 150 hours, this would leave only 40 to 45 seconds of reading for each page, which hardly provided for an in-depth reading of the entire file. She submitted that instead of the word "disseminate", the word can be substituted for "read". She submitted that this did not mean "read thoroughly". [43] However, the Panel decision must be interpreted on the face of the words used in the decision. The decision is that the listed provider would be in breach of her obligation to her client if she failed to assimilate or read "thoroughly" all the material, and that it was manifestly unreasonable to suggest that the listed provider should "read the material selectively". Thus, the Panel decision, which will stand as a precedent, can be read as deciding that a listed provider should read all disclosed material thoroughly, with no selectivity. This was consistent with its first decision where it stated at para [30] that it was entirely appropriate for the listed provider to "read all the material disclosed", and that it was "appropriate for the listed provider to read all the material provided " (para [33]), (emphasis added). [44] The Panel may not have meant that all material should be read thoroughly, but this is what it effectively said in its decision. It may be, as Ms Wilkinson-Smith suggested, that the Panel did intend to allow for some selectivity. But the decision stands for the opposite proposition, and its words constitute the precedent for the Agency.[45] Therefore, the question that arises is whether the Panel's direction that all disclosed material should be read thoroughly was an error of law.Error of law[46] It would be unwise to attempt to categorise what constitutes an error of law. However, it is clear that a decision is wrong in law if the provisions of a statute or regulations made under it are wrongly applied or interpreted, or if an applicable common law or equitable principle is wrongly ignored or wrongly addressed, or if a relevant consideration is not considered, or an irrelevant matter taken into account. It would be an error of law to make a wrong assumption about the ethical duties of a legal practitioner. [47] Rule 3.01 of the New Zealand Law Society Rules of Professional Conduct for Barristers and Solicitors provides that:A practitioner shall charge a client no more than a fee which is fair and reasonable for the work done, having regard to the interests of both client and practitioner.The commentary to r 3.01 reads:Charges by a lawyer for professional work shall be calculated to give a fair and reasonable return for the services rendered, having regard to the interests of both client and lawyer. Charges shall take into account of all relevant factors, including: (a) the skill, specialised knowledge, and responsibility required (b) the importance of the matter to the client and the results achieved (c) the urgency and circumstances in which the business is transacted (d) the value or amount of any property or money involved (e) the complexity of the matter and the difficulty or novelty of the questions involved (f) the number and importance of the documents prepared or perused (g) the time and labour expended (h) the reasonable costs of running a practice.This commentary appears to be focused on civil work rather than criminal work. It demonstrates the need for practitioners to use their professional knowledge to spend time only where it is necessary to do so in the client's interest. A "no stone unturned" approach can be inappropriate, and indeed, if a client is charged for it, can constitute a breach of the practitioner's professional obligations. A practitioner should not charge for wasted time, and the Agency is entitled to do its best to ensure that it does not pay for wasted time. This is where judgment by the practitioner must be exercised. In civil work certainly, the importance of the matter and the documents can be relevant to the level of work (although it is only one of a number of factors). In criminal work, given the presumption of innocence and the severe consequences of convictions, it is difficult to apply the concept of "importance". On a criminal legal aid brief a practitioner has to assume that everything of relevance to avoiding conviction is important. However, the concept of relevance applies to both civil and criminal work. In neither case should a practitioner charge for irrelevant work that does not assist the client. To so charge would be a breach of the practitioner's ethical and fiduciary obligations to the client. Stones that, after a quick look can be seen to be clearly irrelevant, can be left unturned. [48] If material disclosed clearly related to an area of offending that could not possibly involve the practitioner's client, it could be quickly skimmed through. For instance, material that related specifically to a personal event relating to another accused, not in any way connected to the client or the subject of the client's charge, could be passed over once the nature of the contents of that part of the material was understood. The workability and, indeed, the integrity of the system requires practitioners to carry out such a selective reading process with competence and honesty. That is a given. The Agency is not to be criticised for being vigilant to ensure that practitioners do not unnecessarily run up time. This may be a very difficult task for the Agency, if faced with apparently arguable assertions from practitioners that the work they have done is necessary. [49] A practitioner faced with a very large volume of disclosed material has an obligation to be aware of the nature of the contents of that material, to ensure that any material that may be relevant to the practitioner's client is identified, and then to read material that may be relevant as thoroughly as is appropriate in thecircumstances, to ensure that all information that might exculpate, or indeed inculpate the client, is understood. As I have said, this does not mean that every line of the documents disclosed in bulk should be read on the off chance that it might contain some information that helps or hinders. Judgment must be exercised by practitioners, and the Agency is entitled to insist upon this. [50] The number of charges faced by an accused could be relevant to the issue of the amount of preparation, not as a proportionality rule, but simply because the number and nature of charges may mean that certain areas of disclosure can be disregarded. It would be wrong, for instance, for a practitioner to simply say, "Well the Police will only disclose material that is relevant and may help, and therefore I need to read every line." This is because the Police may well not have closely examined all material disclosed to ensure relevance to a particular accused. [51] The Agency is required under s 92 of the Act as part of their function to administer schemes in " as consistent, accountable, inexpensive, and efficient a manner as is consistent with the purpose of this Act". Accepting that the purpose of the Act is to ensure access to justice, access to justice does not require practitioners to waste time reading unnecessary material. The Agency has the difficult duty of trying to ensure that the public funds it administers are not wasted. The Agency, therefore, has a duty to closely monitor the relevance and efficiency of claimed work, and this is the issue that it has struggled with in this case.Conclusion on "no stone unturned" approach[52] Therefore, I accept Mr Taylor's submission that a "no stone unturned" approach could be an error of law. An indiscriminate approach, which pays no heed to relevance and involves legal charges for irrelevant work, could indeed involve a breach of the practitioner's fiduciary obligations to the client. It is an error of law for bodies administering the Legal Services Act 2000 to not properly weight the need for schemes to be administered inexpensively and efficiently pursuant to s 92. While I have found that the Agency has gone too far in relation to the issue of proportionality, I do not consider that it made an error in adopting an approach that itdid not have to automatically pay for the assimilation or reading of all material by the practitioner. [53] It follows that the Panel, in the second, third and fourth bullet points at paragraph 23 of its decision which assume on their face that all material must be actually read and that even selective reading or skim reading is inappropriate, was in error. The statements are too general. All material disclosed should not be read as a matter of course. The contents of all the material need to be understood, but once understood, selectivity can be practised. Irrelevant material, if it exists, can be skimmed, or if quite clearly of no use, put to one side. [54] I consider that the Panel made an error in directing that all material should be read "thoroughly". This was an error of law. It showed a misunderstanding of the ethical and fiduciary obligations of practitioners, which are to only charge for work which is relevant to the task of the defence. I will consider the consequences later in this Judgment.Third ground of appeal - Did the Panel improperly substitute its decision for that of the Agency?[55] This objection to the Panel's decision, is that it substituted its own view of the merits of whether 150 hours was reasonable for that of the Agency, who had assessed it at fifty hours, without properly limiting its consideration to manifest unreasonableness or error of law as set out in s 54(1). [56] Much of the Panel's second decision deals with the background facts and the submissions and general propositions of law which are not at issue. The discussion of the merits of the review is relatively short and contained in four paragraphs, which have been referred to earlier in this Judgment. [57] The Panel stated, at para [21]:Thus, the essential question to be posed is how much work by the listed provider was necessary in order to ensure that the applicant was served properly.[58] Mr Taylor submitted that the Agency is concerned at a pattern of Panel decisions to the effect that if a provider has done a certain number of hours and seeks an amendment of grant for that number of hours, the Panel will find the Agency manifestly unreasonable in not paying the provider for the hours worked and claimed. I accept that on appeal, the Panel cannot simply approach a matter afresh and substitute its own view for that of the Agency. That approach is not permissible:Legal Services Agency v Fainu (2004) 17 PRNZ 433, 440. [59] However, this is not what the Panel did (save for its order that the applicant is to be granted legal aid for 150 hours to which I will refer later in this Judgment). The Panel did not review the facts and substitute its own opinion prior to its reversal of the Agency's decision. Rather, it approached the Agency's decision from the point of view of principle and found it to be, for very specified reasons, manifestly unreasonable and founded on an error of law. I have already found that the Panel correctly identified the fact that a rigid application of a concept of proportionality, or reading only material relating to the particular charge that one of many accused faces, was wrong in principle. I have also found that it was wrong, as a matter of principle, for the Panel to accept that all the material should be assimilated or read, rather than requiring a practitioner to exercise judgment as to what should be read because it was relevant, and what did not need to be read because it was irrelevant. I note also the Panel had previously correctly identified earlier in its decision the general matters of law that arose in Panel reviews. [60] So I do not accept that this was a situation where the Panel simply substituted its decision for that of the Agency, as was the case in Legal Services Agency v Fainu. It correctly identified an error of law (reliance on proportionality) in the Agency's decision, and incorrectly identified another error of law (the need to read all material thoroughly). [61] However, in terms of the 150 hours allocated by the Panel at the end of its decision, there is force in Mr Taylor's submission. While having found on a principled basis that there was an error of law in the Agency decision, the Panel then substituted its decision as to hours for that of the Agency, and did not give anyparticular reasons why 150 hours rather than any other number of hours was appropriate. [62] The wording of the Panel decision on the appropriate hours was as follows:The Panel reverses the Agency's decision. The Applicant is to be granted aid for the purposes of reading the material disclosed by the Police. This amounts to 150 hours.Section 57(3) of the Act states:Every determination by the Review Panel must be accompanied by a brief summary of the reasons for it.As can be seen, there are no reasons expressly given for the decision by the Panel to grant legal aid for the purposes of reading the Police disclosure material of 150 hours. [63] Mr Taylor submitted that this was an error of law on the part of the Panel. Ms Wilkinson-Smith submitted, on the other hand, that the reasons for the grant of legal aid of 150 hours could be elicited from the earlier statements of the Panel. [64] The Panel did say at the first bullet point at paragraph [23] that it considered that the listed provider had taken her role as a professional seriously, and that her diligence has resulted in benefits to the applicant. There was undoubtedly a proper factual basis for the Panel to reach this conclusion. The correspondence from the practitioner showed her to have approached her professional role with care, and there was evidence that her perusal of the disclosed material had given rise to certain specific benefits to her client. This is not, however, any explanation for how the Panel could have concluded that 150 hours was the appropriate time for preparation. [65] Mr Taylor raised as a particular issue in this appeal the need for allocations of legal aid to be proportionate amongst co-accused facing a multiplicity of charges. In this case my attention was drawn to the fact that counsel acting for Mr Haslam who faced only one charge had, by the Panel decision, been granted more time for preparation than counsel for the other accused, who faced many more charges. It is understandable that this is a matter of concern to the Agency. It is entitled to takeinto account the comparable estimates of time required by counsel involved in the same case in assessing what is reasonable. If other experienced counsel have given assessments of preparation time, those other assessments may well be relevant when the Agency considers the particular allocation of time for one practitioner, which appears to be markedly different from the other estimates. I accept that the estimates by other counsel regarding other accused must also be treated with caution by the Agency or Panel. In themselves they may be underestimates or overestimates, and it is difficult for the Panel to understand the comparative complexity of the cases against the various accused. However, those experienced in making these sorts of assessments ought to pay some heed to the estimates of other practitioners. There may well be a useful guide as to the fair range of hours of preparation required. It will be up to the Agency as to what weight, if any, can be placed on them. [66] This was not addressed by the Panel at all in its assessment of the 150 hours. Indeed, it is not clear that it has made any assessment of its own of the reasonable time for preparation. It is possible, as Mr Taylor has suggested, that it has simply accepted the practitioner's request, without applying its own judgment. This may not have been the case, but the absence of reasons leaves the issue in doubt. This is why the provision of reasons by the Panel is important. It is also possible that it relied on the erroneous assumption that all disclosed material should be read thoroughly, without any selectivity. [67] The Agency, and indeed the Panel, is not discharging its duty under the Act by simply accepting an assessment of preparation time by the practitioner without applying its own objective assessment to the hours required, taking into account the practitioner's views. This is clear from the history of the Act, which I have set out earlier in this Judgment, which shows a move from legal aid being provided on the basis of a percentage of lawyers' fees, to legal aid being granted on the basis of a grant of a proper fee for the particular legal services. For the Agency or the Panel to do no more than accept the practitioner's statement as to the appropriate time required for preparation is to revert to the rejected approach of practitioners being awarded legal aid on the basis of a calculation based on actual fees charged, rather than an assessed proper fee. This was the approach that was deliberately changed by Parliament with the 1991 legislation.[68] A failure to provide reasons can be procedurally unfair and amount to an error of law: see Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 (CA). While there is no general and invariable duty to provide reasons, here there was a specific statutory requirement to do so: s 57(3) Legal Services Act 2000. In such a case the reasons must show that the decision-maker successfully came to grips with the main contentions advanced by the parties and must "tell the parties in broad terms why they lost or, as the case may be, won": de Smith, Woolf and Jowell Judicial Review of Administrative Action (5 ed 1995) 9-49, citing UCATT v Brain [1981] IRLR 224, 228. [69] As stated in Lewis v Wilson & Horton Ltd [2000] 3 NZLR 546 paras [74] – [87] in a judicial context, reasons are desirable to ensure open justice, to ensure that the lawfulness of what is done can be assessed, and to ensure discipline on the part of the decision-maker as a protection against wrong or arbitrary decisions. In this case in particular the reasons must be adequate to enable a proper understanding by the parties and on appeal, of why the decision was reached: see Ansett Transport Industries (Operations) Pty Ltd v Wraith (1983) 48 ALR 500 (FCA); Trompetter v Nursing Council of NZ HC WN CP750/92 3 February 1994, Greig J; Patel v Removal Review Authority HC WN AP36/94 14 July 1994, Eichelbaum CJ. [70] The Panel made an error of law in assessing preparation time of 150 hours for the practitioner without giving reasons. It may have accepted without applying its own consideration of a fair fee for the work, the practitioner's request. It may alternatively have calculated time on the erroneous basis that all material should be read thoroughly without any selectivity, when appropriate. I express no view on whether 150 hours was the appropriate preparation time or not. This is a matter that needs to be assessed by the statutory authorities to whom the Legislature has assigned this task. [71] The decision to grant aid for 150 hours was undoubtedly a determination by the Panel. There is an error of law by the Panel in that it has not provided reasons and may have just accepted the practitioner's estimate without analysis, or applied the wrong principle to its calculation.Consequences[72] Section 59 of the Act states that an appeal must be dealt with in accordance with the Rules of Court. The Rules of Court are not defined. Those rules must be the High Court Rules ("the Rules"). Rule 718A of those Rules sets out the powers of the Court on appeal. That rule provides that a Court may make any decision or decisions that it thinks should have been made, or direct a decision-maker to rehear the proceedings concerned or consider or determine any matter that the Court corrects (r 718A(1)(a) and (b)). [73] The appeal in this case was not directed specifically against the decision of the Panel to award 150 hours' preparation, but rather against the overall decision reversing the Agency's decision. I have rejected the general appeal against the Panel's decision reversing the Agency's decision, as I have found that the Panel was correct in identifying manifest unreasonableness and an error of law on the part of the Agency. I have, however, identified an erroneous statement of principle in the Panel decision, and found that there was an error of law in the decision directing 150 hours' preparation without reasons. I am satisfied that I can direct the Panel to reconsider an aspect of its decision. [74] I am reluctant to set out any specific approach for the Agency or Panel, which undoubtedly have very considerable workloads and deal with all sorts of facts and circumstances. However, in considering the appropriate hours the following matters should be taken into account by the Panel or the Agency, and it will be up to those bodies as to what weight, if any, should be placed on them: a) The views of the practitioner on the level of preparation required. b) The assessment of the members of the Panel or the Agency from the experience of its members of the appropriate time required to consider the volume of material, taking into account: i) the relevant issues that may arise in the case;ii) the need for a practitioner to consider all documents disclosed by the Police as to their relevance; iii) the need for counsel to read relevant material with whatever level of thoroughness is required in the circumstances; iv) the obligation on counsel not to claim for time wasted in reading material that should have been put to one side or skim read because of a discernible lack of relevance; and v) if there are multiple accused, the estimates of other counsel for other accused. This is not intended to be a definitive list.Conclusion[75] I find that the Panel correctly identified manifest unreasonableness and an error of law on the part of the Agency in respect of proportionality, and correctly reversed the Agency's decision on this point. However, I find also that the Panel in part of its decision made an error of law itself, where it stated that practitioners must read thoroughly all material disclosed to them. [76] If the Panel had simply reversed the Agency's decision on the basis of the error of law as to proportionality, and then proceeded to determine the number of hours that were appropriate for the particular case on a reasoned basis without an error of law, I would have upheld its decision. However, it made an error of principle in requiring all material to be read thoroughly. It made an error in allocating the 150 hours requested by the practitioner and failing to set out any reasons for doing so. It may have applied the wrong principle, and is open to the criticism from Mr Taylor that it has simply accepted the practitioner's request. [77] I direct that the Panel reconsider and determine the issue of the number of hours of preparation that should be allowed to the practitioner, with reasons. The Panel may feel able to reach the decision on this point on the material already beforeit. This will turn on its being satisfied that it has the appropriate material before it to do so. If it is not able to do so, it should direct the Agency to do so.Result[78] The appeal is allowed, and the Panel is to reconsider and determine the issue of what number of hours should be allowed to the practitioner, not applying a proportionality approach, but also not assuming that all material should be read thoroughly. It is to give a reasoned decision. Alternatively, if it is not able to so determine the issue of the appropriate hours itself, it should direct the Agency to reconsider its decision, giving reasons for that direction. [79] Because I am granting relief on a basis different from that proposed by the parties, I reserve leave to the parties to seek further directions.Costs[80] Both the appellant and the respondent have achieved a measure of success on this appeal. I have been assisted by Ms Scholtens' submissions for the New Zealand Law Society. This may well be a case where costs should lie where they fall. However, I have no final view on this matter, which I reserve. If any party wishes to apply for a costs order, it should make submissions within 14 days. Any submissions in reply should be made within a further 14 days, with the submissions of the person seeking costs strictly in reply to be made within a further seven days. The parties may seek a telephone conference if they wish to pursue costs, and seek a variation or addition to this timetable.. Asher J