Legal aid

We revealed recently that your new council is spending millions on planning contractors -
there's too few staff left. Edward Rooney opens the books at another city department forced to outsource public work. 
Auckland Council has outsourced almost $9 million worth of legal work in the first six months of its troubled existence.
In response to a request by The Aucklander, the general counsel for the new regionwide council, Wendy Brandon, confirms external legal providers have been paid $7,663,490.24 from November 1 until the end of April. That figure excludes GST "and disbursements".
Disbursements literally means taking money from a purse and, in legal terms, it covers allowances, compensation, costs, defrayments, emoluments, expenses and fees.
Ms Brandon points out a substantial proportion of the expenditure is on legacy matters, or legal issues, carried over from previous councils, some of which were taking each other to court.
"For example, that amount includes fees and costs associated with the resolution of 'inter-council appeals' and other appeals from the decisions of the eight former councils, including the ARC, the costs associated with ongoing litigation and other matters inherited from the eight former councils," she says.
The top four external providers on a fees basis are: Simpson Grierson, Buddle Findlay, Brookfields and Kensington Swan, in that order.
The disclosure follows revelations in The Aucklander that the council has been paying almost $2 million a month to outsource planning work, even during a slow period of construction.
Deputy Mayor Penny Hulse blamed Local Government Minister Rodney Hide and the Auckland Transition Agency for a poorly delivered council structure.
"We're in here just trying to make this damn thing work," she said.
When informed of the outsourced legal costs by The Aucklander this week, Mayor Len Brown says: "There was always going to be substantial legal costs when setting up the Auckland Council.
"However, it is important to remember that we have been able to reduce our inherited rates increase from more than 9 per cent down to less than 4 per cent.
"This is due to finding $81 million of savings across the organisation, including the legal area through initiatives such as cost centralisation, consultancy rate reduction due to increased economies of scale and greater efficiencies in procurement."
However, Home Owners' and Buyers' Association president John Gray - representing Auckland homeowners seeking redress for so-called leaky buildings - says the amount of outsourced legal work is hard to fathom.
"I'm staggered by the amounts you have uncovered," he says. "They must have a cost target that they have tried to meet across the board, but it's hard to get a grip on the economics of their approach.
"Effectively, they are contracting out to lawyers who have a vested interest in prolonging the proceedings. It's a bit dubious, really."
Mr Gray believes leaky homes need not cost ratepayers so much.
"I'm not sure you could sheet home the whole $9 million to legal defences of claims, but the council is still spending a lot of time, effort and money on what we believe is the indefensible.
"We have been pleading with councils to take a less litigious approach."
The head-count of the current Auckland Council legal team is 31. There were 64 full-timers employed in the legal teams of the former councils.
Ms Brandon says the team has one fixed-term contractor covering a vacancy. The term of the contract is six months from December 2010.
There are also two senior solicitors on secondment - one from Simpson Grierson working four days a week; and one from Buddle Findlay on three days a week.
"Both are covering vacancies. In one case, we have advertised the position twice but have had no success attracting a suitable applicant, and the other vacancy has been filled by an outstanding candidate who is a New Zealander returning from the United Kingdom, but who is unable to start until September."
Ms Brandon says she expects the legal spend to be significantly lower by this time next year as the legacy cases from the former councils are settled.
Picture flying moneybags
Home Owners' and Buyers' Association president John Gray predicts the legal expenditure will rise sharply this year once homeowners have the chance to review and reject a Government deal on leaky homes.
"Because of the long-awaited financial assistance package from the Government, a lot of people are sitting and waiting to see if that suits them. If it doesn't, then litigation action will peak later this year.
"We don't think many people will opt for the financial package. We think it's an attempt to ring-fence council liabilities."
Mr Gray says homeowners do not want to be costing so much public money. "We feel for councils and ratepayers. The cost burden on ratepayers is most unfortunate, but they are the last men standing in some respects. All the people responsible, the builders, the designers, the sub-contractors, they are all dead or departed.
"Clearly, the council spends an awful lot of money. I spoke to [former Auckland City mayor] John Banks some time ago and he told me the old Auckland City Council had spent $4 million in the preceding year on legal fees relating to leaky building claims. Unfortunately, that legal bill is set to rise further."