Compensation - everyone wants it

When the owners of an Auckland apartment complex plagued with leaks lost a $20 million claim against the Government, sighs of relief may have been heard down the corridors of Parliament.

The lawsuit against the Attorney-General, on behalf of the former Building Industry Association, was a test case to determine whether the Government body had a legal duty to the $9 billion building industry. If successful, it could have opened the floodgates to similar claims.

The claim by 153 apartment owners in Manukau's Sacramento complex was upheld by the High Court last February, but struck out by the Court of Appeal in December.

The following week, New Zealand's second-highest court delivered another blow to the Government - upholding an order to pay $130,000 to five prisoners held illegally in solitary confinement in the now defunct Behaviour Management Regime unit at Auckland's Paremoremo Prison.

The Government quickly distanced itself from the decision, with Justice Minister Mark Burton assuring their outraged victims they had the right to lay claim to the compensation.

Any money awarded to the prisoners would be placed in a trust to enable victims to lodge claims against it, but it would be undemocratic to withhold compensation, he said.

"The solution of simply denying compensation to inmates, the Government's first and preferred option, would be contrary to New Zealand's international obligations and contrary to the practice in other Western democracies."

During the hearing, Justice Susan Glazebrook said it was not the court's job to consider the implications of the ruling.

"If it is illegal, it is illegal. It does not matter if it is widespread or embarrassing," she said.

Widespread it may have been, with the prisoners' lawyer, Tony Ellis, estimating another 200 inmates are in the running for $4.5 million compensation.

The Government has appealed the ruling to the Supreme Court, but so have the inmates, based on the Government's failure to hold an inquiry into the unit, Mr Ellis said.

"We would have never had to have a court case if we had a prompt and independent inquiry," he said before lodging the appeal.

If granted, a Supreme Court hearing would also examine the Prisoners and Victims Claims Act, introduced to ease public anger over the payouts.

The legislation was retrospective and undermined the original High Court decision, Mr Ellis said.

"This is a short-cut method stacked in favour of victims. [But] prisoners may get some of the compensation."

The prisoners are only one group suing the Government. There are also former hospital patients, victims of crime and former Army cadets.

Child Poverty Action Group won the right to take legal action against the Government over "discriminatory" policies last November in a landmark ruling by the Human Rights Review Tribunal.

The lobby group claims aspects of the Government's Working for Families package discriminate against thousands of children through its current Child Tax Credit and the soon-to-be-introduced In Work Payment.

The Haemophilia Foundation is in negotiations with the Government over haemophiliacs who contracted hepatitis C during the bad-blood saga.

Although the Government may prefer secret negotiations to having compensation claims determined by the judiciary, out-of-court settlements are not welcomed by the public.

Former Act MP and public and constitutional lawyer Stephen Franks says former Attorney-General Margaret Wilson was "pilloried" in 2000 for her secret settlement to compensate nine prisoners mistreated at Hawke's Bay's Mangaroa Prison to the tune of $325,000.

"There was such an uproar, I think they decided that in future they had to fight it through the courts," he said

"Now the judges are making these decisions and they still have no better principle as to what it should be."

The increase in compensation claims was due to New Zealand becoming a more backward-looking society, Mr Franks said. Strict time limits on claims had also been relaxed, enabling more cases to get to court.

"One of the things we're doing as a society now is raking over very long dead ashes of issues, and I've got a real concern that it's hard to get justice at a distance," he said.

There was no evidence that compensation achieved anything or helped people close the wounds of the past.

"All this 'lawyer-isation' of misery is doing is encouraging people to exaggerate their loss and forget about moving on," Mr Franks said.

"It's encouraging people to cry over spilt milk all the time and to keep looking to blame everyone other than themselves."

There was no science used by the courts to determine compensation.

"It's just lick your finger and stick it in the air. It doesn't relate to anything anyone has lost."

Attorney-General David Parker says when proceedings are filed, the Government is no different from any other party and claims must be decided using law and legal process.

"The Government can and does consider alternative settlement options if there appears to be a substantial basis to a claim," he said.

"In certain instances the Government has taken steps such as establishing an inquiry or appointing a retired judge to provide a report and make recommendations."

But Mr Franks says there are no specific laws covering compensation and judges are using general laws to determine claims.

"Here's a bunch of judges making decisions that ultimately elected people have got to make about resources.

"In a sense, the judges have usurped Parliament by claiming the right."

It was "simple cowardice" by politicians that the Government had not reminded the judiciary its job was to apply the law, not create it.

Government in the gun

Other current claims against the Government include:

A $2.25 million claim against the Corrections Department by Susan Couch, the only survivor of William Bell's December 2001 killing spree at the Mt Wellington-Panmure RSA, and Tai Hobson, whose wife was one of his three victims.

A $10.62 million lawsuit against Green Lane Hospital by 118 families whose children's and babies' hearts were kept by the hospital without consent.

A $80,000 claim by convicted paedophile Barry Grant Brown against Wellington police, who circulated leaflets with his photograph to warn neighbours he had moved into suburban Strathmore, prompting physical and verbal assaults on him.

Claims by about 120 former Porirua Hospital patients for up to $500,000 compensation each for alleged mistreatment at the state mental health facility in the late 1960s and 1970s.

A $400,000 claim against the Defence Force by a former student of the Waiouru army cadet school who alleged he was abused.

- NZPA