Agency axed as Govt acts on legal aid

Justice Minister Simon Power. Photo / Mark Mitchell

The Government will shut the state agency responsible for legal aid in a rapid response to Dame Margaret Bazley's damning report, which found the failing system is being exploited by corrupt lawyers.

Justice Minister Simon Power said last night that the Legal Services Agency would be closed as the Government took urgent measures amid the fallout from Dame Margaret's report.

Dame Margaret found the agency's administrative costs were out of control and it was "paralysed" in dealing with lawyers.

She recommended that the functions of the agency, which has 245 staff and a budget of more than $130 million, be taken over by the Ministry of Justice.

Four members of the agency's board, including chairwoman Carole Durbin, resigned after Mr Power wrote to them, asking "whether they were confident they had the skills for a new environment".

The others who resigned from the six-member board were Jane Taylor, Alister James and Dr Pare Keiha

Mr Power also increased pressure on the legal profession to clean up its act by reducing the deadline after which the Government will step in and take over as regulator if the Law Society cannot fix legal-aid corruption.

He cut the time limit to two years from the three years Dame Margaret recommended.

Dame Margaret's report said the justice system was being undermined by more than 200 corrupt lawyers rorting legal aid.

Retired High Court judge Sir John Hansen will chair the new four-member Legal Services Agency board, and the other new appointee is Wellington company director John Spencer.

They join present board members Jane Huria and Ross Tanner, who were appointed in September.