Dialogue: Secrecy on settlement sets a bad example

The secret payout to John Yelash for a remark made by Helen Clark was an abrupt and unwelcome departure from the trend towards more open government, writes PATRICIA SCHNAUER*.

What price secrecy? Last week it cost $55,000. That is what taxpayers paid John Yelash. Why? Because the Prime Minister called Mr Yelash a murderer when he was convicted of manslaughter.

Initially, the exact details of the deal were unknown because of a confidentiality clause. The Opposition cried foul, saying the settlement was not Government business and taxpayers should not be liable.

The cabinet disagreed and said Helen Clark was acting in her capacity as Prime Minster when she made the statement. Therefore, taxpayers will foot the bill.

It is a borderline case. According to one view, the Prime Minister was checking on the credentials of a minister (Dover Samuels) to continue in office, which is clearly Government business.

Conversely, entering into discussions with a person with a criminal conviction is a strange way to conduct Government business when there are many state agencies which could have made more conventional inquiries.

But this matter raises a wider and important issue: why should New Zealanders tolerate confidentiality clauses in settlements which they are paying for? In a modern and open democracy the public has a right to know.

Statements by the Attorney-General, Margaret Wilson, that the Government did not initiate the confidentiality clause are a smokescreen. Even if the Government did not initiate the clause, what right did it have to enter into a secret deal on behalf of all taxpayers?

Furthermore, if confidentiality was not important, why does the Government now say it may require Mr Yelash to give part back of the settlement money for breaching the very confidentiality clause it says it never cared about in the first place?

Confidentiality clauses are a device behind which any Government will happily hide. They are a first line of defence in declining to reveal the full and potentially politically damaging facts inherent in such settlements.

Certainly, if the Prime Minister was paying Mr Yelash personally to settle a private claim, she would be entitled to keep the settlement confidential. But when public money is used to settle a defamation claim brought against her by a member of the public, it is only right that full disclosure be made.

This approach is consistent with open and transparent government. It is also consistent with the increasing reluctance of the Judiciary to maintain secrecy.

In recent months, we have seen a High Court judge question whether first-time offenders should receive name suppression as part of the police diversion scheme. The judge reaffirmed the basic principle that what goes on in court is done in public.

Parliament is the highest court in the land. The Government controls that court. To settle a legal action brought against it by imposing or agreeing to a secret confidentiality clause flies in the face of what the Government's own judicial officers are saying.

Surely the public's right to know how its money is being spent should be respected by the Crown and outweighs any government right to privacy.

Full disclosure of such settlements by the Government is further consistent with the comments of the Chief Ombudsman, who last year called for the development of an official information culture.

True, his comments were made because some Government departments were reluctant to respond to requests under the Official Information Act. But they are still appropriate here.

If the leadership of the country agrees to hide behind a veil of secrecy through confidentiality clauses, it is unlikely that Government departments will respond positively to the Ombudsman's call. Such behaviour does not instil public confidence in the processes of government.

A complainant such as Mr Yelash has no grounds to claim any right to confidentiality in any settlement. If someone sues the Government, he or she takes the consequences and that includes publicity.

Any pre-settlement negotiations can, of course, be confidential and in private, but once the settlement is reached using taxpayers' money, it should be made public. If a person sues and does not settle, he or she ends up in court, where every aspect of the case is heard in public and reported by the media.

Accordingly, any government has much to gain from having the matter swept under the carpet by a confidentiality clause.

This is particularly so where there is doubt whether the taxpayer should be responsible.

In Mr Yelash's case, if his confidentiality clause went further and required him to forfeit $35,000 of his $55,000 settlement should he breach the confidentiality agreement, this only reinforces how determined the Government was to keep the settlement secret.

If it's good enough for the Chief Ombudsman to rule that the public has a right to know the size of golden handshakes paid to senior public servants by the Government, it is good enough for the public to expect that the Government will not hide behind a confidentiality clause on settlements similar to that of Mr Yelash's.

Public cynicism on this issue will only be increased if the Government reaches a settlement with Christine Rankin and then seeks to rely on a confidentiality clause to withhold details. But, as in all things political, only time will tell.

* Patricia Schnauer, a former Act MP, is a public law specialist.