Deputy Solicitor General Cheryl Gwyn, representing the Government, told the court that the changes "streamlined'' the old legal aid system.
Ms Gwyn cited a 2009 report by Dame Margaret Bazley which found administrative costs had reached $20.4 million and become a driver of legal aid expenditure.
"It needs: a stronger direction; a customer focus; new machinery; a quality system for lawyers; and a more flexible approach to the procurement of services,'' the report said.
The old system was also open to abuse from dishonest lawyers and their clients, which threatened to bring the legal profession into disrepute.
"The damage that incompetent and unscrupulous lawyers can inflict on their unsuspecting clients _ and the potential to destabilise the court system, with resulting wasted expenditure of public money - is simply too great,'' it said.
Ms Gwyn told the court the costs of legal services set out in the new fixed-fee regime were fair and based on hundreds of cases recorded in the Ministry of Justice's system.
However, the fixed fees were not inflexible and matters such as excessive travel costs for Christchurch lawyers as a result of last February's earthquake could be accommodated.s
Fees could also be increased for cases which took a long time or were complex. These could include cases with multiple charges, multiple accused, vulnerable clients, or clients with communication difficulties, she said.
Rodney Harrison QC, lead counsel for Criminal Bar Association, this morning laid out the main points of the case on behalf of the association, which represents about 500 members. The written submission was drafted by more than 30 criminal lawyers, including eight QCs.
The association was seeking to review the fixed-fee regime and injunct the series of legal aid grants and funding scheduled to follow the fee change, he said.
"The Criminal Bar Association is not here merely to protect the prospective financial interests of members ... It is concerned very much as well about the interests of the prospective clients, the persons who all may be facing very serious charges.
"They have a right, under the Bill of Rights Act, to an effective and properly resourced defence.''
He argued the fixed fees were a result of a "simple government directive'' to cut legal aid costs by 10 per cent.
``[The changes have been] implemented in an environment where the Government requires a cut of 10 per cent to retain sustainability.''
Mr Harrison said the association was not seeking to challenge the ministerial decision, but to challenge the 10 per cent directive as "unlawful''.
The new fee structure would deny prospective clients their right to a properly resourced defence, and was "inadequate'' when it came to complex cases, he said.
Mr Harrison told the court there was no previous indication that legal aid fees had been too high, which would justify the cut fees.
"If you can make out a case of insufficiency you are entitled to have your amendment accepted and granted on the merits.''
He cited a practising lawyer's affidavit, saying legal aid in his practice was "marginally viable'' under the old regime, but the new fixed fees were "likely to sound its death''.
The new fees were inconsistent with the statutory regime, which required access for all to "high quality'' legal aid services, he said. The new structure imposed on lawyers' ability to provide the necessary services, he said.
The hearing, before Justice Alan Mackenzie, will resume tomorrow.
