We're paying for MPs' legal bills, but it's a secret

By Claire Trevett

Nick Smith. Photo / Mark Mitchell
Nick Smith. Photo / Mark Mitchell

Taxpayers are increasingly covering the legal costs when MPs are sued - but MPs can keep the use of public money for their defence secret under Parliament's rules.

Among those whose legal bills have been at least partly paid from the public purse are National's Nick Smith for the defamation case against him by timber preservative company Osmose.

Dr Smith said the legal costs totalled about $270,000, but did not respond to a request for the amount paid by the public.

The sum is expected to grow - a court date is set for mid-year and Osmose is seeking a multi-million dollar damages award.

Documents recently leaked to the Herald revealed National MP Gerry Brownlee had also requested reimbursement of up to $48,000 for the civil assault case taken against him by environment activist Neil Abel in 1999.

Yesterday he said the request was refused and acknowledged his case was "not appropriate" for using taxpayers' money.

While Dr Smith has admitted some public money is going toward his legal costs, Mr Brownlee's attempt to have his legal costs repaid out of the public kitty was unknown until the documents were leaked.

Legal costs for cases against ministers have long been paid for by the taxpayer in most cases, but it is rare for ordinary MPs to have their costs paid.

Before a change to the rules in late 2001, MPs were left to foot their own legal bills. They can now be reimbursed in some cases, but the public has no power to find out when it has happened because, unlike ministers, other MPs are not subject to the Official Information Act.

Labour MP Trevor Mallard - who has paid for several legal battles of his own - has called for public disclosure if taxpayers' money is sought or used in such cases. He said Mr Brownlee's attempt to get reimbursement was "optimistic and cheeky" and should not have happened.

While some cases justified public funding, it should be publicly disclosed when it happened.

"The public has a right to know if money is granted, and also if someone is silly enough to apply in circumstances like Mr Brownlee's."

Mr Brownlee's case stemmed from his attempts to eject Mr Abel after he disrupted the National Party's 1999 election campaign launch.

Mr Brownlee said he was acting in his capacity as a junior whip when he took on the task of removing Mr Abel.

"In hindsight, I would have thought 'oh well, I've got this big bill, I may as well see what is possible'. But quite clearly it wasn't appropriate."

He had sent a request for reimbursement to National leader Bill English in 2001, one month after the rule was introduced.

He sent a subsequent set of invoices in May 2002 after the court case, including one for $13,375 for damages and costs to Mr Abel.

In total, Mr Brownlee's own legal costs totalled $34,366.

Prime Minister John Key said he believed Nick Smith's case - which related to comments he made as Opposition building spokesman - met the necessary test and both former Speaker Margaret Wilson and present Speaker Lockwood Smith had agreed.

Dr Smith said allowing MPs to use public money was warranted, likening it to a media company paying for a defamation case against a journalist.

"The thing that grates with me is that, particularly with the current case, is I've got my house and everything on the line.

"[Media] write lots of stories about MPs taking perks and the like, nobody ever acknowledged the number of MPs who get wiped out as a consequence of legal costs associated with their work."

The November 2001 change giving ordinary MPs help with their legal costs appears to be in response to a defamation case against former Act MP Owen Jennings who was facing bills of $200,000 after the High Court found earlier that year that he defamed the chairman of the Wool Board.

THE RULES

For ministers:

The Cabinet Manual provides automatic indemnity for cases taken against them as a minister. For actions against them personally, such as defamation, the Cabinet can approve use of public money if the matter arose from the minister's duties, such as a public speech.

For other members of Parliament:

No provision for their legal costs pre-2001. Since then, they have been allowed reimbursement of expenses to defend legal proceedings taken against them "in his or her capacity as a member of Parliament". Approval of the party leader and the Speaker is required.

The money comes out of the party's leader's fund - a sum given to party leaders to run their Parliamentary units and based on the number of MPs the party has.

THE CASES

Nick Smith: Currently receiving undisclosed level of public funds to defend a defamation case by timber preservatives company Osmose over comments he made in 2005 when an Opposition MP. Also had his costs reimbursed for defending a defamation claim by David Henderson under the rules for ministers in 1999. No public funds for other cases when not a minister, including fine of $5000 for contempt of court in 2004 over comments about a Family Court case, and two defamation actions which did not reach court.

Helen Clark: May 2001: Crown paid a $55,000 settlement to John Yelash after Helen Clark wrongly called him a murderer. He was convicted in the 1970s for manslaughter. Cabinet approved use of taxpayer cash.

Trevor Mallard: As a minister in 2001, the Crown paid legal costs for both sides over comments Mr Mallard made about Rosemary Bradford, wife of Max Bradford. Cabinet agreed it was in his capacity as minister. Paid own costs when Opposition MP in 1997 defending a defamation suit by then NZ First MP Tukoroirangi Morgan over Aotearoa TV.

Janet Mackey: Taxpayer covered about one-third of her initial legal expenses defending a defamation suit brought by a Christchurch hotel manager.

Owen Jennings: Racked up estimated $200,000 in bills when courts ruled he defamed a Wool Board official. $50,000 defamation order, plus costs.

- NZ Herald

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