Attorney General Chris Finlayson wants a new law to set the Supreme Court straight on what parliamentary privilege means following a decision which he believes was wrong and has strained relations between the courts and Parliament.
The privileges committee, chaired by Mr Finlayson, tabled a significant report yesterday setting out why it believes the Supreme Court was wrong in the defamation action of the Attorney-General and Gow vs. Leigh.
"It is unfortunate that the Parliament now finds itself in the position of needing to clarify for the courts the nature of Parliament's privilege," the report says.
"We consider that the Parliament has been put in a position where its relationship of trust and confidence with the courts has become strained because comity [respecting each other's roles] has not been recognised."
The effect of a proposed law will be to give absolute privilege to officials who are preparing advice for ministers who are under an obligation to answer questions in Parliament.
The privileges committee also expressed concern over the courts allowing cases of "effective repetition" - former Act MP Owen Jennings was successfully sued for $50,000 in a defamation suit for saying outside Parliament he would not back down from what he had said in Parliament.
The proposed bill will also give Parliament the power to impose fines for contempt of Parliament - such as when the privileges committee found New Zealand First leader Winston Peters had knowingly filed a false return to Parliament when he failed to declare a $100,000 donation in 2005 from businessman Sir Owen Glenn.
"Parliamentary privilege" is the set of rights and protections enjoyed by Parliament and its members in the exercise of parliamentary process, such as the absolute privilege of freedom of speech. That means MPs can't be sued for what they say in Parliament.
The privileges committee report recommends that a law be passed to set out what is covered by the terms "parliamentary privilege" and what "parliamentary proceedings" but strictly "for the avoidance of doubt."
The report says that the Supreme Court's ruling on the AG-Gow vs. Leigh case "interferes with the ability of the House to assert and enforce its privileges."
It stems from a case in which a communications adviser, Erin Leigh, sued an official from the Ministry for the Environment for defamation over the advice he had given Trevor Mallard as minister.
Mr Mallard had been preparing to answer questions in 2007 about why Clare Curran (now a Labour MP) had been brought in to oversee the work of Ms Leigh.
The Crown tried to get the case stuck out on the grounds that the briefings given to Mr Mallard by his official, Lindsay Gow, were protected by absolute privilege under article 9 of the Bill of Rights 1688 and that the briefings were part of parliamentary proceedings.
The Supreme Court did not accept the Crown argument.
"This decision," said the privileges committee report "appeared to represent a significant shift in the interpretation by the courts of the privileges, powers, and immunities essential to the effective functioning of Parliament."
"We observe that the judgment will damage the House's capacity to function in the public interest and will have a chilling effect on the ability of the House to receive information."
Dedicating a statute to parliamentary privilege would be constitutionally significant step because it could tempt the courts to interpret the law, and compromise the separation of the courts and Parliament.
But the committee believes that if the law simply states what is covered by parliamentary privilege under common law, it would not run the risk of judicial interference in the way it could if the law was too detailed.
The privileges committee report also recommends that live or delayed broadcasts of Parliament, including its select committees, that are made under the authority of the House be protected by absolute privilege.