David Fisher

David Fisher is a senior reporter for the NZ Herald.

Legal costs mount in Dotcom case

Lawyers working for the taxpayer have racked up almost 10,000 legal hours battling Kim Dotcom. At senior counsel charge-out rates, the cost in lawyers alone would be almost $2 million.

Some of that work is on behalf of the United States but most has been damage control around the mess which came with helping the FBI shut down Mr Dotcom's Megaupload.

The case has created its own work-stream in the court system since the high-profile aerial assault on Mr Dotcom's mansion in January 2012. The arrest of Mr Dotcom and three Megaupload colleagues was after a formal legal request for help by the FBI to have the men extradited to the US on criminal copyright charges.

Since then, the judiciary has fielded arguments over bail, access to the FBI's evidence, requests for access to seized funds, questions over search warrants and only occasionally the issue of extradition. This week one branch of the case is back at the highest court in the land.

The Supreme Court is hearing tomorrow an appeal over the issue of discovery - whether Mr Dotcom and his co-accused should be able to see the evidence against them.

The argument hinges on whether the courts should simply accept the assurance there is a case to answer and send the Megaupload four to the US for trial.

The Dotcom team has always denied the charges, and say the case is politically motivated - a key reason for refusing extradition requests.

The Crown Law Office has played down the question of costs, saying its staff are fulltime so hours are not billed anyway. The latest figures show 9688 hours worked on the case since July 15, 2011 - the date the Crown Law Office opened its file on the American request. The estimate of $2 million is based on rates usually paid for counsel hired to work for the Crown. In this case, additional legal work for the Crown had been done by Christine Gordon QC, Kirsty McDonald QC and Mike Ruffin, adding about 200 hours.

Costs and hours are also high for Mr Dotcom, with his legal team working for eight months before they knew they would get paid. A High Court decision in August freed up $2.7 million from seized funds to pay existing legal bills and a further $1 million to meet future costs.

The judgment resulted in only Mr Dotcom's New Zealand lawyers being paid. There are also legal teams in the US, Hong Kong and other countries in which the FBI took action against Megaupload.

Barrister Paul Davison QC has been the most visible legal figure, working alongside associate Rachael Wood. Simpson Grierson partner Greg Towers, who has handled commercial work for Mr Dotcom for four years, contacted the firm's senior litigator, Willy Akel, to ask who he could recommend - Mr Davison was free to take the case. '

The three co-defendants also enjoyed assistance without payment up front with barrister Guyon Foley acting for them.

The extradition hearing is not due to be heard until next year.

The legal battle

Hours worked: 9693.

Hours billed: 200+ hours to private counsel.

Seized funds: The High Court has seen a series of applications to access the money seized during the initial raids.

Permission has been given to secure funds of $6 million, with cars being sold to realise more cash.

Extradition - main hearing: Originally intended for April 2012, then July 2012. It is now set for November but not expected to start until at least April.

Extradition - disclosure: The North Shore District Court is to hear the extradition. Last year it ordered Kim Dotcom should see some of the evidence against him. It has been appealed and the Supreme Court sits on the issue this week.

Search warrant: A judicial review of the warrant used to search the mansion and seize evidence revealed the FBI had spirited evidence overseas, that the justification and sign-off for using the anti-terror group in an aerial raid was flimsy, and that the spy agency was illegally involved.

The court is still working on remedies for Crown over-reach. The warrants were found to be unlawful.

Damages against police: A lawsuit seeking compensation for the illegal search and seizure of the mansion has been filed.

Damages against GCSB: A lawsuit seeking compensation for the illegal spying on Dotcom and Bram van der Kolk has been filed.

- NZ Herald

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