Key Points:

MPs have accused defence lawyers of milking the legal aid system by taking payments for hopeless or unnecessary cases.

National MP Simon Bridges, until recently a Crown prosecutor, said there was a growing perception that some of the $54 million the Legal Services Agency spent in the past financial year on criminal legal aid was funding cases where there was no prospect of success.

Mr Bridges said he had received reports of milking the system, such as "a fourth bail application when it is clear that he or she failed the first three times and the fourth one is simply unnecessary".

Mr Bridges said another example could be the funding of cases to a preparation time of 50 hours, when that amount of time was not needed. Legal aid rates range from $105 to $182 an hour.

Mr Bridges also had reports of "rather too cosy relationships between [agency] staff and particular counsel".

Labour MP David Parker, also a lawyer, said senior criminal lawyers, particularly in Auckland, had told him there were "considerable numbers of counsel milking the system, particularly inferior counsel".

Mr Parker cited trials with many accused where six or seven defendants had individual lawyers, "because someone else [legal aid] was paying", rather than the compromise of having fewer lawyers to represent them as would be likely if they were paying themselves.

The agency was appearing before the justice and electoral select committee for a financial review.

As with the rising number of criminal cases, the cost of criminal legal aid is ballooning, with the $54 million bill to the taxpayer in the last financial year 42 per cent higher than the $35.2 million spent five years ago. In response to questioning by Mr Bridges about what checks the agency made, agency chairwoman Carole Durbin said it almost did too much checking, but conceded it was difficult as the agency "could not be the judge" and sometimes had to give the lawyer the benefit of the doubt.

Ms Durbin said overriding the opinion of the lawyer could have "liberty consequences" if it meant a person was unnecessarily kept in custody.

She said the agency was disappointed that the judiciary "are very reluctant to name people that are not doing the right thing. It would be quite helpful to us if we did have more than anecdotal evidence - we hear a lot of general things but we rarely can get the actual detail to investigate".

National MP Richard Worth, another lawyer, asked that the committee be provided with a breakdown of the costs of the Nia Glassie trial as a case study.

Ms Durbin said the agency had advised the review it preferred legal aid services to be delivered by both private lawyers and specialist in-house lawyers.

She said its in-house public defence service, a pilot scheme made permanent last year, was one of its "bright lights".

* Going for a fourth bail application even when three have been rejected.
* Racking up hours of preparation time that aren't needed.
* Lawyers in "cosy relationships" with legal aid staff.
* Lawyers for everyone in a multi-accused trial when fewer would suffice.
Source: MPs on justice and electoral select committee