(31 May 1999)
COMMONWEALTH ASSISTANCE TO MINISTERS IN LITIGATION
This Briefing outlines the position in relation to Commonwealth assistance to present and former ministers who are involved in litigation and inquiries. In particular, the Briefing traverses the Parliamentary Entitlements Regulations (Amendment) made in August 1998 (Statutory Rules No. 269 of 1998).
It has been long established practice for the Commonwealth to fund the defences of ministers in administrative law proceedings limited to challenging the validity of their official conduct (without a damages claim). Whilst the Minister may be named as a party to these proceedings, they are not directed personally against the Minister, in that:
- the proceedings challenge conduct by the Government through the Minister;
- if the Minister ceased to hold that office (either by ceasing to be a Minister or by transferring to a different portfolio), the Government's response to the proceedings would become the responsibility of the new Minister, who could potentially take a different attitude to them.
For many years decisions regarding Commonwealth assistance in relation to damages claims and prosecutions against ministers were made on an ad hoc basis.
However, in 1984 the then Government introduced administrative guidelines to deal with assistance in these matters. The guidelines equated assistance to ministers with assistance to officers provided under the then Finance Directions. The guidelines provided for assistance where the proceedings arose out of the performance of ministerial duties and the Minister had acted reasonably and responsibly.
A decision on the granting of assistance was made by the Attorney-General and the Minister for Finance in consultation with the Prime Minister or, where one of those Ministers was the applicant for assistance, by Cabinet.
There was no scheme for Commonwealth assistance to ministers in relation to inquiries. Such assistance was considered on an ad hoc basis (noting that the guidelines were not exhaustive of the circumstances in which assistance might be provided).
Issues Arising From Past Practice
No issues appear to have arisen in relation to Commonwealth funding of the defence of administrative law challenges to ministers' conduct (without a damages claim), or of a Minister's response to a subpoena relating to the Minister's current portfolio.
However, both legal and policy issues arose in relation to Commonwealth funding of ministers in relation to damages claims, inquiries, and subpoenas to former ministers or relating to a current Minister's earlier portfolio.
Legal issues included:
- Having regard to the High Court of Australia's decision in Brown v West (1990) 169 CLR 195, and to section 4(4) of the subsequently enacted Parliamentary Entitlements Act 1990, questions arose whether a general appropriation would be sufficient to pay for assistance in all cases.
Policy issues included the desirability:
- to make the arrangements for assistance to ministers more transparent and accountable, in particular by requiring reporting to Parliament;
- to strengthen Commonwealth control of expenditure;
- to include assistance for matters not covered by the guidelines, in particular, for inquiries.
For these reasons, the former Labor Government was considering the establishment of a scheme for Commonwealth assistance to ministers by way of regulations under the Parliamentary Entitlements Act. Such a scheme was supported by the Senate Legal and Constitutional References Committee in its report on 'Payment of a Minister's Legal Costs Part 2' in 1997. With some very limited qualifications, the Coalition Government accepted the recommendations in that report.
The Current Scheme
In August 1998, the Parliamentary Entitlements Regulations (Amendment) were made under the Parliamentary Entitlements Act, establishing the current scheme.
Who is covered by the scheme?
The scheme applies to a person who is, or has been after 24 May 1990 (the commencement date of the Parliamentary Entitlements Act), a Minister (reg 5). The scheme does not apply to present or former Parliamentary Secretaries, because those offices are not covered by the Parliamentary Entitlements Act.
What matters are covered?
The scheme (regs 5,6) covers assistance for:
- defending damages/compensation claims (eg. for defamation, misfeasance, conspiracy);
- defending prosecutions;
- defending other legal liability claims;
- participating in inquiries (but not challenges to their validity or conduct);
- responding to subpoenas.
Criteria for assistance
The criteria for assistance (regs 6 and 10) are:
- For damages claims, other liability claims and prosecutions -
- the matter relates to actual or alleged performance or non-performance of ministerial duties (as distinct from personal, party political, or electoral, matters) and the Minister acted reasonably and responsibly; or
- the matter arises only because of the Minister holding ministerial office (eg. is being sued as a 'figurehead' of the Government).
- For inquiries - that the inquiry relates to the performance of ministerial duties and it is appropriate to give assistance;
- For subpoenas - that the subpoena relates to ministerial duties since 24 May 1990.
What assistance can be provided?
Assistance can include (reg 9):
- the costs of the Minister's legal representation and other related costs, eg. travel/accommodation
- damages or costs payable by the Minister under an award or reasonable settlement;
- a fine or penalty imposed on the Minister.
Assistance extends to an appeal from or other review of the proceedings to which the assistance relates (subject to revocation under reg 11).
Conditions on assistance
Conditions regarding assistance (regs 9, 10, 13-16) include:
- assistance may be refused if there has been unreasonable delay in applying for it;
- assistance for the defence of a prosecution for an indictable offence must be limited initially to the committal proceedings;
- payment of a fine, penalty, or costs ordered against a Minister in criminal proceedings must only be approved after they have been ordered (when the reason for the order is known);
- assistance regarding motor vehicle accident claims must not be approved for a liability for which the Minister is, or should reasonably have been, insured;
- in the case of damages claims, where assistance extends to both the Minister's own legal representation and also to damages and costs payable by the Minister, the Commonwealth may control the Minister's defence - and the Minister must give the Commonwealth the assistance that it requests to exercise that control;
- assistance may be subject to a condition that the Australian Government Solicitor, or another nominated lawyer, act for the Minister;
- assistance is limited to what is certified as reasonable by the Attorney-General's Department;
- a Minister in whose favour a costs order is made must (at Commonwealth expense and for its benefit) take steps as directed by the Commonwealth to recover those costs;
- other conditions which may be imposed.
Deferring a decision on assistance
Under reg 9(5), a decision may be deferred until the facts become sufficiently clear to enable a proper decision to be made. In that event, initially, no decision at all might be made; or a decision to fund defence costs might be made, whilst deferring a decision to fund any damages or costs potentially payable by the Minister.
Revocation of assistance
Assistance may be revoked or reduced (regs 9 and 11):
- in relation to an appeal, prospectively from the revocation;
- where a regulation or condition of approval has been breached, with power to require repayment of all or part of assistance already paid.
Who decides upon assistance?
Under regs 7-10 decisions to grant or refuse, assistance are made by the 'approving Minister', after consultation with other ministers in accordance with arrangements approved by the Prime Minister.
The general position is that the approving Minister is the Attorney-General, who must consult the Prime Minister and the Minister for Finance and Administration. However, where any of those Ministers is involved in the proceedings, different arrangements apply, depending on which Ministers are involved.
Can a decision on assistance be reviewed?
There is no administrative review of these decisions. However, they would be legally reviewable under the ADJR Act and/or by way of common law judicial review.
How an application for assistance is made
A Minister may apply in writing to the approving Minister (reg 8). The applicant Minister should include sufficient information to enable a decision to be made whether:
- the matter relates to ministerial duties and the applicant Minister acted reasonably and responsibly; or
- the matter is a 'figurehead' matter.
Control and accountability
Apart from the provision for Commonwealth control of a Minister's defence in some circumstances, regs 17-18 require:
- the Attorney-General's Department to monitor a Minister's strategies in the proceedings and to inform the approving Minister if proposed expenditure is considered unreasonable;
- the Attorney-General to report to Parliament regarding decisions to pay assistance (including reasons) and to table annual consolidated statements of expenditure on assistance.
Funding for assistance
Funds for assistance are available by way of a standing appropriation established by section 11 of the Parliamentary Entitlements Act.
Assistance to ministers as plaintiffs
The Regulations do not provide for assistance to a Minister to institute proceedings, eg. for defamation.
Is assistance available outside the regulations?
Reg 12 provides that the Regulations do not affect a Minister's eligibility for assistance outside the Regulations (although there is to be no double-dipping). Thus, it is possible for a Government to decide in individual cases to grant assistance to a Minister even though assistance is not payable under the Regulations. Also, assistance remains available as normal for, eg. administrative law review proceedings.
However, there would always need to be an available appropriation before payment could be made. Also, the Government would need to be able to justify its decision in Parliament.
Moreover, there is a long-standing policy (supported by the Senate Committee) that the Government does not provide assistance to ministers wishing to make claims, or institute proceedings, for defamation. Reasons for this policy include:
- a defamation action is for monetary compensation for damage to the Minister's personal reputation;
- Government financial support could give rise to a public perception that the Government was seeking to suppress legitimate criticism of it;
- the appropriate Government response (if any) to ill-founded criticism is a public rebuttal of the criticism.
Role of Office of Legal Services Coordination
The Office of Legal Services Coordination in the Attorney-General's Department is responsible for advising the Attorney-General on the Regulations and on applications for assistance made to the Attorney-General. That Office would be happy to be consulted in relation to any proposed application and can be contacted on (02) 6250 6611 or 5587.
Role of AGS
AGS is of course also happy to assist departments and agencies in preparing requests by ministers for assistance, and to act for ministers where appropriate in relation to matters for which assistance is granted.
ISSN 1448-4803 (Print)
ISSN 2204-6283 (Online)
The material in this briefing is provided for general information only and should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this briefing.