Legal Briefing No. 46

Number 46

(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).

Background

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 -
  either that:
  • 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.

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