Contents

Chapter 3
Resolving central policy issues

Accountability of Ministers

Introduction

3.89The Issues Paper also considered the position of ministers of the Crown. Should they have a statutory immunity or continue to have an indemnity? If they are indemnified, should that be governed by a specific statutory provision or continue to be provided on a case-by-case basis? Ministers would clearly come within the proposed new Crown Civil Proceedings Bill’s definition of the Crown.55 However, there is a question over whether or not they should be included within the immunity that we recommend for Crown employees. The alternatives are for the Bill to include a specific indemnity clause for ministers or to retain the current arrangements for indemnifying ministers.

Current lawTop

3.90At present, ministers are protected by an indemnity for legal costs or damages incurred in the course of legal proceedings brought against them in their capacity as ministers through a process set out in the Cabinet Manual.56 There is no absolute right to indemnity by the Crown in respect of proceedings brought against a minister personally. The relevant minister is required to approach the Prime Minister and Attorney-General for determination of whether the minister has acted within the scope of his or her authority. The Attorney-General forms a view on this issue and submits a paper to Cabinet seeking a decision on whether or not to indemnify the minister’s expenses.

Should ministers have immunity or indemnity?Top

3.91There may be arguments for aligning the position of ministers with that of Crown employees. From one point of view, it would seem logical to treat a minister in the same way as employees and have one statutory provision covering both. Crown Law’s submission said that it saw no reason to treat ministers differently from Crown employees. Ministers, too, are public officials and also perform public functions and are acting in the public interest. They should be able to make decisions without being unduly influenced by the possibility of personal liability. The fact that they have come to hold office through an elective process and have direct accountabilities to Parliament and the electorate does not change this.

3.92However, ministers are currently treated differently than public servants. Ministers have the indemnity described above, while public servants have statutory immunity. There may be good reason for continuing to distinguish the position of ministers from Crown employees. The NZLS said in its submission that, in contrast to employees, ministers of the Crown should be indemnified, not immunised, against civil suit. Ministers are responsible to Parliament for the carrying out of government policy within their portfolios. There should be a greater emphasis on ministers justifying why their actions should be indemnified, as opposed to Crown employees.

3.93We consider that ministers are political actors and should therefore remain in a different position to Crown employees. The immunity we recommend should be retained for Crown employees is based on their place in the model of public service accountabilities and responsibilities, with its emphasis on upward accountability to ministers who sit at the head. Ministers occupy quite a different place, and they should not, in our view, be immune from suit. We consequently do not recommend extending a statutory immunity to ministers of the Crown. Instead, ministers should continue to be indemnified in respect of good-faith actions or omissions in pursuance of their duties, functions and powers.

A statutory indemnity

3.94It may be useful to have a statutory scheme for the indemnification of ministers rather than leaving part of the process to the Cabinet Manual as at present. The coverage of a statutory indemnity should remain essentially the same as that applying at present under the Cabinet Manual.

3.95Indemnification should continue to only be available when a minister is acting in the course of his or her duties and where he or she has acted in good faith. However, under a statutory provision, indemnity would be mandatory where these conditions are met. This type of statutory indemnity provides greater certainty of protection for ministers compared with the current position under the Cabinet Manual. It means that, where a minister has acted in good faith and within the scope of his or her authority, he or she is entitled to an indemnity without requiring the approval of Cabinet.

3.96We also favour a reporting requirement. Under the provision included as clause 25 in the draft Crown Civil Proceedings Bill, departments would be required to include a statement in their annual financial statements itemising all amounts paid to indemnify a minister under the indemnity. Confidential and personal information would need to be protected when reporting.

Recommendations

R7A statutory indemnity should be enacted for ministers of the Crown to replace the current indemnity procedure in the Cabinet Manual. Under the new provision, the Crown would be required to indemnify ministers for costs and damages in civil proceedings in respect of good-faith actions or omissions in pursuance or intended pursuance of their duties, functions or powers.

R8 The indemnity should be paid by the department that is responsible for the subject matter of the civil proceedings, and departments should be required to include a statement in their annual financial statements itemising all amounts paid to indemnify a minister under the enacted indemnity. Confidential and personal information would be protected when reporting.

55See cl 4 of the draft Bill.
56Cabinet Office Cabinet Manual 2008 at [4.34]–[4.57].