LawNews- Issue 8

Tracing crypto assets when relationships TURN SOUR

Contents

Tracing hidden crypto assets in property relationship

Criminal barristers, chief ombudsman demand return of basic entitlements for prisoners

LawNews is an official publication of Auckland District Law Society Inc. (ADLS).

Editor: Jenni McManus

Publisher: ADLS

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Cover: Dan Kitwood / Staff / Getty Images

With the boundaries already blurred between barristers and solicitors, a fused profession makes more sense (final of a three-part series)

How to trace digital assets in property relationship splits

Tracing property after a relationship split can be a difficult and complex process. When those assets include crypto currencies and other digital assets, as is increasingly the case, identifying, tracing, and valuing those assets can become the stuff of nightmares.

The courts have already concluded that digital assets are property, and relationship property at that. In 2020, in Ruscoe v Cryptopia our High Court determined that crypto is property within the s 2 definition of the Companies Act 1993. And in 2019, in Beck v Wilkerson Judge Laurence Ryan accepted that crypto was “obviously relationship property assets”.

But some cryptocurrencies called “private coins”, such as Monero and Verge, are designed to be very difficult to trace. A partner who knows what he or she is doing can make it nigh impossible for the funds to be found.

Ownership of digital assets such as cryptocurrencies is becoming increasingly common. Last year, a survey by the Financial Markets Authority found that 10% of New Zealand’s population held crypto.

The two big issues, says James Swarbrick, director at

Swarbricks Lawyers, are identifying/tracing the assets and then valuing them. “The identification and tracing is [usually] the most difficult part.”

Family lawyer Kesia Denhardt, a partner at Stace Hammond, says relationship split cases involving crypto are increasingly coming across her desk. “When I sit down with clients, it has become a permanent fixture in my tick-box list to ask if there is crypto.”

Swarbrick, who presents about this topic on the Ako Legal Platform, says the lack of understanding by clients and lawyers alike can be an issue.

The good news is that identifying and tracing crypto assets is more jigsaw puzzle in many cases than dark arts. Unlike the early days of cryptocurrencies, people tend to buy the assets with bank funds and credit cards, leaving a paper trail.

Most blockchains, the ledgers recording where the crypto is held, are entirely transparent and auditable, so long as clients and their lawyers have the right information such as exchange account statements or cryptocurrency addresses,

Continued on page 04

Diana Clement

While the issues of disclosure and valuation are not unique to digital assets, they can pose particular difficulty in this space, given its anonymous and unconventional nature, and volatile markets

Continued from page 03

says Swarbrick.

In theory, crypto should become a side-plot in wider negotiations or proceedings in relationship property cases, Denhardt says.

That’s not to say that lawyers and their clients can always track down the crypto assets, especially where one party is oblivious to their existence or the other determined to hide them.

“While the issues of disclosure and valuation are not unique to digital assets, they can pose particular difficulty in this space, given its anonymous and unconventional nature, and volatile market,” she says.

Becoming more transparent

Crypto acquired in the early days after the invention of Bitcoin in 2008 was difficult to trace because it was mostly obtained by mining to create new coins, for which the miner is rewarded. Early peer-to-peer transactions were direct from one user to another, which enhanced crypto’s reputation as being secretive.

As usage increased, so too did third-party services and regulation. In particular, for relationship property, using bank funds to buy crypto became common.

Anti-money laundering and counter-terrorist financing (AML/CFT) laws have also made the job of family lawyers easier, says Swarbrick. “The majority of people who are using these assets will be coming through regulated exchanges, and there will be records of buying and selling via bank accounts,” he says.

Identity and disclosure

Unlike other forms of property, crypto purchases can easily go undetected in a relationship, says Denhardt. “One spouse could be purchasing crypto on their phone while sitting right next to the other, without their knowledge.

“It’s very easy then for the former partner or spouse to deny any existence [of crypto].” However, they may fold if a lawyer knows the right questions to ask. A lot of people assume that lawyers know very little or nothing about crypto and other digital assets.”

The first step is to find out whether there is crypto in existence, Denhardt says. “How much is held, how it is held and when was it acquired?”

Former spouses may deny its existence. “That’s a real issue particularly [for] women who are often kept out of the financial discussions. It’s yet another reason that both partners in a relationship should be aware of their finances.”

Denhardt always asks clients if the other partner suddenly has a new source of funds over and above a salary or has talked about crypto in happier times. If her client remembers his or her former partner being interested in crypto, her ears prick up. One shred of evidence may be all it needs to pull the

crypto into the picture.

Bank statements can be good for that, with most purchases these days being made with credit cards or transfers into trading accounts. If the party has been honest with the Inland Revenue Department, then tax returns can help as well.

Once a small amount of evidence has been obtained, then targeted questions can be put to the other party, rather than the catch-all vague inquiry as to whether there are any other assets in existence not already identified, says Denhardt.

“Tailored questions serve a dual purpose,” she adds. “First and foremost, they plainly bring a lawyer closer to identifying any such assets. But second, they send a message to the other party that the lawyer knows what they are doing, which may mean they are less likely to make attempts to conceal.”

From there, discovery is one tool for identifying assets that one party might be seeking to hide.

Transparency

Former partners may, when they buy crypto, be seeking to benefit from the privacy and anonymity of the investment, Denhardt says.

The paradox there is that many crypto investments will be held on a mainstream crypto exchange, she says. Even if the investments are not linked directly to a name, all transactions on the blockchain are public and recorded, enabling the digital trail of data to be followed using tools designed for this purpose.

Forensics

In cases where there is no bank or IRD evidence, another option is to make a detailed search of the family home, looking for hard drives, or written strings of alpha-numeric characters or random strings of words, which might be private keys, a type of password. Other helpful information is login credentials for exchanges and transaction IDs. Being aware of crypto apps on the other party’s devices can also be helpful.

“If we can identify that someone’s bought, say, $1,000 [of crypto assets] from this exchange on this date, then you can request the account statements on the exchange, and you’ve got the addresses.

“If you give me an address, I can then plug that address into block explorers. That will tell you this address holds this amount, and it will show you all the transactions associated with that address. It’s all there in the open,” says Swarbrick. From there, a process can be followed. Several websites and tools allow people to follow the blockchain transactions. “With one or two pieces of information, you can triangulate things quite easily.

“You’ve just got to know what you’re looking at. I think it would be good for lawyers to learn a little bit around how to do that.”

It can be trickier but not impossible to identify and trace

Continued on page 05

Most blockchains, the ledgers recording where the crypto is held, are entirely transparent and auditable, so long as clients and their lawyers have the right information such as exchange account statements or cryptocurrency addresses

James Swarbrick

Kesia Denhardt

Continued from page 04

assets held in “cold wallets” on off-line hard drives. That’s the Cayman Islands bank account or money-under-the-mattress equivalent of crypto, says Denhardt.

Cost/benefit

In situations where other avenues have borne no fruit, there are forensic tools as well as experts who can assist in a tracing exercise, Denhardt says. In that situation, clients need to consider the cost/benefit equation of tracking assets that may not exist or may not be found.

“Sometimes you’ll go down that path and spend huge sums of money, and there’s nothing there that they can find. Then you’ve spent more than you’ve gained,” she says.

“Where suspicions turn out to be unfounded, and either a small amount or no crypto is identified, a client may have already dipped into a reasonable proportion of the settlement they are set to receive.”

Valuation

Valuation is the other stumbling block with relationship property splits involving crypto assets such as currencies and NFTs [non-fungible tokens] which are assets akin to digital

artworks. The volatility of crypto makes valuation a moving target.

Then it comes down to timing the settlement. The current state of the market may favour one partner over the other, says Swarbrick. Overseas, he says, there have been cases where judges have taken an average over a period to determine valuation.

At the easier end of the scale is Bitcoin and other frequently traded currencies, where prices are readily available. NFTs are more difficult because they may not be as liquid.

One option is to liquidate all the crypto assets at a certain date, says Denhardt. Or the assets can be split across two wallets, so both parties receive identical allocations. Otherwise, it’s a matter of deciding how and when the assets should be valued for division.

Anticipating divorce

Denhardt is sometimes approached by clients who are contemplating leaving a partner. She recommends they gather and collate any information they can get their hands on about digital assets their partner might hold.

That can be difficult. But looking for bank statements or hidden accounts can help, along with evidence of any crypto apps on their partner’s devices. ■

Last year, a survey by the Financial Markets Authority found that 10% of New Zealand’s population held crypto

Prisons resume face-to-face visits but problems with minimum entitlements remain

Reweti Kohere

All 18 of New Zealand’s prisons have now resumed face-to-face contact between inmates and counsel while the Department of Corrections continues to “recruit, retain and train” to deal with staffing shortages.

But criminal law barristers are criticising the department for “aspiring” to meet minimum entitlements under the Corrections Act 2004, saying these entitlements are not aspirational targets.

From this week, all prisons have resumed face-to-face legal visits, Corrections said in a recent update sent to the judiciary, legal profession and justice sector partners and agencies.

All but one prison since 2022 has allowed in-person legal visits to proceed, with Upper Hutt’s Rimutaka prison, one of the country’s largest prisons, resuming them only this week.

Lawyers’ preferred dates and times couldn’t be guaranteed, however, as Rimutaka continued to face significant staffing challenges. “Initially, there will be limited availability for faceto-face legal visits as Rimutaka Prison builds up its capacity to facilitate them,” Corrections said. “AVL and phone calls will remain available as means to contact clients.”

In-person legal visits were paused at Rimutaka at the end of last September because the prison had to manage an increase in inmates from other sites struggling with greater staffing pressures, Corrections national commissioner Leigh Marsh said.

It was reported at the time that 75 prisoners were set to move to Rimutaka from Mt Eden Corrections Facility and

Spring Hill in the Waikato.

Corrections took its responsibility to support the legal process “extremely seriously” and ensured alternative means of communication were in place, including increasing the availability of AVL devices capable of facilitating virtual visits. Marsh said there was no time limit for scheduled contact; lawyers were able to determine how much time they needed and, within reason, Rimutaka prison would facilitate it.

“While we know these measures don’t replace the benefit that can come from face-to-face visits, again, we had to keep the prison operating safely and securely,” he said.

With the resumption of face-to-face visits, counsel can contact Rimutaka prison directly, rather than through a centralised prison contact team established to coordinate all legal visits during the covid-19 pandemic.

Whānau visits

Face-to-face contact has also resumed for whānau, with 15 prisons facilitating such visits, and most having allowed them since last year.

Whānau visits have resumed in some of Auckland Prison’s units, with virtual visits available for other units. Known as Paremoremo, the prison is permitting family to visit unit six on Monday mornings and unit eight on Thursdays in the early

Continued on page 07

People in custody have a fundamental right to legal visits and whānau visits, which can only be lawfully denied in very limited circumstances and for a reasonable period of time

Photo: Peter Macdiarmid

Continued from page 04

afternoon.

Face-to-face visits haven’t resumed yet at Spring Hill, Rimutaka and Mt Eden, Corrections said in its update.

Marsh acknowledged the difficulty for whānau in not being able “to always see their loved ones in person in prison”. Staff were working hard to resume visits and activities as soon as possible, while maintaining safety.

Criticisms

While the resumption of visits was a great start, criminal barrister Emma Priest said minimum entitlements weren’t “aspirational” targets for Corrections to meet.

Section 69 of the Corrections Act 2004 permits prisoners a raft of minimum entitlements, such as physical exercise for at least one hour a day, receiving at least one private visitor each week for a minimum of 30 minutes and having their lawyer visit to discuss their legal affairs.

Minimum entitlements aren’t absolute though: prisoners may be denied them, “for a period of time that is reasonable in the circumstances”, if there’s an emergency, prison security is threatened or any person’s health or safety is put at risk.

The United Nations Standard Minimum Rules for the Treatment of Prisoners (also known as the Nelson Mandela rules) mandate all prisoners have at least one hour of outdoor exercise each day.

Concern for the welfare of inmates has surfaced as recently as January, with Stuff reporting some prisoners at Paremoremo were being locked in their cells for up to three days at a time, in breach of their human rights.

In August 2022, Stuff also reported Rimutaka inmates in two units were being locked in their cells for more than 22 hours some days due to Corrections staff shortages.

In an Official Information Act response specifically focused on two maximum security units at Auckland prison, which LawNews has seen, Corrections confirmed the minimum entitlement to receiving private visitors had been denied to inmates since August 2021 on the ground that people’s health or safety was threatened.

Corrections also revealed inmates from the same two units were, between August 2022 and January 2023, denied their entitlement to physical exercise,

Continued on page 17

JUDGE OF THE EMPLOYMENT COURT

The Attorney-General wishes to hear from suitably qualified persons who would like to be considered for appointment as a Judge of the Employment Court, based in Auckland or Wellington. Persons appointed to the Employment Court must have held a practising certificate as a barrister or solicitor for at least seven years or otherwise as set out in section 200 of the Employment Relations Act 2000.

The position will suit someone with a particular interest in, and knowledge of, New Zealand’s employment law. The criteria for judicial appointment includes:

• sound knowledge of the law and experience of its application

• qualities of character such as personal honesty and integrity, impartiality, good judgment, and independence

• awareness of, and sensitivity to, the diversity of modern New Zealand society

• ability to assist persons to resolve litigation other than by judgment

• effective oral and written communication skills

• ability to absorb and analyse complex and competing factual and legal material

• ability to work hard, efficiently and under pressure

• awareness of the special characteristics of employment relationships.

A copy of the document setting out the process and criteria for appointment and a copy of the Expression of Interest form are available here

Persons interested in appointment are asked to complete an Expression of Interest form and provide a curriculum vitae and submit them to the Judicial Appointments Unit by 28 March 2023.

All expressions of interest will be handled with the highest degree of confidentiality.

It’s not just about covid. Of course, covid had its own restrictions, but these problems are systemic and to do with staffing problems within Corrections

Making the case for a fused legal profession

Professor Leslie Thomas KC

So, we’ve traced the history of the English split profession. We now know why we have the division between barristers and solicitors and what each of them does on a day-to-day basis. That brings me on to the central question: do we need barristers? Or, more precisely, do we need a split profession?

I practise both in England and Wales, which has a split profession and in the islands of the Eastern Caribbean, which, like many parts of the Commonwealth, have a fused profession. So, I am in a good position to compare the two.

That said, comparing the practice of law in two jurisdictions is necessarily an imperfect exercise. The jurisdictions of the Eastern Caribbean are much smaller than England and Wales, with a much smaller Bar and no two jurisdictions are exactly alike in the nature of their legal problems.

Let’s start with some possible advantages of a split profession, and then look at the counter-arguments.

The advantages

A common argument in defence of the split profession is that barristers are professional advocates. We spend our whole careers doing written and oral advocacy before the courts. Since our day-to-day workload is so different from that of solicitors, we develop a different skillset. And so, we can often add significant value to a case.

In my career, for example, I have cross-examined many witnesses, often in difficult circumstances and so I am much more comfortable with cross-examination than a lawyer who rarely does it.

This is an argument often made by barristers in defence of the split profession. In 2018, for example, Andrew Walker QC, then chairman of the Bar Council, said, “The bar’s focus is on advocacy and on the expertise of running trials, whereas, although there is a litigation element for solicitors, their work is primarily focused on the transactional work, which generates so much of our earnings.”

Another advantage is that, when a solicitor instructs a barrister, the barrister can sometimes offer an objective and detached view of the case. The solicitor may have been working on the client’s case for months or years, may have got to know the client well, and may be very invested (and rightly so) in obtaining success for the client.

By contrast, the barrister, with a shorter involvement in the case and more detachment from the client, may be able to offer a more impartial view. All of us lawyers know that when you are knee-deep in a case, it can sometimes be difficult to see the forest for the trees.

As Sir Owen Dixon, a former Chief Justice of the High Court of Australia, said in 1952, “The work of solicitors in the administration of justice has the greatest possible importance, but their allegiance is perhaps more to their clients who have a more permanent or at all events a longer relation with them than the transitory relations between client and counsel when the full enthusiasm and force of the advocate are attached to the individual for a short space of time.”

This objectivity and independence can also be valuable in contexts where the client isn’t an individual. For example, when the Crown Prosecution Service, (CPS) prosecutes cases in the Crown Court, it typically instructs barristers who are not themselves employed by the CPS. Many of these barristers have experience of defence work, as well as prosecution work. As such, they have a measure of independence from the CPS and may be able to take a more objective approach than an institutional insider.

A third advantage is that in a particular case, the barrister may have expertise that the solicitor lacks. For instance, if you’re a criminal defence solicitor and you’re dealing with an immigration issue outside your expertise, you might instruct a specialist immigration barrister.

Continued on page 09

One major disadvantage is that most barristers are self-employed and work in barristers’ chambers, which are associations of selfemployed barristers rather than firms

In the final of a three-part series, British KC Leslie Thomas argues there is no sensible reason to maintain a split legal profession

Continued from page 08

The counter-argument

But there are, of course, possible answers to each of these points. In a fused profession, there’s no reason why we couldn’t have some lawyers who are primarily advocates and others who are primarily litigators.

We already have solicitor-advocates in England, many of whom have years of experience of courtroom advocacy under their belt and are highly skilled at it, while being solicitors.

Nor is there any reason why lawyers couldn’t bring on other lawyers to assist them with a case, just as solicitors presently instruct barristers. In fact, in my experience in the Eastern Caribbean, this happens all the time. An attorney with a big case might bring on a senior attorney at another firm to serve as leading counsel, just as a big case in England would have leading and junior counsel. So, none of the points I’ve raised is self-evidently a reason to maintain a split profession.

Let’s move on to the disadvantages of a split profession. Some of these are not necessarily disadvantages of a split profession in the abstract but are disadvantages of the split profession as it currently functions in England and Wales.

One major disadvantage is that most barristers are self-employed and work in barristers’ chambers, which are associations of self-employed barristers rather than firms. Barristers are not salaried and are reliant on fees. This creates a range of problems.

Firstly, junior barristers who do primarily legal aid work often suffer financial hardship in their early years of practice. This is because legal aid fees tend to take a long time to come through and, in some areas such as crime, the fees are insultingly low.

While barristers can earn better fees from winning civil claims or judicial review claims and securing inter partes costs, these too often take years to come through, especially if their costs are disputed.

So many junior barristers struggle financially for two or three years after completing pupillage and many need help from family. This is a huge deterrent to working-class people coming to the Bar. It also tends to push aspiring barristers into betterpaid areas of legal work, such as commercial work.

Another problem associated with the self-employment system is fee inequality. This is a controversial subject, and I will touch on it only briefly here, but there can often be significant inequalities in work and fees between different members of the same chambers, and between different chambers. Sometimes these inequalities replicate broader inequalities in society as to race, gender, class and disability.

And a third problem is that as barristers aren’t employees, we have no right to holiday pay, sick pay, an employer’s pension scheme, paid parental leave or any of the other benefits associated with being an employee. Many chambers do have insurance policies and pension schemes for barristers, but these are voluntary and not all barristers can afford them. In short, the self-employed Bar can often be a sink-or-swim system where it is difficult for marginalised people to make a living.

Collegiality

This is admittedly mitigated by the strong solidarity and collegiality that often exists between barristers. Many sources of help exist, including one’s own chambers, the Inns of Court and the Bar Council.

There are some great things about the Bar, such as the Bar Mutual Indemnity Fund (BMIF), which provides professional indemnity insurance to all barristers, and is far better than trying to find insurance on the private market. So, I’m certainly not suggesting the Bar has an “everyone for themselves” culture. It does not. Nor am I trying to discourage anyone from coming to the Bar: in fact, I’ve spent a great deal of my working life trying to encourage people of colour and working-class people to come to the Bar.

However, it remains the case that the structure of the selfemployed Bar naturally creates inequality and hardship. That isn’t the fault of individual barristers or their chambers but of the system we inherited.

The problems with the self-employment system aren’t limited to fees. Administering a barristers’ chambers presents a unique set of challenges for chambers management and staff, because barristers aren’t partners in a firm, but self-employed individuals who simply share the same place of work. Members of chambers can and sometimes do appear against one another in the same case.

Blurred boundaries

Aside from the self-employment system, another major problem with the split profession is the apparently arbitrary lines between what a solicitor can do and what a barrister can do. Barristers, unless we have been specially authorised to do so, cannot conduct litigation. That means we commit a criminal offence if, for example, we issue proceedings in court on behalf of a client. The boundaries of the conduct of litigation are blurred, however, and barristers are allowed to file certain things with the court, such as bundles of authorities and skeleton

Continued on page 18

The selfemployed Bar can often be a sink-orswim system where it is difficult for marginalised people to make a living

Events Briefs

Featured events

Connecting New Zealand lawyers

Rotorua Lawyers’

Thursday 30 March 12 – 2pm

The Regent Room, Ground Floor/1191 Pukaki Street, Regent of Rotorua, Rotorua

Learn more

Lunch

West Auckland Lawyers’

Wednesday 5 April 12 – 2pm

The Falls Bistro, 22 Alderman Drive, Henderson, Auckland

Learn more

Lunch

Have your say

Ron Paterson, chairman of independent panel reviewing the legal profession, wants lawyers to provide feedback on the panel’s recommendations, released last week.

“It’s good to see the independent review report and recommendations being debated within the legal profession,” he says. “Practitioners are encouraged to read the report. A detailed cost-benefit analysis highlighted the case for independent regulation.”

PwC Law engages chatbot

PwC in Australia is to introduce an artificial intelligence tool to help lawyers conduct research and analysis, manage claims and potential offer legal advice. The Australian reports the Big Four consulting firm has partnered with Silicon Valley AI agency Harvey, which has developed a chatbot to answer questions from lawyers. PwC’s global legal leader Tony O’Malley has not ruled out the potential for the tool to offer legal advice in the future. But he says Harvey will not become “a substitute for human-led expertise and sign-off”.

About 4000 lawyers across PwC’s global business will get access to the tool, following the lead of London-based Allen & Overy, the first major legal business to publicly partner with Harvey, The Australian says. ■

Hamilton Express Lawyers’ Lunch

Wednesday 19 April 12.30 – 2pm

The Bank Bar & Brasserie (Garden Bar), 117 Victoria Street, Hamilton Central

Learn more

Upcoming

May

Wellington Express Lawyers’ Lunch

Newly Suited Fark Knows Quiz Night ADLS Annual Employment Law Dinner

June

North Auckland Lawyers’ Lunch

Tauranga Lawyers’ Lunch

events@adls.org.nz

adls.org.nz

Consumer Law in

New Zealand, 3rd edition

Editors Kate Tokeley and Victoria Stace

Topics include the regulation of defective goods and services, consumer information, unfair terms, industry-specific regulation, consumer credit, consumer investment, the regulation of particular selling methods, technology and consumer access to justice.

The policies and philosophies underlying consumer laws are examined with regard to the broader debates about rationales for regulation.

The eight authors are experts in the field.

Price for ADLS members $125.22 plus GST*

Price for non-members $139.13 plus GST *

(* + Postage and packaging)

To preorder this book, please visit adls.org.nz; alternatively, contact the ADLS bookstore by phone: (09) 306 5740, fax: (09) 306 5741 or email: thestore@adls.org.nz.

Letter to the editor

‘Unconvinced’ about proposed name-change for ADLS

The issue of a name change for ADLS was canvassed in the year that I served as a councillor and was rejected at that time. ADLS has continued to evolve since then, and while I am open to the idea of a change to the name so that it better reflects who we are now, I have voted against the proposed name change.

I’ve read the material and FAQs but I think the new name and the branding advice misses the mark. We don’t just chatter to, or serve, other members. For example, ADLS talks to the media and to government. It is a known (and trusted) entity to the public and to the law-makers. Its opinions matter to people who aren’t members.

I am entirely unconvinced that the name “Law Association” carries anywhere near the same gravitas or mana as the current name. I am unconvinced that it describes what we do and why we’re significant.

I worry that an abbreviation of the new name to “the Law Ass” might be used, with unfortunate outcomes.

If the vote fails to be passed, and I hope that is the case, I’d like to see

the idea of a name change continue, with the ability for other names to be suggested and discussed, and for the opinions of those who want to retain the current name to be heard also. ■

Regards

Susan Kingston

Ponsonby, Auckland

ADLS responds

Acronyms, abbreviations, connotations and availability were carefully worked through for a variety of names, including The Law Association. Regarding “The Law Ass”, the common abbreviation of “association” is “assoc” or “assn”: a leading strategic consultant assures us she has never encountered the “ass” abbreviation. ADLS members and non-members have had input into the proposed name change and The Law Association resonated with those we have spoken to.

Are we headed for a snap election?

With the economic skies growing darker by the day, it must have crossed Hipkins’ mind that going to the polls sooner, rather than later, would leave Luxon and the National Party at an even bigger disadvantage

Chris Trotter

“Chippy’s a killer.” The politico who vouchsafed this opinion of New Zealand’s new prime minister did not, of course, mean that Chris Hipkins was guilty of homicide – merely that he has an instinct for the political jugular.

Labour’s second prime minister, Peter Fraser, had it. So much so that his great enemy, John A Lee, memorably likened Fraser’s smile to “moonlight flitting across a tombstone”. Sir Robert Muldoon had it – in spades. He called it “counter-punching”, but for many of his victims, like the hapless former cabinet minister Colin Moyle, it was more like a sucker-punch. Even Helen Clark had it. Press Gallery journalists lived in fear of her prime-ministerial “death stare”.

My own first encounter with Hipkins certainly didn’t leave me with the impression I was dealing with a political milksop. It was November 2012, the Ellerslie Convention Centre in Auckland and Labour’s annual conference. I was loitering outside the auditorium when Hipkins sidled up to me and whispered conspiratorially: “Our problems aren’t external – they’re internal.”

As I described it for The Dominion Post a few days later: “Chris Hipkins has one of those eternally youthful countenances which argue strongly against such ominous utterances. It’s as if such old words couldn’t possibly slither between such young teeth. And yet there he was before me, speaking darkly about the enemy within.”

The 2012 conference is best remembered for David Cunliffe’s refusal to rule out a run at the Labour leadership, then held by the luckless David Shearer. But it was also the conference at which the rules governing the election of Labour leaders were finalised. When this process failed to take the

shape desired by the “Clarkist” faction (led by Grant Robertson, Jacinda Ardern and Chris Hipkins), all hell broke loose on the conference floor. The image of a furious Hipkins at the microphone, spitting out his fury at the errant delegates, is one I shall never forget.

So, killer instinct? Yep, I reckon.

For real?

Certainly, there has been precious little indication of mercy in Hipkins’ ruthless, and ongoing, slaughter of Labour’s policy darlings.

Indeed, the insouciance with which our new prime minister has dispatched these embarrassments is remarkable. It’s as if Jacinda Ardern’s entire premiership took place while Chippy was on holiday and that he returned just in time to see her car disappearing down the street and find the note she left sellotaped to the front door: “Fix the mess.”

This he has done, setting Labour’s house in order with an endearing earnestness and absolutely no acknowledgment that he had actually played a major part in creating the chaos.

In this respect, Hipkins reminds me of Nikita Khrushchev – the loyal servant of Joseph Stalin who participated either actively or passively in all his excesses only to present himself as the Soviet Union’s saviour by repudiating Stalin and all his excesses. But only after the tyrant was dead.

The question many New Zealanders are asking themselves, “Is this guy for real?”, is intriguing. Hipkins, in his role as this country’s Education Minister, must surely rank as one of Labour’s most woke activists. The policies he set in place between 2017 and 2022 have struck many educationalists as little short of

Continued on page 13

The sort of politics that equips a person for successfully navigating the perils of life in a political party, and then Parliament, is not the sort of politics in which Luxon is schooled

Chris Hipkins

Christopher Luxon

Photo: Hagen Hopkins / Stringer / Getty Images

Photo: Phil Walter /Staff Getty Images

Continued from page 12

disastrous. Reconciling the minister who signed off on the highly controversial New Zealand history curriculum with the prime minister who stands ready to abandon co-governance, isn’t easy.

One way to reconcile the contradictions that make up Chris Hipkins is to see him not as a political ideologue, but as a political technocrat. It is possible that Hipkins is much less interested in the content of policy than he is in overseeing its introduction.

It is important to understand that Hipkins has been involved in politics for practically his entire adult life – and he’s very good at it. Fortunately, or unfortunately (depending on one’s own ideological leanings), Hipkins’ political career has coincided with an historical era distinguished by its curious onesidedness.

The arguments that once divided the world about which economic system was better – capitalism or socialism – had more-or-less ended when Hipkins was just 11 years old. The other “isms” – racism, sexism, environmentalism – involved little in the way of moral complexity. As a consequence, Hipkins appears to be much more interested in the “how” of politics – the techniques and processes best suited to amassing the numbers needed to win – than he is in the “why”.

A politician incurious about the “why” of politics enjoys an enormous advantage over his more ideologically-driven opponents. If a policy isn’t working, then the political technocrat will happily ditch it, rather than die in a ditch for it.

Hipkins gives the impression of being mildly surprised by the intensity of public opposition to some of Labour’s policies. Who knew that so many people cared so much about this stuff? But, because it is clearly costing Labour votes, it simply has to go. Guided by the pollsters and focusgroup convenors, Hipkins has fixed upon “bread

and butter” as the most effective pitch for victory. Everything else is expendable.

Stark contrast

The contrast between Hipkins and the man who would supplant him, Christopher Luxon, could hardly be more stark. The sort of politics that equips a person for successfully navigating the perils of life in a political party, and then Parliament, is not the sort of politics in which Luxon is schooled. The politics of the big corporation encourages the acquisition of an entirely different skill-set and, as the latest Leader of the Opposition is discovering, the overlaps are minimal.

Luxon differs from Hipkins in another critical respect: he believes in things. But, like the unfortunate David Shearer, the things he believes in are, politicallyspeaking, a very difficult sell.

Conservative Christian beliefs make most New Zealanders nervous – as do the hard-core neoliberal economic policies favoured by the big end of town. This leaves Luxon, a newcomer to party and parliamentary politics, in the unenviable position of trying to “stay on message” by constantly censoring himself. Hardly the best method for projecting the “authenticity” the 21st century voter craves.

Hipkins’ easy political fluency is born of his familiarity with the communicative exercise. He’s been talking politics and dealing with the issues that fuel it for 20 years, most of them at the highest levels. Hipkins has put in his 10,000 hours – it’s what makes his projection of the relaxed, easy-going, “I’m just a boy from the Hutt” political persona so impressively effortless. No matter how hard he tries, Luxon’s all-tooevident inexperience cannot help but keep him at a near-insurmountable electoral disadvantage.

Early election?

That being the case, and with the economic skies

growing darker by the day, it must have crossed Hipkins’ mind that going to the polls sooner, rather than later, would leave Luxon and the National Party at an even bigger disadvantage.

The only real problem with calling a snap election is Labour’s possession of an absolute parliamentary majority, the loss of which could be presented by the Opposition parties as evidence of political incompetence.

Unless, of course, the loss of Labour’s majority could be sheeted home to a woke rump of MPs who actually were prepared to die in a ditch for the policy, or policies, that Hipkins and his equally ruthless front bench were determined to jettison.

Co-governance perhaps? Labour’s sudden transformation into the party that was simply unwilling to impose “race-based policies” on an unreceptive electorate would leave National and Act floundering. Hipkins, the man for whom ideology has always held, at best, a passing interest, would have given New Zealanders an example of the most astonishing political jiu jitsu – one that only a true political “killer” could hope to pull off. ■

Chris Trotter is a political commentator and columnist of more than 30 years’ experience and owner of the Bowalley Road blog ■

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years’ PQE

Continued from page 07

mostly on the basis that prison security was at risk, with just over 1,000 people denied the entitlement at the start of the year.

Sentencing judges have been prepared to accept a lack of minimum entitlements and prolonged time in solitary confinement as mitigating factors.

Counsel have argued a “covid discount” exists – time spent in custody, both on remand and as sentenced prisoners, has been disproportionately severe because of the pandemic and Corrections’ staff shortages. The courts have recognised the argument either by awarding discounts at sentencing or imposing concurrent sentences.

“They are minimum entitlements. They are the low watermark, you can't fall below them. They are not something to aspire to,” Priest said. “The thing that upsets me with Corrections at present [is] they say they are trying, but they don't get to try hard on fundamental human rights. It's baseline stuff. It simply has to be done.”

Systemic issues

Criminal barrister Julie-Anne Kincade KC described the denial of minimum entitlements as multi-layered. “There’s the layer of being locked up for periods of time, which are inhuman. There’s the layer of not being able to see your family. Then there’s the layer of having difficulties and issues with preparing for your trial.

“It’s not just about covid. Of course, covid had its own restrictions, but these problems are systemic and to do with staffing problems within Corrections.”

Marsh, Corrections’ national commissioner, said the department has received more than 3,100 applications for prison officer roles since October 2022, with almost a third received so far in 2023.

Some 469 front-line custodial roles – or 12% of the nearly 4,000 established positions – remained vacant at the end of February 2023. Moreover, some 338 staff couldn’t work due to sickness or other reasons. The department was aiming to recruit for all vacant frontline roles up to what is funded.

“Not all these roles are required to be filled for the safe and secure operation of prisons. Like any organisation, we have a natural turnover of staff and a level of vacancy is built into our operating model. The number of vacancies fluctuates on a daily basis,” he said.

Corrections was making a “concerted” effort to recruit, retain, and train. A new recruitment campaign, at a cost of nearly $7 million, had been launched; recruitment processes have been strengthened; and onboarding processes and work-life balance have been improved.

Marsh said recruitment and retention was challenging because of record low unemployment, border closures and stressors related to covid-19. Consequently, a larger number of staff left their roles during the pandemic for other opportunities at a rate Corrections hadn’t seen before.

“These challenges continue to impact our ability to safely

facilitate services within the prison environment at some sites, including rehabilitation programmes, training and education, visits, and unlock hours,” he said.

‘Just, fair and humane’

Chief Ombudsman Peter Boshier has been concerned about the continued restrictions people in custody have faced because of the pandemic and staff shortages.

“People in custody have a fundamental right to legal visits and whānau visits, which can only be lawfully denied in very limited circumstances and for a reasonable period of time. These rights are essential for the just, fair and humane treatment of people in custody as well as their whānau,” Boshier said.

“I expect staffing to be kept at a safe level in line with international human rights law and guidance, so that minimum standards are met and the wellbeing of all people in the prison environment is maintained.”

In May 2021, Boshier started investigating how Corrections has responded to repeated calls for improving prison conditions.

At the time, the chief ombudsman hadn’t seen “significant and sustained” improvements and had become increasingly concerned about seeing the same issues repeatedly emerge.

“I now need to determine if there are any system-wide issues in the department that may be preventing it from making changes that I and other oversight agencies have been calling for,” Boshier said.

The investigation remains live, and Boshier expects to release his findings around the middle of the year.

First-hand effects

Lawyers are seeing the effect of confinement and a lack of minimum entitlements on prisoner wellbeing.

Priest said inmates have described feeling panicked: “heart racing, sweaty hands, nausea and an inability to concentrate.”

The lack of social interaction and connection, with prisoners being denied whānau visits and physical exercise, meant the courtroom was an overwhelming place for them upon arrival. “There are so many people, so much noise, lots of movement,” Priest said. “It’s significant when they have been only allowed out of their cells for perhaps three hours a week over the preceding months.”

Kincade added that, over and above the “nerve-wracking” experience of going to court, some prisoners have had trouble even getting to court in the first place. This made it difficult for counsel to communicate with their clients and take instructions for their case – and put the actual court fixture in jeopardy.

“What we are worried about is that, because of that anxiety they will be feeling, it will manifest in a way where someone gets hurt, whether it’s the prisoner or the prison guard, or it’s just a very tense situation which, really, Corrections should be doing its best to ameliorate,” Kincade said.

It’s crucial the system didn’t add to the trauma of being locked up, so that “we don’t release a little ball of anger into our society, because nobody wants that either”. ■

They are minimum entitlements. They are the low watermark, you can’t fall below them. They are not something to aspire to

Emma Priest

Julie-Anne Kincade KC

Continued from page 09

arguments.

The rules can be especially complex and difficult when conducting Public Access work, where a barrister is instructed directly by a client. In such a case the client must conduct the litigation themselves, meaning they have to file documents with the court.

There are also limits to what Public Access barristers are permitted to do in gathering evidence. This often creates difficulties and it is very easy unintentionally to breach the rules. It is also difficult for clients to understand the differences between what a barrister can do and what a solicitor can do.

And these problems wouldn’t necessarily be alleviated by more barristers becoming authorised to conduct litigation. Since most barristers are self-employed and don’t work in firms, many don’t have the administrative support systems in place that would be necessary to conduct litigation efficiently.

The restrictions on the other side of the coin are just as arbitrary. Barristers and solicitor-advocates have a monopoly on rights of audience in the Crown Court, High Court, Court of Appeal and Supreme Court, but not in the magistrates’ court or the County Court.

We’ve already looked at the historical origins of this distinction, but it doesn’t make a great deal of sense in the modern world. After all, the same skills are required to conduct effective advocacy in an inferior court and in a superior court. If solicitors can be trusted to carry out advocacy in some courts, why not all of them?

It’s no answer to say that the magistrates’ court and the County Court tend to deal with less serious cases. The County Court now routinely deals with a lot of high-value civil cases, as well as high-stakes litigation such as possession claims, where a person is at risk of being evicted from their home.

The magistrates’ court includes the Youth Court, where children can be tried for relatively serious offences. And solicitors can also carry out advocacy in tribunals and some tribunal hearings are of immense importance to the individual. For instance, a tribunal hearing in an asylum case is literally a matter of life and death.

That said, advocacy is a specialist skill, and it is true that barristers and solicitor-advocates tend to have much greater experience of advocacy than does the average solicitor. But that doesn’t justify drawing an arbitrary line between superior and inferior courts, which exists only for historical reasons.

As an interesting aside, despite the Eastern Caribbean having a fused profession, the historical divide between solicitors and barristers is still of some importance there.

In England, the rule that barristers were immune from actions in negligence has been abolished by case law.

But in many jurisdictions of the Commonwealth Caribbean,

it still exists. This gives rise to significant ambiguity about which types of legal work are immune from negligence claims and which are not, since it is only the work of an advocate that attracts the immunity, not everything done by a lawyer.

I should make clear that this is not an argument against a fused profession. Rather, it’s an argument against maintaining this archaic immunity, which has been consigned to history in England and should be equally consigned to history in the Commonwealth Caribbean.

Conclusion

My overall view, which will no doubt be controversial among my colleagues at the Bar, is that there is in principle no sensible reason for a split profession.

The separation between solicitors and barristers exists mainly for historical reasons. The lines that are drawn between the two professions don’t make a great deal of sense in the modern world. And the structure of the Bar, where most barristers are self-employed, creates a lot of avoidable difficulties.

It is true that barristers often bring significant benefits to our cases, due to our specialist skill in advocacy and our independence. Similarly, it is true that solicitors often have skills and experience that most barristers do not. But this does not necessarily require a rigid separation between the two professions, nor does it justify the current arbitrary limits on what each can do.

That said, I’m not necessarily calling for an immediate change. It would be very difficult and disruptive to fuse the English legal professions overnight. And we also need to recognise that the structure of the legal profession does not exist in a political vacuum.

We are having this conversation against the backdrop of the systematic underfunding of legal aid over the past two decades. Many of the financial pressures on the self-employed Bar, and indeed the financial pressures on solicitors’ firms, are caused by the current parlous state of legal aid. The Legal Aid, Sentencing and Punishment of Offenders Act 2012, which radically reduced the scope of legal aid, was a huge blow to the legal profession and to the integrity of the legal system, from which it has never recovered. Whether we have a split profession or a fused one, it is essential that it be funded properly.

The legal distinctions between what solicitors and barristers may do have already been significantly weakened in recent decades. That process should continue. But this should happen alongside an immediate increase in legal aid rates, the repeal of the 2012 Act and a restoration of the full scope of legal aid, and a commitment to properly fund the administration of justice. ■

Professor Leslie Thomas KC is a lecturer at Gresham College in central London ■

It remains the case that the structure of the selfemployed Bar naturally creates inequality and hardship