Are legal expenses a work expense?

It is good that the public now know that some legal expenses for some MPs have been met by the Parliamentary Service.

However the reporting on this issue hasn’t made very clear a quite important point – that the paying of such expenses has not been an additional cost to the taxpayer – it has meant less gets spent by a parliamentary party in other areas such as pamphlets, Axe the Tax buses, press secretaries etc.

Each parliamentary party gets a set amount of money allocated to it, based on their number and type of MPs. The leadership decides how to spend that money – around half normally goes on paying for staff in the leader’s office, and the rest on expenses such as postage, printing, research, advertising etc.

Parliamentary parties go to great trouble to spend their full budget each year. A party leader would generally much prefer to spend more of their budget on some extra billboards for their latest campaign (such as axe the tax) or to hire an extra staff member, than pay the legal expenses of an MP.

So why do they sometimes pay the legal expenses of an MP? When they consider the legal expenses were incurred by the MP as part of their job. Much the same as any boss would have to decide whether to pay the legal fees of one of their employees.

Note that this can only be used to defend a lawsuit, not initiate a lawsuit.

Over time, three National MPs had their party leaders consider whether to meet some of their legal expenses out of the leader’s fund. I think they got it right in all three cases.

The Peters lawsuit against David Carter was for comments made by Carter explicitly in his role as Chair of a Select Committee which has been sent a letter making a number of allegations (off memory all Carter said was that they were so serious they needed investigating). I regard that as a work related expense.

The same goes for the Osmose lawsuit vs Nick Smith. Nick’s comments were in his role as parliamentary spokesperson for National on building issues.

Those two cases were both approved. The legal expenses for the private lawsuit against Gerry Brownlees relating to his evicting a protester from the 1999 National Party campaign launch were not approved. While there is an argument that Gerry was acting in his capacity as a whip, I think the correct decision was made that this was a private party function, and Gerry was acting in a private capacity, not a parliamentary capacity. Hence his legal expenses were not met.

So I don’t have an issue with the eligibility of legal expenses of MPs to be considered work expenses, met out of the bulk funded leader’s fund. Nor do I have an issue with the decisions made to date.

However on the issue of transparency, I would agree that it would be sensible for there to be a requirement for any use of parliamentary money on legal expenses to be disclosed, perhaps as part of the six monthly disclosures.