22 August 2006

Retrospective (or retroactive) legislation and pledge cards

Much fuss has been made about the suggestion that Labour may consider validating legislation if its pledge card spending and spending by other parties out of the Parliamentary Leaders fund is found to be invalid, on the basis that the expenditure was consistent with the reasonable expectation, induced by officials, that it was permissible. For example, Matthew Hooton said (SST: "It's time to pay the piper, Helen"):
Retrospective legislation is always wrong in the sense of being in breach of fundamental constitutional conventions. It involves parliament assuming the power to decide not only what is to be legal and illegal in the future, but to declare previous acts or decisions to have been legal or illegal. That is arbitrary power, and wrong.
My response (previously posted on comments on KiwiBlog) is as follows:

The difficulty with Hooton's column and much of the discussion on this issue is that it is being undertaken by way of slogans, without an appreciation of a nuances of the legal principles at stake. So, yes, in general, retrospective legislation is a bad thing. But, not always. The "bible" when it comes to good legislation is the Legislation Advisory Committee's Guidelines on Process & Content of Legislation. See Chapter Three, Part 3 (extract): "The general principle is that statutes and regulations operate prospectively, that is, they do not affect existing situations. ... However, while the general principle is that legislation is prospective, not all examples of legislation which impacts on existing situations will be unfair (see Burrows, Statute Law in New Zealand, 1999, page 358). Examples of retrospective provisions which are seen as having only a benign effect include those which validate appointments, or provide for backdated salary and benefit payments and new superannuation arrangements. The impact of the legislation on those affected can be assessed by considering a range of factors including the purpose of the legislation and the hardship of the result on those affected. For example, individuals may have a reasonable expectation based on entering into legal obligations, such as contracts, on the basis that the law will have a certain impact." So, is it really bad in this case? Well, I'm not convinced it would be. I've previously noted (LAWS 179: Shifting Goalposts) that, assuming there was an officially induced expectation that the expenditure was permitted, then retrospective legislation might be consistent with the Rule of Law, not contrary to it.

One the world's foremost Rule of Law theorists, our own Jeremy Waldron, has written an interesting article on retroactive laws: > Jeremy Waldron, "Retroactive Law: How Dodgy was Duynhoven?" (2004) 10 Otago Law Review 631 He notes a similar point to the one I note above, but suggests that an even more nuanced analysis is required (page 648):
We might say - and there is considerable authority for this - that retrospective and retroactive legislation are objectionable only in the context of penal laws or only when in some other way they affect legal rights. ... Stated in a positive way, the suggestion we are considering is that legislation which confers benefits ex post facto, or lifts burdens retroactively, or removes prohibitions, or cures disqualifications is not nearly so objectionable as penal or digestive legislation. ... I wonder about that. Let us begin with curative legislation. Is retroactive legislation which is curative alway benign? Surely not. ... Sometimes it is, sometimes it is not. Often it is a way of covering up or avoiding the embarrassment of administrative irregularity - pretending it did not happen, and depriving the citizen of the remedies that would otherwise be associated with its occurance.
He expands on these points in his article. Again, I'm not in a position to assess the propriety of the present proposal in the absence of certainty about the factual matrix surrounding the spending. My previous comments were were based on the assumption of an official assurance or reasonable expectation about the legitimacy of the spending. That point has been contested, although I'm not yet convinced the Auditor General's "warning" (NZHerald: "MPs knew rules on spending, says watchdog") was enough to displace any reasonable expectation induced by Parliamentary Services. The so-called warning was made in the OAG report: Government and parliamentary publicity and advertising, "Part 6 - Advertising in the pre-election period". The relevant extract seems to be as follows:

6.5 During an election period, successive governments have chosen to avoid conducting advertising campaigns that may create a perception that funds are being used to finance publicity for party political purposes. Paragraph 4.14 of the Cabinet Manual 2001 states – In the period immediately before a general election, the government is not bound by the caretaker convention…unless the election has resulted from the government losing the support of the House. But successive governments have chosen to restrict their actions to some extent at this time, in recognition of the fact that an election, and therefore potentially a change of government, is imminent. For example…some government advertising has been thought to be inappropriate during the election campaign (that is, where it might create a perception that public funds are being used to finance publicity for party political purposes – see the Guidelines for Government Advertising at appendix 2 for general guidance). In practice, restraints have tended to be applied from approximately three months before the general election is due, or (if the period between the announcement of the election and polling day is less than three months) from the announcement of the election. 6.6 Judgements about when and how restraints should be applied are matters for Ministers and, ultimately, the Prime Minister. The question under the guidelines of whether publicity or advertising has resulted in public funds being “used to finance publicity for party political purposes” must be considered with reference not only to the content of the publicity or advertising, but also to its timing. 6.7 The Members’ Handbook Guidelines expressly exclude “party political, promotional or electioneering material for the purpose of supporting the election of any person” from the definition of “parliamentary business” in relation to advertising by MPs or parliamentary parties. 6.8 There is no guidance as to how this should be applied in the period before Parliament is dissolved. However, there is clear potential for MPs’ and parliamentary parties’ publicity and dvertising activities in the weeks and months leading up to a dissolution to bring considerable party political benefit. That potential increases as political content is permitted in such publicity and advertising. ... 6.9 It needs to be recognised that government and parliamentary publicity and advertising outside the 3-month period before a general election can have electoral advantage for governing parties and parliamentary parties. 6.10 It is clearly impracticable for government publicity and advertising to cease completely during a pre-election period. The routine business of government must continue, and publicity and advertising is an integral part of that business. However, the potential for improper benefit exists nonetheless. 6.11 The basic expectations of the Cabinet Manual 2001 and the Members’ Handbook Guidelines are clear about conducting advertising campaigns close to a general election, and not using parliamentary advertising for electioneering or related purposes. Beyond those basic expectations, the potential for indirect political benefit requires risk management by Ministers and government department chief executives. ... 6.15 There is a need for similar guidance in respect of government department and ministerial publicity activities in a pre-election period. In recent months, we have been approached on several occasions for assurance about advertising campaigns at public expense that have been planned by government departments or Crown entities during a general election year. In each case, the content of the advertising was consistent with the Government Advertising Guidelines, had the advertising been scheduled to take place outside an election period. 6.16 We do not regard it as our role to make judgements on whether electoral advantage might accrue as a result of particular publicity or advertising being undertaken close to an election. In our view, that judgement is one for chief executives and, ultimately, for Ministers. 6.17 However, the making of those judgements would clearly be enhanced if there were more comprehensive guidance about how to manage the risks involved.

Okay, so there is an oblique warning about the care that needs to be taken with such spending. But, if anything, the report seems to augment the view that there was uncertainty about what was permissible, leaving room for the conclusion that the expenditure may have been expressly or implicitly approved by Parliamentary Services.

UPDATE: Kathryn Ryan's interview with Auditor-General Kevin Brady seems to suggest that: (a) despite the general warning, the rules may still have been clear; and (b) Parliamentary Services seems to have had a more than mere "administration" role and may have "approved" spending. See NineToNoon: Political Advertising.


David Farrar said...

Dean - teh Wladron pdf doesn't work.

Dean Knight said...

I'm a peanut with attachments. Hopefully now fixed?

Gooner said...

I agree with you Dean. If the MP's concerned had an inkling the expenditure would be, or was, approved then they did not wrong legally. And I agree that the brouhaha here has blurred the legal position. I can't wait for Brady's *final* report.

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Lord Justice Lawton in Maxwell v Department of Trade and Industry [1974] 2 All ER 122 said:

"From time to time ... lawyers and judges have tried to define what constitutes fairness. Like defining an elephant, it is not easy to do, although fairness in practice has the elephantine quality of being easy to recognise. As a result of these efforts a word in common usage has acquired the trappings of legalism: 'acting fairly' has become 'acting in accordance with the rules of natural justice', and on occasion has been dressed up with Latin tags. This phrase in my opinion serves no useful purpose and in recent years it has encouraged lawyers to try to put those who hold inquiries into legal straitjackets.... For the purposes of my judgment I intend to ask myself this simple question: did the [decision-maker] act fairly towards the plaintiff?"

This course examines the elephantine concept of fairness in the law, along with other contemporary legal issues.

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