Huge handouts, distancing obligations and lost liberties
Last week was Lawyer Wellbeing Week. You’ve got to feel a bit sorry for the big law firms after the Business Herald’s Hamish Rutherford reported Simpson Grierson had paid back the $2,335,108.80 it had claimed for its 335 employees under the wage subsidy scheme. A Meredith Connell spokespeople also said it had planned to pay back the $1,639,178.40 for its 236 employees. The same goes for Bell Gully and the $1,810,718.40 for its 260 employees, and Minter Ellison Rudd Watts with $2,069,265.60 for 300 employees.
To recap, that leaves Duncan Cotterill with $1,488,727.20 for 215 employees.
Partner Struan McOmish says the firm is constantly monitoring its financial position. If their revenue doesn’t fall to the threshold required to have received the wage subsidy, they will pay it back.
Among the remaining 10 largest law firms, Buddle Findlay, Chapman Tripp, DLA Piper, Dentons/ Kensington Swan, and Russell McVeagh didn’t take up the opportunity to secure the wage subsidy.
Last week Sir Roger Douglas got in on the action, saying that helicopter payments had fallen into the pockets of those able to care for themselves. In his paper he pointed to the firms who opted for the subsidy — “why haven’t they been required to fend for themselves and their businesses? Why, when the good times suddenly come to an end, have they gone capin-hand to the Government?
“It is the old maxim rendered true — there is never someone more socialist than a wealthy capitalist in a time of crisis.”
An incredibly audacious call from the father of Rogernomics, indeed. But the point is an interesting one, insofar as people are losing their jobs left and right, and certain firms and businesses as a whole — where there mightn’t be any shortage of work — are laughing their way to the bank.
What about other corporates?
Of the accounting firms, Baker Tilly Staples Rodway had claimed a total of $2,544,448.80 for 368 employees, Moore Markhams Auckland had claimed $953,107.20 for 138 employees, Johnston Associates had claimed $397,857.60 for 57 employees, and Malloch McClean had claimed $396,298.40 for 58 employees, for example.
Otago University’s Marcelo Rodriguez Ferrere says that’s the problem with the Government creating schemes that rely on conscience. “Firms by their very definition don’t have a human conscience: the idea is to get as much money as possible, so in one sense, why shouldn’t they? There are no
ethical obligations. But I’d also argue the wage subsidy wasn’t designed to cover them.”
The only thing that could deter anyone from claiming it, would be reputational damage, he says, “which explains why some firms have opted not to receive it. The irony is that the legal work hasn’t dried up, on the contrary.”
Where to draw the line?
On Thursday Prime Minister Jacinda Ardern said businesses had an obligation to ensure the public maintained social distancing outside their respective businesses. If not, they could be forced to shut down. It seems possibly unreasonable to expect business owners to have an obligation for the behaviour of people outside of the business and on public property.
In a non-pandemic environment a bar owner wouldn’t be responsible for an assault involving punters outside the bar, for example, Rodriguez Ferrere says.
“The Health Act isn’t as nimble as to allow for such an obligation. It strikes me as neither enforceable nor that the Prime Minister has the power to do so under the Act. But you can close businesses in a broad sense, whether that’s the best thing to do is another issue altogether.”
In any event, new legislation is to be introduced this week to allow enforcement of remaining restrictions under alert level 2.
On legality of the lockdown
It appears Andrew Geddis and Claudia Geiringer were on to something suggesting the liberties lost due to the lockdown were beyond the Health Act mandates.
In a letter to Epidemic Response Select Committee Chair Simon Bridges on April 4, the Law Society said governments might need to use the law in ways we do not normally accept.
“This does not mean the rule of law is any less important; in many ways the rule of law is more important now than ever before.”
It called for greater clarity about the constraints on freedoms of movement, and clarity about the legal basis for these constraints.
The governing body said all the legal instruments, policy papers and explanations of legal foundations “should be published as soon as they are available, so New Zealanders can clearly see the justifications for what is being done and the statutory powers being relied upon”.
Consequently, the Solicitor General (along with director general of health Ashley Bloomfield and police commissioner Andy Coster) has been summoned by Parliament and asked to reveal the advice on the legality of the lockdown, irrespective of said legal privilege.
As an aside, Geiringer has said it would be improper to release such advice.
Cue Attorney General David Parker, who appeared before the Epidemic Response committee on April 16, and spoke to legal issues raised on Facebook on Friday. In both cases he has said he was confident the Government followed the law.
In the (incredible) Facebook Live video Parker slammed Bridges for the summons, saying it was an attack on the separation of powers, and in fact Bridges was originally offered to see the legal advice on a confidential basis, but declined. Parker said he would nonetheless direct the matter of legal privilege to a privileges committee.
Where to from here? The obiter issue was heard before the Court of Appeal on May 3, where it was found the issue of lawfulness should be addressed in an expedited judicial review. Law drafter Andrew Borrowdale has since taken on Bloomfield via judicial review.
The thing is, even if Borrowdale is successful, the best case scenario is the court issues a declaration that the lockdown was illegal — which is nothing more than a scarlet letter of sorts. The saying “a storm in a teacup” comes to mind.