The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

Public Accounts Committee -- Wed., Apr. 11, 2001

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HALIFAX, WEDNESDAY, APRIL 11, 2001

STANDING COMMITTEE ON PUBLIC ACCOUNTS

8:00 A.M.

CHAIRMAN

Mr. Howard Epstein

MR. CHAIRMAN: Ladies and gentlemen, good morning. I would like to call this meeting of the Standing Committee on Public Accounts into session. Our purpose today is to look at the topic, Procurement of Legal Services. We have with us as a witness, Mr. Doug Keefe, who is Deputy Minister in the Department of Justice. Welcome to you, Mr. Keefe, thank you very much for attending this committee meeting. Our normal procedure is to invite any of our guests to make an introductory statement if they wish and this is then followed by rounds of questioning. Perhaps before we do that I will just ask members of the committee to introduce themselves to you.

[The committee members introduced themselves.]

MR. CHAIRMAN: Mr. Keefe, do you wish to make an introductory statement?

MR. DOUG KEEFE: Yes, thank you. Perhaps there are three points that I could make which might help orient people and then make the questioning a little easier. The first is that it is important to distinguish between this approval process and the procurement process. The procurement process has existed now through several administrations; I am not quite sure when it was introduced, off the top of my head, but I think in the early 1990's and that deals with goods and services generally. This policy, which was adopted in June 2000, establishes that the Attorney General is the government's lawyer, for all purposes. Whether the legal services that are required by the government are delivered by the private sector or the public sector - the Department of Justice - is a matter for the Attorney General to decide because he is the government's lawyer.

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In the case of legal services, this policy actually kicks in before the procurement process and so what we have really established is a two-stage process. The first is where a client identifies a need for a legal service, the client identifies that need to the Minister of Justice or his agent, and then a decision is made whether it is delivered by the private sector - a private lawyer, private law firm - or the Department of Justice itself. If it goes to the Department of Justice then there is no procurement required, of course. If it is to go to the private sector, then the procurement process kicks in and that runs through as it has for the past five or six years now.

The Department of Justice doesn't take a lead in that; we can help, but we aren't the lead agent in that. So that is the first point; it is important to distinguish between this approval process, which is upstream of the second part, which is the procurement process.

I guess the second point worthwhile mentioning is the criteria for approval. We felt from the outset that it was important that the minister's control over legal services not be exercised capriciously, but that we establish some objective criteria; so we did. In the materials we established for criteria, in the materials you have - the easiest way is to work from the back - the last tab is General Information, there is a page which is a news release just ahead of that and then the page ahead of that is a printout of our Web page.

You can't get to this Web page unless you are a lawyer with the Department of Justice, I might say. It is password-protected because we want to make sure we are the only people giving approvals. Essentially, what happens when the client identifies the need, one of our lawyers will go on the Web page, and as you see there are four boxes: there is a place for the department; for the cost centre of the department, that might be Tourism and Culture, for instance; the name of the lawyer completing the form; and then there are four criteria. It is the second last page before the tab headed, General Information.

What happens is the lawyer fills this out on the screen because one of the things we wanted to do was not slow things down, so the Intranet was an ideal way to deal with this administratively. One of the Legal Services Division lawyers fills this out on the screen. They would say Tourism and Culture has requested a lawyer, so they fill in Tourism and Culture; the cost centre for legal services in that department so we can track it; and the name of the lawyer filling it out, Doug Keefe.

The lawyer filling it out would say, we are not immediately available to do urgent work, which is one reason we would approve it, or another reason would be the legal work requires expertise not available within the Legal Services Division. The third would be we might have a conflict or an apparent conflict of interest and the fourth is that it is more cost-effective to retain outside counsel. For example, in the case of property work outside of Halifax Regional Municipality, by and large it is a lot more cost-effective to retain local private lawyers; they know the vendors and purchasers, they know the Registry of Deeds, they are in the locale. So at least one of those boxes would be ticked off.

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The beauty of this is that as we build the database, we can begin to look to see where the demand is. For instance, if we are continually getting legal work that requires expertise not available within the division and we look at the subject matter, we can say it might be more cost-effective for us to develop that expertise, rather than continually going to the private Bar. Now it is going to take a few years to develop that level of data, but that is the idea. So the second point is there are four reasons why work can be farmed out. The client department is told the reason and if they are refused, they are told why they were refused; if they are refused, what keeps us honest is then we have to do the work.

The third point is to say that we are very interested in developing data, but it is early days yet. The problem we have right now, as I noticed the minister indicated in the House in May 2000, is that it is not that we don't have enough data, we have too much data and it is too difficult to sort. We know every payment to every law firm but we don't know what the payments are for. Some of them are for legal services, which is what this policy applies to. Some of them though are payments in trust to their clients because the government has bought land from them or they are small claims adjudicators, night court adjudicators, or legal fees for a third party. So we have been working with that data and with the Department of Finance; we have had good cooperation. We have managed to clean out probably about 50 per cent to 60 per cent of those extraneous transactions so eventually - and I hope within the next few months - by computer search we will be able to identify exactly what is going where. That will allow us to verify our data.

I am sorry to be a little long, but those are the three basic points that I thought might be helpful to the committee.

MR. CHAIRMAN: Thank you very much, that was a very useful introduction. The way we usually proceed is by allotting 20 minute periods of time to each of the caucuses. I will start now - it is 8:10 a.m. - with Mr. Dexter of the Opposition.

MR. DARRELL DEXTER: Mr. Chairman, I have a few questions. I guess I wanted to start just by asking if you could indicate to us what the breakdown - I noticed the budget allocation sheet was here indicating what you received. I guess the total was $5.64 million is that right? The total budget for . . .

MR. KEEFE: For the Legal Services Division? Yes, last year.

MR. DEXTER: How much of that would actually be contracted out to private firms?

MR. KEEFE: I was executive director of the Legal Services Division for eight years and we had a nominal budget of $40,000 for contracting out. I don't think in my years we ever spent more than $15,000 of it. There may have been one year. What happens is, if work is contracted out to private firms, the client department pays, not the Legal Services Division. So the only thing we would ever pay for is if we felt that we needed some specific advice -

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let's say on a criminal matter, or something where we needed the advice. Generally if you are looking for where the money comes from that goes to private firms, you will find it in the budgets of the line departments.

MR. DEXTER: I am assuming you would know what the total amount is spent on retaining private law firms over the course of the budget years.

MR. KEEFE: The short answer is no, I don't, but I am on the trail. The first time we went to finance, we got a printout that showed every single payment to every law firm and the total for that fiscal year - which I think would be two years ago - was over $13 million. I had to go through that list manually and I quickly realized that there were payments in trust, for instance, where really it was a payment to the vendor of a property, but it was paid to their law firm. As I said, there was the Night Court and Small Claims Court and all that, so it was impossible to say - plus the line details are not very specific.

What we have done is we now have it winnowed down currently - and I still don't have a lot of confidence in this - to about $2.5 million. Right now I am showing $2.3 million for payments in legal services. That is still just an educated guess, a better educated guess, but we are still working with finance and next month one of our financial people will be meeting with the directors of finance across government to ask them to put more detail in the lines. We are still compelled to do a manual search, so that figure could go up or it could go down. It is just myself and a member of my staff looking and saying, oh, I know what that line is - that is in, that one is out. But there are many lines that we do not know, so I am afraid I cannot answer your question. In a year, I hope to.

MR. DEXTER: How many in-house counsel do you have right now working for you?

MR. KEEFE: It varies, but on permanent positions it is 40, including the management staff, and not all of them are full-time. We usually have four or five casuals so we could run as high as 45 and as low as 38 at any given time.

MR. DEXTER: What is the salary range?

MR. KEEFE: The intake is around $37,000, I think. Top end for a Solicitor III is about $82,000, $83,000. There is a market adjustment on top of that and then there is a restricted group of five Solicitor IV's and they get another - no, perhaps they are the ones that get about $85,000. I think the Solicitor III's would be in the high $70,000's. I will have to get that information for you. It has not changed much, but I seem to have forgotten it.

MR. DEXTER: I guess I have a few other preliminary questions I will go to first. I assume the department assumes all the costs associated with their counsel, including Bar fees and insurance?

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MR. KEEFE: In the Department of Justice?

MR. DEXTER: Yes.

MR. KEEFE: Bar fees and insurance, yes.

MR. DEXTER: Other lawyers in government, who are not necessarily providing legal services, are their Bar fees and insurance also covered through your department?

MR. KEEFE: Not through our department, no.

MR. DEXTER: Do you know if they are routinely paid? If you hire a lawyer and they are acting in another capacity in some other department, are their licences and insurance maintained while they are there?

MR. KEEFE: I know of some, I don't know if there is a universal practice. I do know of some, because occasionally we get their bills. The Bar Society sends me their bill, and I just forward it to the department. I couldn't say if there is a universal practice. It may depend, to some extent, on the particular job description.

MR. DEXTER: For instance, would you know if the Attorney General's Bar fees and insurance would be paid through your department?

MR. KEEFE: Every Attorney General, in my experience, who has been a member of the Bar, has had his Bar fees and insurance - I think it has always been regarded as important that the Attorney General and the Deputy Attorney General be practising members. Some of them, of course, haven't been lawyers. There is not much we can do about that.

MR. DEXTER: Do you know what the cost associated with that is?

MR. KEEFE: It has come down a great deal. We are waiting to hear what it is for this year; we will know in June. I think we pay about $800 for insurance, and the membership fee is another $800 or so. It is $1,600 to $1,800 a year per lawyer. Our insurance - because we buy in bulk essentially and we have a relatively low-risk practice, we have never had a claim - is lower than the general insurance for the private Bar.

MR. DEXTER: As you know, the purchasing of legal services by the government, government-wide, has been somewhat controversial, following the remarks that where made by the then Premier MacLellan back in February 1999 - or before that - around indigenous Black and Mi'kmaq hirings in the downtown legal community. I know that in the lifetime of this government, they announced a policy with respect to that, which essentially, as far as I can see, amounts to a monitoring policy with respect to the various individuals who do

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business with the government. I am wondering if you can tell us, at this point, what the follow-up on that has been, and whether or not there is compliance in the legal community.

MR. KEEFE: I am relying on what the officials of the law school told us. We have a committee of the Bar Society, the law school, the directors of the program, the dean of the law school and the Department of Justice. We talk regularly. As you know, I believe, the Department of Justice and prosecution service have retained one articled clerk, at least, from the program since its inception. This year, for the first time, we were actually in a bit of a horse race, there were four graduates of the law school who participated in the program this year. I am told - I don't know directly, because I have only dealt with one of them, the one we hired - that one of those graduates did not wish to article. The other three did, and had no difficulty obtaining articles. That is the last I heard. I think that we can take a bit of satisfaction from that.

The minister and the department did have a social mixer, bringing law firms, the society and the students together. I think that actually broke the ice, to some extent, and had a better effect even than I thought it might. The minister met, as did I, with the law firms and with the students separately. I also think that we have to recognize that there was a certain aura around that year because of the publicity.

What we are doing now is we are continuing to work with the society and the law school so that there will be follow-up. We have a commitment to a survey, we are finalizing that survey of law firms. You are correct, it is by and large a monitoring policy, but actually I have invested two years of my life, at least once every two weeks, on that committee and I do think it is going to work. There will be follow-up. There is follow-up. There will be published results.

MR. DEXTER: But at this point there are no identifiable targets to be reached.

MR. KEEFE: The government did not adopt a target model, that is the law firms will not have to give us targets and hit targets, but it is fair to say that the target is that every graduate of the law school who is a member of that program will have a fair shot at an articling position if they want it. That is what we are working toward. There are not a lot of graduates in any particular year. We should be getting better results. In the last two years, the profession has had good results. As I say, I don't know whether that is because the government has weighed in or because of the publicity.

MR. DEXTER: One of the other things I have often wondered is whether or not, in hiring in-house lawyers, you consider other factors as well. As an example I would say, are you monitoring or are you trying to determine whether or not you are hiring lawyers from Nova Scotia who have an Acadian background? (Interruptions)

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MR. KEEFE: We are not luring people out of the Legislative Assembly. (Interruption) I would have to say no, we haven't watched for Acadian backgrounds, specifically. In the early 1990's, we recognized we had a preponderance of men to women. We have actually more than reversed that, I would say. We are certainly at 60 per cent female lawyers now, and probably higher. It became irrelevant to count, sometime in the late 1990's. I can't give you an exact number, but if I had a list of the lawyers here I think you would see we have done very well on that account.

We have a number of lawyers of colour. I suppose those are the indicators we have been watching for. We do have a number of bilingual lawyers, but I honestly couldn't say - I have never quizzed anyone on whether they are Acadian or not. Those are specific criteria, and I would have to say, no, I haven't.

MR. DEXTER: I would like to really drive home that point with you. The Acadian community often is under-represented, especially in departments like yours. Your department has contact with that community, I would assume, on a regular basis, as you do with most parts of the province. I think it would be important and incumbent upon you to see to it that there is some representative from that community in your department. I will leave it at that. Until these things are brought forward, oftentimes it is difficult to ensure that all of the various areas are represented. I think it is a concern from the Acadian community as well.

MR. KEEFE: If I could, I think in the wake of the Marshall report, for that whole decade, we sought to look at the racial balance and the gender balance. I completely agree with the point you are making. In other areas of the department, for instance, we provide, in criminal matters, French language trials, so we do advertise in the judicial appointments advisory, criteria includes that the bench should be representative of the province as a whole. Also, we do advertise for French-speaking judges, the prosecution service, likewise for prosecutors.

Currently, we are looking for Acadian or French-speaking mediators at least, mediators for Family Court clinics and working with the French Lawyers' Association to identify those people. I think your point is a good one and one that I would not say I welcome, frankly.

MR. DEXTER: You mentioned mediators and as far as I know, there seems to be a list of mediators and conciliators who are regularly appointed, I assume either through your department or through other departments of government who maintain lists of lawyers who are used as mediators and conciliators. How do those lists get generated? Does your department provide advice with respect to, for example, the Department of Labour, or does your department maintain the list?

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MR. KEEFE: We do not maintain that list; the Department of Labour would do that. The only other ones where we might have, from time to time, some input is if there is a Civil Service arbitration. Then of course you are dealing with an arbitrator and not a mediator, where we represent the government in most of those, and then there is some talk about who would be an appropriate appointment, but essentially even that is done by the Department of Human Resources, not by us.

MR. DEXTER: It seems to be somewhat of a mystery to people how those lists get generated and who falls on those lists and who is regularly retained.

MR. KEEFE: I am afraid you would have to direct that to the Department of Labour or the Department of Human Resources. I just don't know.

MR. DEXTER: I will give you another list that you talked about. You talked about adjudicators and Night Court judges. Those people, I assume, are appointed either annually or for a term of some two or three years. How are those individuals chosen?

MR. KEEFE: By competition similar to the judicial appointment process. We have a panel consisting of staff, probably a local lawyer and someone from the Human Resources side, anyway, a representative panel, and they hold interviews. In the case of Small Claims Court and Night Court, they hold interviews and then they make recommendations to the minister - the same as the judicial appointments advisory committee - of between three and six names and then the minister selects from there. I will not say it is exactly the same as the judicial appointments advisory committee, but essentially it is the same.

MR. DEXTER: When you put forward that list to the minister, do you rank the candidates who come forward for appointment?

MR. KEEFE: No. In that respect, it is the same as the judicial appointments advisory committee. They are not ranked.

MR. DEXTER: Ultimately those decisions are made by the Minister of Justice?

MR. KEEFE: It depends on the panel, I think most of them are Governor in Council appointments.

MR. DEXTER: Well, the Minister of Justice makes the recommendation to . . .

MR. KEEFE: He would make the recommendation, that is right.

MR. DEXTER: I think it is a fair comment to make that there has been, over the years, some controversy about these appointments, because frankly they have been looked upon as appointments that generally went to supporters of the government of the day.

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MR. KEEFE: For Small Claims Court? I have not heard that in recent years and I am going back before the current administration too. My impression, and I only became deputy in December, for the Small Claims Court, no. No doubt at one time it was, but I think that this process has generally worked well. You may be able to give me an example.

MR. DEXTER: I think I am rapidly running out of time to give you an example, but let's just say that there are (Interruption) I guess Mr. Chairman, my time is at an end.

MR. CHAIRMAN: Thank you, we will move to the Liberal caucus.

MR. MICHEL SAMSON: Mr. Keefe, I was just curious - in following up on some of the questioning from Mr. Dexter - how many bilingual lawyers do you have on staff?

MR. KEEFE: I will have to get back to you on that. I can think of two, but there may be more.

MR. SAMSON: So, it would be two out of 40, is it?

MR. KEEFE: Around 40.

MR. SAMSON: Now, when you say bilingual, I consider myself bilingual but I have not been trained in the legal profession in French. When you say bilingual, are these lawyers who have been trained in French or simply can converse in a French setting?

MR. KEEFE: Well, we are getting to a point where I am afraid I would not know. I know that they are probably graduates of French immersion, that type of French. We would not put them forward as doing a French language trial for instance. As I say, it is not a point that I had given a lot of attention to until today.

[8:30 a.m.]

MR. SAMSON: So if I am correct with your statement, you did say you would not put these two staff people you can think of to do a French trial. In other words, you have no staff people who can conduct a French trial here in this province?

MR. KEEFE: A civil trial?

MR. SAMSON: A civil trial, yes.

MR. KEEFE: No, we don't have French language civil trials unless all the parties are capable of it. We have French language criminal trials but of course, the legal services, Department of Justice, doesn't do the criminal trials.

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MR. SAMSON: So if for some reason you are required to do this then you would have to go outside to contract out the work because you don't have that capability as it exists now?

MR. KEEFE: As I say, I would have to check with my staff and really survey the legal staff to see who speaks French. I apologize for not having attended to the issue over the years but I haven't, so I don't really know the answer.

MR. SAMSON: When you are hiring new staff, do you make it a priority at all to try to get bilingual lawyers or is that not even a consideration in your list of qualifications required?

MR. KEEFE: It is not something we put in the advertisement as a desirable characteristic but on the other hand the reason I know that we have two is because I happened to have hired both of them and it was on the résumé and it was regarded by the panel and myself as an attractive feature. It is not mandatory and it is not listed as a criteria but it is still a desirable characteristic.

MR. SAMSON: I guess I can't encourage you enough. I spoke yesterday, at length, with Minister Neil LeBlanc, Minister responsible for Acadian Affairs and Minister of Finance and pointed out it is high time the government starts putting that as a priority. No one is looking to have current staff displaced but when there are openings, certainly there should be some considerable weight given to trying to get lawyers on staff who are bilingual, who are trained in the profession in French and who are able to provide legal services should they be required in that language.

You indicated that for the last number of years, I'm not sure how many years back, your department has been taking an articling clerk from the IBM program. Is it just one clerk per year and how many years back does this go?

MR. KEEFE: The first graduates were probably in 1993, maybe 1992. We certainly have had at all times one clerk and have had as many as three from the program depending on the phase. Some have taken a little longer to get through and get admitted to the Bar and we have kept them on. Others have started later, a staggered start, so we have had at times, with overlap, as many as three clerks, for which we really have no budget but we manage to do that. Currently we have four people who went through the program who were either admitted to the Bar and practising with us or are clerking with us. I think we only have one clerk right now, we have another one about to start in June.

MR. SAMSON: I am curious that if it has been since 1993, I would say that has been eight years now and you have had up to three in one year, overlapping as you pointed out, why are there only four with the Department of Justice if you have had that many articling with the department?

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MR. KEEFE: The reasons would be individual in each case. Some people were not interested. Some people, like any clerk, were not suitable. Some people were interested and were suitable but we had no vacancy. Unlike a private law firm where you could at least look and say this person might bring in some business, that does not help us. We have to have a vacancy and a salary and, of course, the 1990's were a time of limited growth.

The other thing is that our competitions are run on merit. Experience is one element of that and, of course, our articled clerks, and this isn't just the indigenous Black and Mi'kmaq article clerks, all our articled clerks go into that competition with limited experience. So what we have done, belatedly I will admit, but in the last three years what we have done is keep our indigenous Black and Mi'kmaq clerks on, at least as casuals for as long as we can, for six or eight months, sometimes up to a year, and then when there is an opening, they have some experience and so, for instance, we do have one now who has a permanent job and that is a bit of a turn. So there are a variety of reasons. There is no one fit and it is something I have given a lot of thought to.

MR. SAMSON: Do you have any clerks that article with you other than clerks from the IBM Program?

MR. KEEFE: I think for about three years now we have had no other clerks. That is budget restraint essentially.

MR. SAMSON: No other clerks. So any clerks that you did have were only from the IBM Program?

MR. KEEFE: That is right.

MR. SAMSON: What is your relationship with Nova Scotia Legal Aid? Do they fall under the province or is it a federal . . .

MR. KEEFE: The Nova Scotia Legal Aid Commission is an independent commission under the Legal Aid Act. One-half of the members are appointed by the Barristers' Society and one-half are appointed by the Lieutenant Governor. The province funds them as does the federal government. Federal funding has been declining now since 1991-92 and we have been topping it up. So our relationship is arm's length, but it is a good cordial business-like relationship.

MR. SAMSON: So you have no immediate supervision of the Legal Aid Commission?

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MR. KEEFE: No, absolutely no, the minister has the authority to direct the commission under the Act, but in my experience that has never been done. We meet from time to time and discuss things, but then they go away and do what the commission decides should be done.

MR. SAMSON: One of the concerns that has been raised recently, I have heard it from a number of people, is with legal services through the Department of Community Services. As I am sure you are probably aware, the Department of Community Services is, I guess, one of the departments which relied heavily on outside lawyers . . .

MR. KEEFE: Yes.

MR. SAMSON: . . . to represent the minister, especially in matters relating to children's aid and, similarly, numerous matters under the Children and Family Services Act. There has been some concern raised that your department, the government, is once again looking at having these services taken over by in-house counsel rather than relying on the private sector for these services. Are those fears founded or I guess what steps, if any, are you taking in regard to legal services for Community Services?

MR. KEEFE: The Department of Community Services approached us three years ago, asking us if we could provide legal services more cost-effectively. They were paying - again, these numbers are about three years old. They felt they were paying in the Halifax Regional Municipality, and it varies wildly from year to year, but it was ranging from $1.7 million to $1.8 million low to $2.5 million on the high end and they were, of course, concerned about these legal bills.

So we ran a pilot project. We hired two lawyers and support staff and we took every third case. So there were two private law firms and the Department of Justice Legal Services Division and recently the decision was made that the Department of Justice would take over in the Halifax Regional Municipality all the cases delivered by the Department of Community Services. We will continue to provide one-third of the cases for the Children's Aid Society of Halifax. There are no moves outside of Halifax Regional Municipality other than that I have offered that if we can help them manage legal services and if we can provide some legal services cost-effectively, then that is the line we are in. But I think it is important to stress that this was client-driven. It wasn't the Department of Justice riding in and taking over; we were requested to look at it. We are now gearing up to do that. We have done hiring and we expect to be able to deliver that service for under $800,000 - the $1.7 million to $2 million service for under $800,000.

MR. SAMSON: Under $800,000. How much . . .

MR. KEEFE: I am sorry, sir, to interrupt. That includes the rent on the space, the salaries for the lawyers, the benefits, the salaries for the support staff.

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MR. SAMSON: You said that you had hired two lawyers. How many additional lawyers are you going to be hiring?

MR. KEEFE: We plan to hire, in this round, two more plus some more support staff. We might, to get to the $800,000, we will probably end up hiring another lawyer, but we don't know that because we are working our way forward. There is no sense hiring people and finding we don't need them.

MR. SAMSON: So if I understand correctly, you are going to have four, possibly five lawyers, doing Community Services legal services, but not Children's Aid Services completely?

MR. KEEFE: They will be doing child protection matters in the three Community Services Child Protection Offices, or child welfare offices, which is Sackville, Dartmouth and - good grief, I should know this, I am sorry but I am drawing a blank. There are three Child Protection Offices of the Department of Community Services and then in Halifax it is the Children's Aid Society for which they will do one-third of Children's Aid cases and all the department's cases in HRM child protection. We already do Community Services' other work. We have been doing their litigation and their general solicitor work. We have been doing that all along.

MR. SAMSON: Percentage-wise, compared to in-house versus private, what is the percentage going to be at the end of the day from what you have now to what you anticipate having as a result of these changes?

MR. KEEFE: I could not give you that exactly. I think probably we will go from one-third of all cases in HRM to 70 per cent or 75 per cent of all cases in HRM; maybe more, maybe 80 per cent.

MR. SAMSON: Since you started this pilot project, has there been any consultation that has taken place with social service workers who work directly with these lawyers to see how things have been working having in-house versus private? As I am sure you are well aware, the services under Community Services in many ways are phone calls in the middle of the night when children have to be taken into custody, and orders need to be done, they have to be filed with the court the very next morning; it is almost a 24-hour legal operation that is required through that department. Has any assessment been done as to whether this has been a beneficial service from a social worker's perspective to get their job done and to make sure that these children are taken into the care of the minister and at the appropriate times? Has anyone been following up with the workers themselves to see whether this system is working properly or not?

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MR. KEEFE: The Department of Community Services talks to their staff, of course. I met with their staff and social workers several years ago when we launched the pilot project. I am aware that there is apprehension because there is, I will say, a prejudice that I have dealt with all my legal career, that government lawyers only work from 8:30 a.m. to 4:30 p.m., and in fact our lawyers carry cell phones and take calls in the middle of the night just the same as everybody else.

MR. BARRY BARNET: Politicians only work those hours too.

MR. KEEFE: We all know better than that. So, yes, I understand that there is a degree of apprehension among some social workers and I can understand why. They have good working relationships with these lawyers; there has never been a suggestion that the private lawyers were not providing good service. This is entirely about can we provide the same level of service for less, and essentially our hourly rate is $75 an hour all in and there is not a private law firm in the province that will work for $75 an hour.

MR. SAMSON: Are you aware of any instances where there has been an incident where for some reason a child has been left in a hazardous or a dangerous environment because of the fact that in-house lawyers could not be found to do up the necessary orders or give the necessary instructions to social workers?

MR. KEEFE: I have never heard such a thing, no, and I would want to know immediately.

MR. SAMSON: Is there a reporting mechanism in place to report this to the necessary people should this situation arise?

MR. KEEFE: If that were to happen, first of all it would have to come up through the Department of Community Services. Their social workers are not shy people. We meet with them, I see the Deputy Minister of Community Services every Monday morning, not on this specific topic, just generally. I spoke as recently as yesterday with the associate deputy minister. If that were true, then there would be no difficulty in raising it with me if that were correct. If, for some reason, sir, that has happened and I haven't been informed of it, then I would want the details.

MR. SAMSON: You said, for Children's Aid, you are doing 1 in every 3 cases. How much are you paying the private law firms, hourly rate, to do these cases?

MR. KEEFE: Children's Aid pays them. We don't pay them.

MR. SAMSON: Children's Aid funding is government funding.

MR. KEEFE: It comes from the Department of Community Services, yes, sir.

[Page 15]

MR. SAMSON: Are you aware of what rate is being paid by Children's Aid for their legal services?

MR. KEEFE: Do you mean hourly rate?

MR. SAMSON: Hourly rate, yes.

MR. KEEFE: We were provided that information at one time, when we started the pilot project. I have seen hourly rates quoted as low as $100 an hour.

MR. SAMSON: How high?

MR. KEEFE: At $250 an hour, but hours are elastic. It is often said people introduce lawyers by saying they are going to say a few words and you realize the word few is elastic. Hours are elastic as well. Really, the only way you can tell is the number of cases and how much it is costing in gross.

MR. SAMSON: In other words, some firms might bill you at $100 per hour and charge you 20 hours for a file, whereas another firm bills you $250 an hour but only charges you five hours on that file. I find that a bit bizarre. Why would there not be a standard fee being paid by Children's Aid; and whichever firm is prepared to take it, fine. The ones who plan on paying $250, unfortunately I just find it bizarre why you wouldn't have a standard rate being paid to all firms doing this work.

MR. KEEFE: I don't want to be unfair to the board of Children's Aid. I think it is a volunteer board and I believe that they are doing their best to manage legal services, and it is my understanding that they are going to follow - shortly they will go into the procurement process that the government has laid down. A lot of this will get sorted out in that process. I am not saying how law firms do things, you asked me have I seen rates quoted and I have seen rates from $100 an hour, which I would say is unrealistically low, to $250 an hour, which is unrealistically high. On the other hand, if somebody can do an eight hour job in four hours at $250 an hour, my point really is, sir, you have to look and say what is the bill in the final analysis. What did I get and what did I pay? The hours are just a way of keeping score.

MR. SAMSON: Having the privilege of having the Auditor General here with us I will certainly be curious to see what his take would be on that because it is a concern, and I have heard it many times that you have firms of equal size and equal capabilities. One is billing the government at the very fair rate of anywhere between $100 and $150, to other firms who are billing the government $250 an hour and still getting the same level of work. In this time of fiscal restraint and trying to get value-for-dollar, I guess there are serious questions as to why the government would allow one of its divisions - do you know offhand what the budget for Children's Aid is for private legal services?

[Page 16]

MR. KEEFE: No, I don't. I think it varies from year to year, depending on the complexity of the cases. It is an independent board funded by the Department of Community Services.

MR. SAMSON: Would it be fair to say that it is in the millions of dollars?

MR. KEEFE: Not yearly, no.

MR. SAMSON: Not yearly?

MR. KEEFE: Oh no.

MR. SAMSON: So it is not over $1 million.

MR. CHAIRMAN: Excuse me, I am going to have to interrupt. Oh, sorry, did you complete your answer?

MR. KEEFE: No, I would simply say I wouldn't think it would be. There may be some terrible year in which it might be, but I think most years it is lower than that.

MR. CHAIRMAN: I will move at this point to the PC caucus.

MR. JAMES DEWOLFE: Good morning, Mr. Keefe. Thank you for dropping by. This is certainly not an area of expertise for me so you will have to help me along with it a bit but I do have an interest in it. Back in July 2000, the new system, the control of purchase of legal services in the private sector was announced and was being implemented immediately. It would, according to the documentation, ensure a coordinated approach to the procurement of legal services but built into that also was a tracking system to ensure this value for taxpayers' money. That is something that this government is all about. I am just wondering, now we are nine months into this new system and you jumped right into the deputy's chair in the fall of that year. So you are right into it. I was wondering, in your mind, how is this tracking? Perhaps you could tell us about the tracking system and how it has been working out and nine months later, is there anything to report?

MR. KEEFE: I think appointing me deputy did slow things down a bit because this has been my baby as executive director and there is still a vacancy there, which we hope to rectify. But having said that, people have picked up the slack. We produce a report, the aim is to produce it quarterly. We are now producing a report to the Minister of Justice which shows all of the approvals that we have been given. You will recall I started the morning by showing everybody the Web page and that goes into a database. Now technology did let us down and the data was lost but it has been recovered and it has been rewritten in Oracle which, I am told, is a more robust - whatever that means - program. Anyway, everybody has their computer horror story.

[Page 17]

So now we are able to produce at any time from this database, an analysis of which department, which lawyer, what reason and what the matter was, what it was about. Now the problem is, we want this to be a transparent and non-partisan system so we need to be able to make this information public. A lot of it, of course, is subject to solicitor/client privilege so we have moved to that issue now of what can we make public, how much detail can we make public. We certainly can't get into the details of what the case was about.

Essentially, we know how many approvals we have given, we know the approximate dollar value and as we bring up the Department of Finance's report, we will be able to report on the exact dollar value. Now you understand, of course, some of these files will run for six months to a year so the data is always going to be rolling but essentially, after three or four years, we should be able to produce a list in detail of everything we have approved, how much it cost, who did it and the reason, without a manual search.

What we are working on now is, we say that is all well and good, we know who is coming to us but we don't know who is avoiding us. So we are working with Finance because again, as I said at the outset, the Department of Finance knows every nickel that is paid to a law firm. Our difficulty here is winnowing out the ones that aren't really for legal services to the government. As I say, we made good progress but I would not be able to sit here today and say that we have confidence yet in where we are but I have confidence that we are getting there. Then, when we have these two tracks running, we will be able to verify our data. I will be able to go to departments that are avoiding us and say why are you avoiding us, if that is happening. I don't even know if that is happening.

So I would hope that within a year we will have some very good data, data that we can actually learn things from and that we will be able to make public because it is very important to me that it be a non-partisan system and if we can't make some of the data public, then we can never really guarantee to people that it is non-partisan. I don't want to be the patronage czar of the legal profession in Nova Scotia, frankly. I don't need that.

MR. DEWOLFE: What obligation do departmental lawyers, that is lawyers who are on staff in the departments, have to report to you? Is there any control? Do you have your thumb on top of the lawyers? Is there a natural reporting process to the Department of Justice from those legal lines?

MR. KEEFE: The easiest way to explain this is there are, give or take, 40 Department of Justice lawyers in government of whom 13 are located in client departments. Sometimes people think that, oh, that lawyer actually works for Finance or works for Economic Development.

MR. DEWOLFE: But they work for Justice.

[Page 18]

MR. KEEFE: You will even hear a deputy say, well, my lawyer will speak to you about that. I will say, well, certainly I will be happy to speak to your lawyer, but it is really my lawyer. So they report to me. Only those lawyers have access to this Web page and they understand it is their duty to report that and to give that approval. So, yes, there are other lawyers in government, in policy roles and that sort of thing, but they don't have access and they cannot give approval on behalf of the Attorney General, only Legal Services Division lawyers can give approval.

MR. DEWOLFE: So they are only stationed in the departments for convenience. They are dedicated, essentially, to that department but they work for Justice and they are paid . . .

MR. KEEFE: Their supervisor is a director at the head office of Justice. Their client is where they live but Justice is where they work.

MR. DEWOLFE: That is interesting. I wasn't aware of that.

MR. KEEFE: You are actually in the large majority. There is a lot of confusion about that, unfortunately. Not among the lawyers, but among the clients there is.

MR. DEWOLFE: We were talking about tracking under this new system. Now you are tracking expenditures outside the government, private sector lawyers, but are you also tracking the internal workings as well? The 40 lawyers, let's say, or the 40 legal minds that you have under your wing, are they being tracked too?

MR. KEEFE: In different ways, at different times. Several of the lawyers, myself included when I was in the division, tracked their time using Amicus Attorney, which is a relatively well-known computerized time management system, a tracking system used by law firms.

Most of the lawyers don't track time. What we have found works quite well is simply they are divided into five teams and they get together and through peer pressure the assignments get worked out so that the work gets distributed. We do a survey every two years of our clients and, of course, the directors are talking to the client departments quite often, so if there is a problem we generally know about it. There is really no substitute for hiring right. We do have a litigation database which allows us to report to the clients. These are the cases we are doing for you, this is the stage it is at, that sort of thing. So we are tracking all the cases we have at any given time.

What we are developing is a reporting system for the solicitors to use which can track time but is mostly designed to track the work, the assignments they are doing. I find that although people think initially they want to know where the time is going, in fact, really, when you sit down to talk to them, they are not really interested in how long it took you to

[Page 19]

do the job, it is just when did I ask you to do the job, when did you get it done and was I satisfied with it. That is primarily what we want to track for the solicitors but there is a time component in it. In the end, people want results.

MR. DEWOLFE: My concern of having legal people working within departments, even though they are reporting to you, are the departments indeed utilizing them to the fullest or are they just saying, oh, well, this matter we will just turn over to our lawyer and perhaps it is a matter that could be better handled by an administrator or an engineering sector of that department or something like that. I am wondering if the assignments that are looked at by your department, are they indeed approved or does that lawyer do just whatever within that department? It is easy to pass the buck. I have spent a career in government, working in government, and you try to pass it on to someone with the most knowledge, but maybe it is something that should be handled by someone else and that a lawyer's time could be better spent doing something else more important.

[9:00 a.m.]

MR. KEEFE: You have put your finger on a weakness in that model. We do not supervise them day to day. They are out of sight and so it is true, that is a concern, with that model. All I can say is that we have tightened up considerably on that in the last six or seven years. Certainly, that was one of my goals as executive director and I think we have seen some improvement. I cannot quantify that, it is just a sense that the lawyers are busy primarily on legal work. They get drawn into a lot of policy work. They used to do freedom of information, some of that is various - culling files and they used to do minister's correspondence, generally because they could, by and large, write well. We managed to clear away a lot of that so I think we have made progress, but that is a weakness in that model and it is something that we always have to be vigilant on.

MR. DEWOLFE: Speaking from experience, I know it was always great to have access to a lawyer for personal needs within the department and things like that, but if everyone does that then it is tying up that lawyer and so that should be part of the tracking.

MR. KEEFE: Yes and they would be included in the tracking.

MR. DEWOLFE: I do not know how you would do it, but some sort of a reporting system would be easily put in place that could be plugged into a computer system and go right back to your department.

MR. KEEFE: We did have it running on the Web in the fall. That was a casualty of the crash and that has not been restored, but that will. They would be reporting in the same way as this on the Web so it would be live on their screen, their page, the reporting page. So, I would hope we are not more than a few months from that.

[Page 20]

MR. DEWOLFE: How many minutes do I have left?

MR. CHAIRMAN: You have another eight minutes.

MR. DEWOLFE: I will continue then. I guess I will have time to touch on it and perhaps we can go back to it in the second half, but I wanted to talk about the restructuring that has taken place within government and just how that might have affected your department. Has it affected the policy that we were just talking about, the co-ordination of legal services and the tracking system and so on? What do you have to say with regard to the restructuring?

MR. KEEFE: And its impact on legal services?

MR. DEWOLFE: Yes.

MR. KEEFE: It has had good effects to some extent. For instance, the Alcohol and Gaming Authority used to use private lawyers. We are doing that work now because the authority is the URB and we do not do their work because, of course, they are an independent tribunal. At the staff level, the administrative level, that has moved to the Department of Environment and Labour and we are doing that work. No additional cost to government. And that was a substantial amount of work, a substantial cost to do that work and that has happened in a number of fields where there has been some rationalization and shake out of administration that has caused people to examine, perhaps, long-standing relationships and then they have come to us.

On the other hand, one thing it did do and has continued to do that we are still working through in the Legal Services Division is that as departments got put together, we took the position that lawyers would follow the work and so lawyers who had formerly been advising Environment found themselves pooled with lawyers who advised Labour. So then the Department of Environment and Labour had, for a brief period, five lawyers which nobody suggested was appropriate when you have a pool and you can begin to move work around more effectively. So, we have been able to rationalize a bit there so that is a good thing.

Not all of those anomalies have been worked out yet and it is hard to do because some people have 10 years of experience in a particular - in tendering, for instance - and so you may look and say we do not need that number of lawyers doing Department of Transportation and Public Works anymore, but who do you move? They are not physically located there, so you try to just move the work around. It is a gradual phase, it has caused a bit of confusion, some departments have moved from group to group, and so you have a lawyer who is in one solicitor group but they are actually serving a client of another solicitor group. Occasionally a ball might get dropped somewhere, but they are not insurmountable

[Page 21]

problems, you just scratch your head and say maybe I will run around and talk to a couple of people until I find this.

Basically, for us, on the whole it has helped the procurement side because it has been a period of reflection and re-examination, and by and large we have been able to help with that.

MR. DEWOLFE: It is always good to stand back and take a good look at your department.

Mr. Chairman, I will pass now to my colleague, Mr. Barnet.

MR. BARRY BARNET: Mr. Keefe, as a former municipal councillor at Halifax Regional Council, and at the County of Halifax, we, from time to time would examine whether or not we were getting the best use of the solicitors' services that we had, or if we had the right mix of in-house advice compared to receiving advice from the private sector. What process does the Department of Justice have in place to examine whether or not they have the right mix of in-house versus private services?

MR. KEEFE: First of all we have the four criteria which, although they are now in a policy, is something that we followed over the years: the conflicts, the availability, the expertise, and the cost-effectiveness. We have followed that in all my time as executive director.

The second element is that we look at what we call core government work, which is also now defined in the policy, where we would simply say this is a matter of constitutional law, for example, and even if we are not cost-effective we had better do it; although in that field, I think we are the experts and quite cost-effective. Administrative law, matters of important public interest, as far as a mix goes because we are new at managing legal services for the government as a whole we have never been asked until June to step back. We were essentially a service provider, not a service manager, so your question is a good one. Until June of this year, I was the wrong person to answer it, but now that is how I would answer it and that is what we are now tasked to do.

So, we would be moving forward. Through using our data for instance, we can see where we may develop expertise in-house, or we could also look and say we seem to be doing too much of this work, maybe that is something that should be farmed out. We believe we have always operated on a mixed model.

MR. BARNET: Okay.

MR. KEEFE: We are not trying to assert a monopoly here.

[Page 22]

MR. BARNET: With respect to the policy that is in place. On July 13th the minister released a press release in which he indicated that experience in other jurisdictions indicates that there could be as much as a 20 per cent savings; obviously we have not had a full calendar year to review that. Has the department tracked - at least for maybe half a year or three-quarters of a year - and is there any noticeable savings as a result of using this new model?

MR. KEEFE: There are noticeable savings. We have identified just under $400,000 in the last fiscal year of work that was routinely being done by private lawyers that is now being done by the Department of Justice at no additional cost. There is also child protection for the Department of Community Services in HRM, which I referred to earlier and I gave you the numbers there. What we cannot quantify is the work that would have gone out but for the fact that we said that we would do it, and that is pretty hard to measure because it simply then goes in our workload.

Finally, I would have to refer you to the description I gave earlier of the difficulty in tracking the work that is still going out. The Department of Finance data which as I say is so complete as to be difficult for us to mine for the information we need, but in general, we have about $400,000 in hard figures already and I think by the time we get the Child Protection Act, we will be looking at having saved more than $1 million.

MR. BARNET: That is a considerable amount.

I am out of time?

MR. CHAIRMAN: Yes, I am afraid I am going to have to interrupt. We will now go to our second round. We have enough time I think for about 15 minutes in each of the next session. Back to Mr. Dexter.

MR. DEXTER: Mr. Chairman, I wanted to continue where I left off with my list. The next list I wanted to talk about very briefly is what happens when there is an application made for the quieting of titles. As I understand it, unless the legislation has changed, what happens is there is a lawyer appointed on behalf of the province to see that there is not an interest the government has in that particular file. My experience over the years has been you can wind up with anyone who happened to be on a list that seemed to be generated by the government. I was just wondering where that stands today and whether those lists are still generated in-house and how one gets on it?

MR. KEEFE: For the last two years, we put a notice in the Society Record in October or November, asking lawyers who work outside of HRM - because we do the quieting titles inside HRM - who are interested in doing it - two years ago it just said quieting of titles and now it says property work for the government. All they have to do, it is relatively simple, is write in and indicate that they do a substantial practice in property work. In other words, it

[Page 23]

is not really an application but there should be some indication of the volume they do, that sort of thing. Other than to verify that they have five years at the Bar, which is our minimum standard and that they do property work, we simply put them on the list and then if there is a property transaction or property matter, including a quieting of titles in that county, we deal with the lawyers from that county in order, in rotation. It is really done by one of the secretaries in our office now, so it is fairly business-like now.

MR. DEXTER: There was a fee associated with that under the Act, I thought, so now when the province does it in the regional municipality, do you collect a fee for that and what is it?

MR. KEEFE: It is $700 or $750.

MR. DEXTER: In many cases it would be fairly clear quite early on that the government has no interest in the file?

MR. KEEFE: In 24 years I have never done a quieting of titles application but . . .

MR. DEXTER: If you look at the abstract of title it becomes fairly clear, fairly quickly, whether or not there is, in fact, an interest. I think that was one of the criticisms of those of us who were engaged in doing quieting of titles because it was a fee that was set that your client had to pay. As soon as the abstract came back it was abundantly clear that there was no interest, anybody in a 20 minute review of the abstract would know that, yet the client was paying out an additional $700 or $750 to another lawyer and really they couldn't understand it and I didn't blame them because a lot of the time I didn't understand it. If there was work to be done on the file and there was an interest to be protected by the provincial government and you had to pay for that, well, that was, at least, justifiable. What didn't seem to be justifiable was it was just a flat-out fee for making an application that didn't exist in most other cases. That hasn't changed and I think trying to convince this government to try to do away with a particular user fee that raises revenue is probably not going to be a very successful argument, at least at this point. So there you have it. That is something that certainly, from my years in practice, I found annoying. I mention it here because I am sure there are others besides me.

In the business plan on Page 6, you talk about the precedent system that exists on Terminal Road. You mentioned the fact that there are about 1,000 opinions in the electronic index that hasn't been updated since 1996. You seem to question whether or not it is worth keeping at this point, other than to perhaps index the opinions by category so they could be referenced, and you could add factums and briefs to that index as well and have access to your own work.

[Page 24]

It seems reasonable to me, given that on-line now there are so many services, whether it is e-Carswell, QL, or Maritime Law Book, all who have search engines that seem to be pretty good. I guess the question that arises out of this is, is there some kind of chaos in the precedent system of the Department of Justice and is it creating a problem for you?

MR. KEEFE: First of all, we have Quick Law and we have our Statutes, our regulations, which the Legal Services Division publishes, on-line. We were fairly early into the electronic database side of things, including our own CD-ROM tower. Partly as a response to the fact that our precedent system was paper-based, it is organized but it is paper-based, and it worked very well for many years. Now, the expectation of lawyers is they should be able to get it up on the screen without going out from behind their desk. We have a good precedent system for factums, for forms and all that, but we don't have a consolidated electronic precedent system.

MR. DEXTER: This is just an index of the precedent, the precedents themselves have not been scanned into a database.

MR. KEEFE: They only exist in hard copy - I shouldn't say they only exist in hard copy, you could go back to the electronic version of the original document. The dream is an electronic version of the document as a precedent. It is not that we are in chaos, it is simply that this is the next area to work on, to bring on people's screens basically.

MR. DEXTER: New documents as they are being prepared now, new factums, new briefs, new opinions given internally or to any of your client departments are now being indexed are they, and accessible from . . .

MR. KEEFE: By and large the opinions are not now because of the fact that there is not much sense continuing to catalogue hard copies. The factums are collected, and they continue to be known and indexed. I should say that the litigation groups are relatively small, so there is not a matter there of having to index them, somebody will quickly say, well, I just dealt with that in the such-and-such case, here is the factum. Of course, for matters like injunctions, for things that are routinely before the courts, we do have precedent books, and you just go and get the injunction book.

If it has created the impression that there is just a room full of loose paper, that is not the case. The material that is routinely used - this is really a question of bumping up to a higher level of performance rather than any lack of performance. Ten years ago we were very happy with what we had; it is just now the standards are a lot higher.

MR. DEXTER: Again, I don't want it to use up all of my time here, but Page 7 of the business plan, you talk about regulations and the fact that there are twice as many regulations going through now. You mentioned, just a few minutes ago, that regulations are on-line, and that is universally accessible, is it not?

[Page 25]

MR. KEEFE: Yes, and we also publish a CD, which is not what you would call a best-seller. I think we sell about 30 of them a year.

MR. DEXTER: If they are accessible on-line then they are updated.

MR. KEEFE: They are a little easier to search on the CD, faster than searching on-line, that is the advantage.

MR. DEXTER: Who does the drafting of the regulations, do you do that or does Legislative Counsel do it?

MR. KEEFE: The Department of Justice is responsible for the regulations. Legislative Counsel does the Statutes.

MR. DEXTER: I assume, therefore, that you have developed kind of an in-house expertise in the drafting of regulations.

MR. KEEFE: We are not at the stage where we want to be, but we have good quality control now. We don't have enough dedicated drafters, but we do have a style manual which is at our Web page and available to any lawyer in the province, or anybody in the province for that matter, I can't imagine anybody else who would be interested. Then we have a vetting process. We have two editors in the Registry of Regulations, they read every draft regulation, and they will send it back if it is not in accordance with the style manual, and they log. I get an annual report that shows who has been naughty and nice, essentially. We take that up, and that is a performance matter.

MR. DEXTER: You made the point you couldn't imagine who would be interested. My experience has been that if you are affected by a regulation you become very interested in . . .

MR. KEEFE: Well, in the regulation, yes. But the style manual is a little dry.

MR. DEXTER: I just wondered about what happens when your department gets into a dispute over an account with a private firm. Does that happen, and if it does, what happens when it happens?

MR. KEEFE: It depends, it goes case by case. I have one right now where I simply sent it back and said, rethink your bill. It was a one-line letter from me. On the other hand, we might write and say, we accept all this, this and this, but we would like more detail on that. It is generally very cordial, you can work these things out. I haven't had too much trouble in that regard.

MR. DEXTER: Do you end up before the taxing master?

[Page 26]

MR. KEEFE: We have wound up in front of the taxing master for party-and-party costs, but I can't recall ever taxing a lawyer's account where they have charged us anything. Part of the reason for that is we haven't used many lawyers in the Department of Justice.

MR. DEXTER: I see, okay. You don't know what the case is with other departments?

MR. KEEFE: I assume now we will be getting to know better, because we now do have this authority to help manage legal services comprehensively. Before, we just looked after our own.

MR. DEXTER: Are you putting in some kind of a system to review the reasonableness of the account you receive? I guess what comes to my mind, of course, is a case that has an ongoing nature, so that before the final account is actually received, you are receiving interim billing, and how you go about assessing the reasonableness of that account as it proceeds through the litigation.

MR. KEEFE: There are two answers to that. The first answer is, we do that now on what I will call an ad hoc basis for client departments, they may send over a bill. Our lawyers at the Department of Natural Resources, for instance, will look at a lawyer's bill for a property transaction, and they can generally say whether it is reasonable or not. It is part of their job.

I think in the long run, as one of the capacities that the Legal Services Division will have to build is the capacity to help government get the best value for money from the private sector. We don't have a system in place to routinely review private lawyers' bills, and I don't think we will be doing that immediately. I think we need to get the approval process and the procurement process in line. Once we get them fully running and getting the reports we want, then that is probably the next place we will turn.

MR. DEXTER: One minute, I guess. I wanted to ask this question very quickly, because it came up in another context. Deputy ministers who decide they need a legal opinion on something, do they have to go through your department or can they just simply pick up the phone, phone somebody and say, look, I need an opinion on this; can you send it over to me?

MR. KEEFE: Under this policy they have to first go through the Department of Justice.

MR. DEXTER: Okay. They have to and they do.

[Page 27]

MR. KEEFE: As far as I know they do. I should say that some departments, prior to this policy, formerly had retained private firms to give them advice. Where those retainers, those terms continue to run, we have taken the position that we neither approve nor reject them, they are prior to the policy. When they expire, then they will have to come to us.

MR. CHAIRMAN: I will move now to the Liberal caucus. Mr. MacKinnon.

MR. RUSSELL MACKINNON: Mr. Keefe, I would like to focus on the issue - it is a particular issue I believe you and I talked about on a previous day - of legal aid certificates.

How does that process work in layman's terms?

MR. KEEFE: I am not directly familiar with it. It is administered by legal aid. My understanding of it is that if a person is eligible for legal aid, but for some reason, probably similar to our reasons - if legal aid can't have a staff lawyer perform the service, then they will issue a certificate. Perhaps they have a conflict or perhaps there is just nobody available that day and it is an urgent matter. So the legal aid lawyer can issue a certificate which allows that person to retain a private lawyer who is willing to work for the legal aid rate. That is my understanding of it.

MR. MACKINNON: Is there a ceiling on that?

MR. KEEFE: There is a ceiling on the number of hours on the certificate and the hourly rate is low, $55 or something an hour.

MR. MACKINNON: I thought you said $100 was exceedingly low. Why would they issue a certificate for $55 an hour? What type of representation would you get for $55 if you say that $100 is . . .

MR. KEEFE: I can only say that legal aid has had extraordinarily good co-operation from members of the private Bar. I don't know what the hourly rate is for legal aid right now, but it is low. The same with the Crowns, their per diem rate is below market. I should say that the Department of Justice hourly rate has been $175 an hour when we have retained lawyers.

MR. MACKINNON: But how do you rationalize someone, or justify, or how would one even argue that you are getting the same level of representation, not to take away from the credibility of the individual solicitor, but how could a client be expected to get the same level of representation at $55 an hour as he would at a fee of $250?

MR. KEEFE: Well, as I was saying earlier, I don't find the hourly rates to be all that good a guide to quality.

MR. MACKINNON: That is quite a wide gap, $55 an hour up to $250?

[Page 28]

MR. KEEFE: Yes, it is.

MR. MACKINNON: I mean there is a lot of argument that has been made, you know, that depending upon the amount of money you had, that will determine the quality of justice. I am not a lawyer and it is not for me to say, but I may have my own opinion on that. Certainly there would be considerable evidence that if you have lots of money, then you have lots of resources to present your argument, and again I stand to be corrected. But I believe a member of the judicial even made an inference to that effect that the more financial resources you have, the better your chances of being successful because you can present, you do more research, you dig up more precedents in law, you have greater latitude, your resource staff within your law firm and so on, you can draw on a lot of resources whereas at $55 an hour, I mean that is pretty restricted. How does the Department of Justice justify that type of representation? How many people are falling through the cracks because of that type of disparity?

MR. KEEFE: First of all, the certificate rate and the certificate program is managed by the Nova Scotia Legal Aid Commission. The hourly rate is, as I say, I am not even sure if that is the hourly rate anymore. That was for many years the hourly rate. As I said earlier, I don't think hourly rates are an indicator of quality. It is simply an indication of what the market will bear for somebody. My hourly rate is below $55 an hour and I do good work. I think that the legal aid lawyers, the staff lawyers, are certainly among the best criminal lawyers, defence lawyers, in the province and it may be that the ability to hire a downtown lawyer at $250 an hour would not give you - depending on who you pick - a lawyer with the experience that a legal aid lawyer would have.

[9:30 a.m.]

I think the legal aid lawyers are generally regarded, they are the strongest in criminal law, taken as a group. Now, undoubtedly, there are individuals we all know who are in private practice and do very well in criminal law as well. They are very good lawyers, but my point is simply that you can't look at what somebody charges to determine the quality of their product.

MR. MACKINNON: I refer, without mentioning names because I know the legal restrictions, to one particular case where the parents of a child mortgaged their home. They hired a lawyer. They paid this particular solicitor over $25,000 to represent their interests in court in a criminal matter and probably a week or two weeks before the actual court date, because they had run out of money, that solicitor was not prepared to go to court and they were forced to go to legal aid for what they call these legal aid certificates, but they were not able to keep the same solicitor because this solicitor did not live in the same jurisdiction as they lived.

[Page 29]

For me there is a fundamental flaw here, that a family would be forced to mortgage their home. My understanding is that they are in the process of losing their home now. By the way, they were successful with the legal representation they received from legal aid. That wasn't the issue. The issue was the fact that over an eight or nine month period they spent $25,000 on a very high-profile and very competent criminal lawyer, only to be left outside the courtroom with no legal counsel because they were short a few thousand dollars. I know there is a process. They applied to Nova Scotia Legal Aid, and that was turned down, and then they went to the appeal committee and it was again turned down, but my understanding is, the fact of the matter is it has been done in other cases, at least one other case, where a solicitor from outside a jurisdiction made representation, was issued a legal aid certificate, but not in this case. What is the policy? Are you aware of these variations within your department?

MR. KEEFE: I was in my . . .

MR. MACKINNON: Well, legal aid does come under your purview at some juncture, it is all members of the legal profession. Any which way you cut it, ultimately your department is responsible, right? Am I right on that?

MR. KEEFE: The minister is responsible for the administration of justice, but just as we don't manage the internal affairs and policies of the Public Prosecution Service, the Bar Society or legal aid, we stay away from all three of those . . .

MR. MACKINNON: But you do have an obligation to ensure that people are doing things in a fair manner . . .

MR. KEEFE: Yes.

MR. MACKINNON: . . . I am going to speak in layman's terms because I don't know all the legal . . .

MR. KEEFE: And you will recall that I did contact the executive director of legal aid when you called me about this issue and arranged for him to give you an explanation of their policy, and I indicated at that time that having made the connection, I was . . .

MR. MACKINNON: Yes, I understand that.

MR. KEEFE: So I am assuming you got the answer, I didn't get the answer.

MR. MACKINNON: Well, I got the answer, but I didn't like the answer I received. I thought it was patently unfair to see two hard-working Nova Scotians, when they are trying to help their child in a time of need, be forced to mortgage their home to the point where they are losing it and then on the eleventh hour be forced to go to legal aid and not being allowed

[Page 30]

to complete, you know they are about nine-tenths of the way down the process and then all of a sudden they are told, no, you can't continue with this solicitor, you have to pick somebody out of this legal aid pool.

MR. KEEFE: Was that person willing to continue for the certificate, the lawyer that they had, was he willing to continue to represent . . .

MR. MACKINNON: No, because there were travel costs and legal aid was not prepared to pay the travel costs.

MR. KEEFE: So it may be based on the travel costs because there would be a lawyer who would not have travel costs who would work for the certificate?

MR. MACKINNON: That is correct. Now, my understanding is legal aid has made an allowance in at least one other case for another high-profile lawyer from outside a jurisdiction. I guess the question is, what does the Department of Justice do to ensure fair play, that fairness is within the system because within the legal aid system, the person who was saying no, if you have to take a legal aid certificate only for legal counsel in the local jurisdiction and not for outside because the outside would require the additional costs, the travel costs and so on, and I believe we were talking about $5,000 versus - what is a certificate, around $2,000 to $2,500?

MR. KEEFE: It depends, I think, on the offence. I think they have tied them to the particular offences, how many hours work.

MR. MACKINNON: I believe that the certificate was somewhere around $2,500. For the sake of $2,500, it would have been in my mind far better to allow that lawyer to complete the job after being nine months on the job, but my concern is that the checks and balances within the justice system to ensure that this type of unfairness does not continue because if they will do it in this case, how many other cases have been forced into this unfair situation? How many people have spent tens of thousands of dollars only to find out in the end they are not getting the representation they thought they were going to receive, and that is not taking away from any one particular legal representation.

MR. KEEFE: Just so we are clear, if there is a complaint about legal aid to the minister, our practice is to write to the Executive Director of Nova Scotia Legal Aid and say we have this complaint of unfairness, or high-handedness, or whatever, what is your response to that and then we will examine the - we will not get into the individual case. We will not give directions to legal aid on any individual case but, for instance, I take it your point here is that there is that unfair policy, so while we would not get involved in that particular case, if that case revealed a practice that was thought to be unfair, then the minister would examine the practice and could use his powers of direction.

[Page 31]

MR. MACKINNON: Yes.

MR. KEEFE: We only have two steering mechanisms for legal aid. One is direction and the other is money. So if the minister was satisfied that it was manifestly unfair and improper for the administration of justice, he would issue a direction saying to rescind that policy or I see that that policy is saving you this much money, here is some more money so you don't have to save that money. The third way is we might sit down and say, you know, this does not seem really fair, would you take another look at it and you have a discussion, but we would always be only at the policy level and never on the individual case.

MR. MACKINNON: And I respect that. I think you know I agree with you on that point.

MR. KEEFE: Yes, you were understanding when I explained my position.

MR. MACKINNON: And it is very difficult for a layperson, you know, because we aren't always sure if we are on the right line of pursuit so to speak, but in this particular case the director within the legal aid system was actually representing another individual in the same matter, but separately, I mean, so obviously, in my mind, there was a potential conflict of interest here that should have been addressed, but was not addressed. I would ask, if it is cold comfort for these individuals, although I often wonder, I mean somebody was mentioning about tax masters, I often wonder if perhaps this is an issue that should be referred to this tax master, or whatever.

MR. CHAIRMAN: I am afraid your time is up, Mr. MacKinnon. Also, a taxing master I think does not have jurisdiction over that kind of problem. In any event, yes, jurisdiction is restricted to dealing with a bill, an account. Mr. Langille.

MR. WILLIAM LANGILLE: I just have some generalities this morning. First of all, procurement, where it pertains to the justice system, could you give me a definition of procurement as it pertains to you?

MR. KEEFE: The departments of government, agencies, boards and commissions are required to follow the procurement policy. For the procurement of legal services that I have been involved in over the last five to six years, we have done everything from full-blown requests for proposals, advertisements in the paper, panels to review, call for proposals, review the proposals, spent many hours reviewing the proposals, having what they call beauty pageants where the lawyers come in and talk about what wonderful work they do, who is on their team, all that stuff, and that is at the extreme end. That has to be for something that is pretty big.

[Page 32]

Quite often, we are looking for somebody in the Department of Justice to do perhaps a short opinion on some area, let's say insurance law, for example. We don't represent any insurance companies. We want a lawyer who thinks like an insurance company to give us an insight into an insurance company because we may have some litigation. What we would do there is, under the procurement policy you still have to have a competitive process, but you can recognize the specialization. So we would, let's say, we could name six insurance lawyers and we would write to each of them saying we require an opinion, this is the question, how much would you charge to answer the question. Then we would, by and large, go with the lowest bidder. If we don't go with the lowest bidder, I have to file a report that says I did not go with the lowest bidder because I felt that Mr. X or Ms. X had a better handle on the problem, or something like that.

So really procurement processes vary. They have to be competitive. In an emergency you can sole-source somebody. If you need somebody in court two days hence, you can sole-source somebody, but I still have to file a report.

MR. LANGILLE: In that definition you almost answered my other questions.

MR. KEEFE: If it is a long enough answer, eventually you have to cover the questions.

MR. LANGILLE: Anyway, who would be the majority of your clients?

MR. KEEFE: The Department of Justice, by and large we really only have one client and that is - this will sound formal and stilted to you, but - Her Majesty The Queen in Right of the Province of Nova Scotia, the Government of Nova Scotia is our client. We will in shorthand refer to different departments as client departments, but essentially we only have one client. We occasionally provide some advice to the Auditor General, provided a bit of advice to agencies like the Liquor Commission, but our main client is just the one.

MR. LANGILLE: That is what I thought it would be. In your application for approval to retain outside counsel, I just want you to expand on a couple of questions here on the application, "Legal work requires expertise not available within the Legal Services . . .", could you give me an example of that and I am thinking of maybe the oil patch or something like that where you would need outside?

MR. KEEFE: Yes, okay, the appearances before the National Energy Board, for instance. As it happens, I used to do them in the mid-1980's when we had an oil boom but without any oil, but I am not available to do them anymore so the decision was taken to retain outside counsel. Now, that was done before this policy was in place, but that is an example where we will go outside, and it is also a good example of where we will now develop our own expertise so that we won't be continually going outside.

[Page 33]

MR. LANGILLE: Another one is the conflict of interest. Can you give an example of that? I have been thinking of that one and I cannot think of an example where a conflict of interest within your department would come into play.

MR. KEEFE: It really doesn't. I always tell people you have to have two clients to have a conflict of interest and where we only really have one client for the most part, then we don't get into very many conflicts of interest, but we could have a situation where we might be advising a body, or a department, and somebody might say, oh, well, the Department of Justice is just covering up, or something. So where that gets filled in, and I think it seldom gets filled in, it might arouse suspicions, it may be an apparent conflict but, you are right, I mean in general that is not a problem.

We get into what we sometimes call a role conflict where we are, on the one hand, trying to provide client services and, on the other hand, we are trying to see to it the public affairs are administered in accordance with the law and we end up telling our client department what the law requires them to do and that can be a conflict, but not a conflict of

interest, conflict as the layperson understands the word.

MR. LANGILLE: Thank you very much. I will turn it over to my colleague.

MR. CHAIRMAN: Mr. Barnet.

MR. BARNET: Mr. Chairman, I want to go back to the area that I was talking about initially and talk about the policy again. Who in the department, and how do we monitor the breaches of threshold values, if the $5,000 and the $50,000 value in the policy aren't achieved, to know that those values are strictly adhered to?

MR. KEEFE: We have to wait for the second stream of data, the finance data, to verify that. We have to look and see what was actually paid in the end. Right now, if a solicitor says it is under $5,000, then the approval is automatically generated by the computer. That really becomes an audit function. As I said, we can search now, we just don't have any comparator. We can look and say, that's funny, but lawyer x, you have approved 32 under-$5,000 accounts, and each one of them has come out at $20,000. That is definitely a goal of having the two streams running together, that we can audit our own performance.

MR. BARNET: Is there a process in place where if an outside solicitor was retained to perform certain tasks and it came in at $6,000 or $7,000 or $8,000, that somebody else has to approve the fact that there has been an overexpenditure of the threshold that was in place?

MR. KEEFE: Oh, I see, the monitoring of the bill. Our lawyer will be monitoring the bill. If they came in over, you get into those conversations. Like I mentioned earlier, we may say, I understand this was more complicated than we both thought, and that happens and that is fair, versus, you should rethink your bill, write to me when you are ready. It depends just

[Page 34]

how you feel about the lawyer at that stage. The monitoring, we always did that ad hoc, and if anything will take a greater role now.

MR. BARNET: There have been some discussions here about the use of taxing masters to determine whether or not a bill is fair. It is my understanding that at some point in time in the past, there was a large percentage of government bills that were actually put through taxing masters just to determine whether or not the bills were fair. In your opinion, is it appropriate to randomly select bills and send them off to be reviewed as an additional check or balance, to ensure that the government is getting fair value for the dollars that we spend?

MR. KEEFE: That is not a bad idea. Right now, we are concentrating on just bringing the global bill down. As I said, that is a refinement that we would be adding on, the actual management of bills, and getting better at that, and we are going to have to learn that. A lot of people aren't very sympathetic toward the government and its ability to pay. I am not sure the taxing masters would necessarily be the most favourable audience for government. There are companies you can hire who will review legal bills. They are expensive themselves. So I guess we would have to make that decision when we look and say, okay, this is what we think we will be spending year on year at the private bar, whether it is $2 million or $3 million or $1 million. How much is it worth to us to try to manage that $2 million down to

$1.75 million? There are ways to do that and we will get better at it, but your question is, should we resort to some external help? We don't know the answer to that until we know what the figure is.

MR. BARNET: With respect to the policy and its application to agencies, boards and commissions - particularly commissions - does the policy apply to the Halifax-Dartmouth Bridge Commission?

MR. KEEFE: The government first adopted the policy in June and then in September, as our business plan indicates, we were instructed to examine and, if possible, roll it out to other agencies, boards and commissions, in other words, the larger public sector. You have to deal with that on a case-by-case basis so I cannot answer your bridge commission question today.

You have to look at how arm's length they are to be from government. For instance, I can give you one example. The Utility Review Board is a commission, an agency and a board, but we don't provide them legal services because we appear before them. They would never come under this policy, but they still come into the procurement policy, but not the Attorney General's mantle, the approval policy.

We are going to move forward on that. The position I have taken right now is that I have asked all my colleague deputy ministers to ensure that the agencies, boards and commissions that report to their ministers are following the procurement policy, and that

[Page 35]

when they are sending out an RFP, they advise us and then we will look at it at that time and say is this one to which we have some stewardship? In fact, we may even look and say, we will bid. We are also a supplier and so that is the position we have taken with Halifax children's aid, for instance. When you do your procurement, we will bid and if we are competitive, we will get the work.

MR. BARNET: Well, that is simply - you sort of pre-empted my next question. With agencies, boards and commissions - and I am talking about commissions like the Halifax-Dartmouth Bridge Commission and the Waterfront Development Commission, these types of agencies - they obviously have a certain amount of legal work that they require. My question was going to be, would it not be prudent for us to try to work together closely to either bid for or provide some level of legal services to these agencies, boards and commissions to try to gain some sort of economies of scale, additional value?

MR. KEEFE: And that is exactly right. The issue is one of capacity in the Legal Services Division to do that and we have been asked to grow that capacity and we are. I would not want to announce today that this implies emphatically - it is something that we are extending on a co-operative basis.

MR. BARNET: Actually, Mr. DeWolfe has one quick question.

MR. DEWOLFE: First of all, I want to thank you in the remaining minute or so for providing me with a much better understanding of the procurement policy and the legal services that you have to offer. As I said at the outset, it is sort of out of my realm of expertise.

I will name-drop because I had the great pleasure of working very closely with some of your team - John Traves, Reinhold Endres and Bill Wilson - over a period of many months on a major project. When I say working closely, we shared office space, and so on, during the course of my previous employment and I can tell you if they are representative of the team that you have, then you have indeed a fine team. They are very fine lawyers in my mind and very fine individuals.

Having said that, I guess we will finish up in a few seconds. I wanted to get back to legal aid because I did have a concern with it. Am I confusing legal aid and family maintenance? I wonder if we are talking the same thing because in Community Services - you said that you are taking over all community services - does that include the family maintenance?

MR. KEEFE: They are two sides of the same coin in child protection, not family maintenance, but child protection. If Community Services apprehends a child, it is not uncommon for legal aid to represent the parents. So, legal aid would be coming in on the

[Page 36]

other side of the case against us or against the private lawyer. You are right to equate them, but they are actually opposite sides of the fence.

MR. DEWOLFE: But the legal aid lawyers report to Justice.

MR. KEEFE: Legal aid lawyers report to the Legal Aid Commission, and we fund them but we don't steer them.

MR. DEWOLFE: I believe my time is up.

MR. CHAIRMAN: It is, yes. I would like to thank the Deputy Minister of the Department of Justice, Mr. Keefe, for having appeared before us this morning. It was a very useful discussion, so thank you.

If I may just keep the members of the committee, only very briefly, to advise them as to what is coming up in the next two weeks. I would ask Ms. Stevens, the Committee Coordinator, just to let us know the current state of play.

MS. MORA STEVENS (Legislative Committee Coordinator): We had a little problem with OTANS in scheduling, so they are now on for May. What I have done is put another annual report session next week, if that is okay. Of the recommendations that were discussed, I just got the transcripts so I will have those done hopefully by Thursday and get them out to you. Then, I am working on heritage, the museums and Tourism as well, to sort of fall in late in the month and then into May, at the beginning.

MR. CHAIRMAN: So, that is where we stand at the moment; notice will go around.

If there is nothing else, we are adjourned.

[The committee adjourned at 9:58 a.m.]