Shared Services series
The following article is the first in a series where we invite in-house lawyers in various organisations to share how the Shared Services rules changes will impact their provision of legal services. First up, Bruce Northey, General Counsel, Auckland District Health Board.
Shared Services - District Health Board Perspective
A long-standing advocate of changes to Rule 15.2 to enable in-house lawyers to advise a wider group of related entities is Bruce Northey, General Counsel at Auckland District Health Board. ADHB has embraced the new opportunity to allow in-house legal expertise to be available across the sector and has been quick to formalise arrangements. This is consistent with a statutory mandate that DHBs are to collaborate with other agencies for effective and efficient delivery of health services. Several DHBs have shared executive and corporate functions - Auckland and Waitemata DHBs have a common chairman and funder, while all DHBs have regional shared services entities. Collaboration in respect to legal services is therefore a necessity.
Bruce immediately recognised several opportunities under the new Rules, while being alive to the risks and challenges – essentially conflicts. He says "I have already discussed with my senior colleagues at Waitemata, Counties-Manukau and [shared services subsidiary] healthAlliance about more formal sharing of expertise, and providing backup when another senior lawyer is on leave. Fortunately, DHBs are in a collaborative, not a competitive, environment thus potential conflicts are rare. Also, we have long had in place a robust in-house network nationally. These changes will now enable advice to be shared nationally, protected by legal privilege." The changes also enable the development of greater subject matter expertise and centres of excellence. ADHB Legal Services, acting for the Auckland Regional Public Health Service, has acquired specialist knowledge of public health matters relevant to licencing of premises under the Sale and Supply of Alcohol Act. Their advice is now sought by Medical Officers of Health employed by other DHBs. The new Rules enable them to provide this advice protected by legal privilege. Bruce would expect that across the wider Crown/public sector there is considerable potential to seek input from other Crown organisations who have developed their own areas of expertise.
Bruce has already had formal approval by way of resolution from the ADHB's Audit Committee authorising ADHB lawyers to provide legal services to a defined group of related entities (and other Crown organisations with the prior approval of the Chief Financial Officer (CFO)). This approval also expressly stated, for the protection of the individual lawyers, that "the indemnity in the standard Independent Employment Agreement is to apply when an ADHB lawyer is providing legal services to another Crown organisation." This is consistent with the New Zealand Law Society provided template for in-house lawyers issuing terms of engagement to their new ‘clients’. The NZLS recommends that in-house lawyers and their employer consider:
1. On what financial basis the services will be provided;
2. Is there insurance covering the provision of the regulated services to the non-employing entity (professional indemnity arrangements);
3. The complaint procedure if the non-employing entity is not happy with the service.
ADHB Legal Services has determined it will not render an invoice or charge a fee of any kind for the services provided to other entities unless that was a condition of the approval by the CFO. Existing professional indemnity insurance arrangements would remain unchanged and ADHB lawyers would be covered by the indemnity in their independent employment contract when advising an external party (as stated above). A simple complaint procedure has been established which enables the non-employing party to escalate concerns to the CFO.
Bruce says the Audit Committee were very supportive of these changes while being alive to any potential conflicts – one of the board members had to declare her interest as a director of a shared services agency that would be the recipient of the proposed arrangement. However, all were delighted at such an overt example of collaboration occurring within the sector. Bruce has already redrafted and sent out a handful of client services letters to his new external ‘clients’, and is enthusiastic about the professional opportunities the change may provide for him, and his colleagues, at Auckland DHB.
For further information about the new rule or if you have any queries, please contact either [email protected] (ILANZ Executive Officer) or [email protected] (NZLS Principal Advisor).