Public sector employers have discovered a litigation strategy that would bankrupt most private firms. They simply outspend the people complaining about them. Allan Halse, director of employment advocacy group CultureShift NZ, says agencies try to “exhaust employment complainants”, with legal spend that apparently exceeded $900,000 in a single case. In early October he wrote to Finance Minister Nicola Willis asking for ministerial intervention.
That request deserves a serious hearing. This is not mainly a story about workplace culture. It is a story about incentives, and the incentives are broken.
The bills keep turning up
Halse’s claim lands at the end of a year of overlapping disclosures. In February 2026, The Post found the public service had paid at least $7.5 million in bullying, harassment and discrimination settlements since 2020, almost all under confidentiality clauses, with millions more in legal fees on top.
The agency-level detail was the damning part. Health New Zealand recorded 205 settlements worth $4.08 million, plus at least $624,310 in external legal advice. The Department of Internal Affairs paid $212,353 across eight settlements and $208,951 in legal fees, so the lawyers cost nearly as much as the payouts. At the Ministry of Justice, legal fees ran at roughly 58% of the settlement total. The Ministry of Social Development logged 245 settlements, the most of any agency, and withheld the costs entirely. HCA Mag’s own OIA requests to a dozen agencies confirm the pattern, with nearly all agreements kept confidential.
Then there is the Civil Aviation Authority, which spent $1.1 million on external lawyers amid 68 formal workplace complaints. PSA national secretary Duane Leo calls the spend “out of step” with other agencies. One CAA employee notes the authority has its own in-house legal and HR teams, which makes the external bill “very significant”. So much for outside counsel as a last resort.
Even policy fights get the treatment. MBIE, the country’s largest agency, spent $102,451.50 fighting a PSA challenge to its former work-from-home policy, excluding staff time, while the wider public sector was cutting jobs.
Five years and $600,000 to make a point
The attrition tactic has a track record. Between 2018 and 2024, the former Bay of Plenty District Health Board and then Health NZ spent more than $600,000 plus GST over five years pursuing contempt proceedings against Halse and his client, dismissed cardiac physiologist Ana Shaw. The case was eventually settled. Whatever the merits, it is hard to imagine any board approving that spend against an individual if the money were its own.
Nobody is counting properly
The disclosed figures almost certainly understate the real cost. A 2023 ACC OIA response showed the agency spending $256,162 to settle nine grievances through court proceedings in 2020-21, then $18,000 to settle three in a later period. That is not cost control, it is a lottery. More recently, Health NZ disclosed $46,178.94 in outsourced legal costs on a single dismissal case while admitting it cannot separately track the internal staff time involved. Multiply that blind spot across every agency and the true bill is anyone’s guess.
A private firm would never get away with this
Put a $900,000 bill for one employment dispute in front of a private company’s board and someone would be asked to justify it. Lenders and shareholders would want to know why. In a small firm, the owner would feel it directly in their margins. That discipline forces a cost-benefit judgement: settle, fix the problem, or fight only when the case is genuinely worth it.
Agencies face none of that. Legal budgets are backstopped by consolidated revenue, no manager loses a bonus for losing a case, and confidentiality clauses mean the public rarely learns what went wrong. The rational strategy, when money is no object and the other side is paying from a household budget, is to wait them out.
The government has addressed only half the imbalance. In 2025, then-Public Service Minister Judith Collins and Commissioner Brian Roche announced that agencies would have to “consider providing legal support” to complainants alleging serious misconduct. Helpful, but it did nothing to cap or scrutinise what agencies themselves spend.
What Willis should do with the letter
A Finance Minister who talks about value for money has an easy win here. Require agencies to report full litigation costs, including internal hours, per case. Set thresholds above which a chief executive must sign off and justify further spend. Publish the totals annually. None of this needs new bureaucracy, just the kind of reporting any well-run business already expects. If agencies are confident their legal fights are worth it, they should have no objection to showing the receipts.
Sources
- Newsroom: Taxpayers foot millions in legal bills as govt agencies fight employees (2026-11-04)
- The Post: Millions paid, complaints hidden – how the public service secretly settles workplace bullying (2026-02-09)
- HCA Mag: Bullying claims in public services costing taxpayers millions (2026-07-31)
- NZ Herald: CAA spent $1.1m on external lawyers amid 68 workplace complaints (2026-10-18)
- Newstalk ZB: The PSA wants the largest Government agency to apologise for its six-figure spend on legal costs relating to a working from home policy (2026-06-23)
- Leighton Associates: Let it go, Pete! (2024-06-10)
- FYI: ACC OIA response GOV 024653 – Personal grievances lodged by ACC employees (2023-05-22)
- FYI: Health NZ OIA response HNZ00207285 – Legal costs in Healey v Health New Zealand (2026-09-16)
- NZ Herald: NZ public sector will have to ‘consider’ paying for lawyers for sexual harassment complainants (2025-07-31)
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