Wellington, Dec 8 NZPA - The fallout from a damning review of legal aid has continued with the chief executive of the Legal Services Agency (LSA), Tim Bannatyne, losing his job.

The recent report by Dame Margaret Bazley led to the resignation of four members of the agency's board and the new chairman Sir John Hansen said he regretted to announce that the position of chief executive had been "disestablished" and Mr Bannatyne would be replaced by a transition manager from the Justice Ministry.

The Government decided swiftly after the report that the agency would be wound back into the ministry.

Mr Bannatyne's last day at work would be December 18, but Sir John said the new board's decision did not reflect his calibre or contribution to running the agency for the last nine years.

"The LSA needed to focus on implementing any decisions Cabinet may make concerning moving the LSA's functions into the Ministry of Justice," Sir John said.

"At the same time it is critical that we maintain momentum in our business as usual services."

Stuart White, who is the ministry's general manager of special jurisdictions, will now take over managing the changes at the agency.

Dame Margaret's report said some lawyers and defendants were "abusing the system to the detriment of clients, the legal aid system, the courts and the taxpayer".

She believed there was evidence that many lawyers had been acting corruptly in doing their work.

Administrative costs were out of control and the LSA seemed paralysed and unable to deal with the legal sector, the report said.

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