OPINION: The replacement of former Northern Territory chief justice Brian Martin as head of the royal commission into juvenile detention is welcome news for many Territorians.

He will be replaced by former Queensland Supreme Court judge Margaret White and Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda.

The treatment of juvenile offenders in the Territory directly implicates a large number of Indigenous individuals and families.

It is thus only right that in investigating potential illegality or misconduct in the juvenile detention system, we should have commissioners who enjoy the trust of both the non-Indigenous and Indigenous communities.

However, the controversy over Justice Martin was not simply about representation. It was also a product of another fundamental, less visible mistake; the appointment of a consummate legal "insider" in a situation that clearly called for the appointment of a legal "outsider".

This is also a mistake for which, as the federal government's chief legal officer, Attorney-General George Brandis should take responsibility.

The NT is a small jurisdiction, where many of the legal and political elite are well known to each other. It is thus no surprise that the former chief justice's daughter worked for the NTs Attorney-General, or that Justice Martin himself might have presided over trials or appeals that led to the detention in question.

This is the kind of overlap in legal and political circles, and cases, that is inevitable in a small jurisdiction of this kind. But it also raises distinct challenges in ensuring appropriate trust in legal and political institutions.

In small jurisdictions, the inevitable overlap between lawyers, judges and politicians will mean that it is much harder to foster a perception among ordinary citizens of true impartiality and independence on the part of the judiciary.

There is good reason to criticise George Brandis and his government. Not only did Brandis fail to respect the fundamental principle of Indigenous involvement he also failed to apply a basic principle of institutional design.

Rosalind Dixon is a Professor of Law at UNSW Australia.

This opinion piece first appeared in the Australian Financial Review.