A Law Commission report tabled in Parliament on Wednesday concludes that politicians should not be making decisions about the detention of mentally ill offenders.
The report recommends setting up a new specialist tribunal to deal with the ongoing detention of special patients committed indefinitely by the courts.
Currently the Minister of Health decides when mentally ill patients will be discharged from compulsory care.
Commission deputy president Warren Young says that job is not appropriate for a minister, because the decisions are complex and need to be managed expertly and independently.
The report says cases could be handled by the current Mental Health Review Tribunal and should be chaired by a judge, with three to five experts.
The report also recommends the defence of insanity be left alone.