Like many New Zealand psychiatric hospitals, Lake Alice was largely self-sufficient, with its own farm, workshop, bakery, laundry, and fire station.

[2][3] Former patients of the hospital's child and adolescent unit made allegations that abuse took place there during the 1970s, including the use of electroconvulsive therapy without anaesthetic and paraldehyde injections as punishment.

[4][5] The New Zealand government issued a written apology in 2001, and has paid out a total of NZ$10.7 million in compensation to a group of 183 former patients [6][7] but refused to acknowledge and offer redress for the long term effects of physical, sexual, and psychological abuse and torture.

[10] In June 2021, the Royal Commission of Inquiry into Abuse in Care held an 11-day hearing into the practices of psychiatrist Selwyn Leeks and the Adolescent Unit.

[14][15] On 27 May 2024, a former child and adolescent patient of Lake Alice Hospital won a court appeal for ACC to cover injuries suffering during electro-shock therapy during the mid-1970s.

[16] On 30 October 2024, cabinet minister Erica Stanford confirmed that the New Zealand Government would address a parity issue in a NZ$6.5 million compensation settlement that it had reached with 95 Lake Alice survivors in 2001.