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Why our legal aid system is broken

30 Jun 2022

| Author: Jenni McManus

On Budget night this year, and with much fanfare, the government announced a $148.7 million injection of funds into New Zealand’s legal aid system, to be drip-fed over the next four years.

The money would, the government said, “ensure continued access to justice by significantly strengthening the legal aid scheme”. It would also allow for changes to woefully low financial eligibility thresholds and boost the equally low remuneration for legal aid lawyers.

An additional $41.4m has been granted to meet the expected increase in demand for legal aid when the income thresholds change on 1 January next year and an estimated 93,000 more people become eligible.

The Budget announcement was received with enthusiasm by the Legal Aid Commissioner, Tracey Baguley. In a note to the profession, she acknowledged there would be no increase for legal aid lawyers working on fixed rates (the bulk of legal aid work) and that there would be no raise either for duty lawyers, working for $86 an hour.

Nevertheless, Baguley said, “This is exciting and a huge step in the right direction for the legal aid scheme”.

Lawyers, not surprisingly, view the Budget announcement somewhat differently, particularly those who have been lobbying the government for years for sustainable fees for legal aid work and realistic income thresholds for their clients.

David Fleming, from David Fleming Employment Law, is in no doubt the legal aid system is broken. “When the income thresholds increase next year, it will still be the case that a person working on the minimum wage and with one dependent will be considered too wealthy to get legal aid,” he says.

He would like to think that someone on the minimum wage ($44,096) would qualify for legal aid and the system would be structured in such a way that a law firm could run a sustainable legal aid practice.

Although the Budget funding is a good start, it’s disappointing, he says. The system is broken when you consider its purpose: providing access to justice without effectively requiring lawyers to subsidise it.

The current income threshold for a single legal aid applicant is $23,326. For someone with a partner and one dependent, it is $36,940. At the upper end, the cut-off point for an applicant with a partner and five kids is $75,404. These thresholds, set in 2017, will rise by 15% from 1 January next year and by 1.9% for each of the following three years.

But, apart from applicants with large families, those on the minimum wage will still be ineligible, not to mention middle-income New Zealanders who also struggle to access legal representation. Only low-paid part-time workers, beneficiaries, superannuitants and those in custody are likely to qualify.

Pressing issue

Chief Justice Dame Helen Winkelmann devoted a special section of her inaugural annual report earlier this year to what she described as “the pressing issue of legal aid”.

“A well-functioning democracy needs a fair, just and sustainable legal aid system to provide access to justice and to promote respect for the rule of law,” she said.

“New Zealand’s legal aid system is underfunded and some of its legislative and regulatory settings are creating their own barriers to access to the courts and legal representation. These deficiencies are causing the system to fail to meet its objectives of facilitating access to justice and upholding the rule of law.”

There was a pressing need for investment in the legal aid system, Chief Justice Winkelmann said, and debt repayment thresholds needed to be lifted for those who received legal aid as a loan. She noted that the hourly rate for lawyers had not risen since 2008, while fixed fees for criminal legal aid had not been adjusted since 2016.

When compared with the adult minimum wage (then $41,600), legal assistance is out of reach for many and thresholds had not kept up with costs and wage inflation, she said.

Senior criminal barrister Julie-Anne Kincade QC agrees with those who say there’s no silver bullet for fixing the system.

“We welcome the attention that Cabinet is giving to the issue and the fact that there is movement there to avoid the situation that exists in the UK, where legal aid lawyers have been forced to take strike action,” she says. “

“They haven’t been able to find lawyers to cover the cases that existed even before the strike action. The criminal system in the UK is at crisis point so I really do welcome the fact that here in New Zealand we’re trying to avoid reaching that point.”

The increase in people eligible for legal aid is also welcome, Kincade says, but who is going to do the work?

In the area of criminal law, there is a bottom-heavy pool of lawyers at the junior level, partly because several senior criminal legal aid lawyers have been appointed to the bench. And because there have been few trials over the past couple of years, a good proportion of these junior barristers are not trained to handle jury trials.

The remaining senior legal aid lawyers are “swamped”, Kincade says. “We are doing our best, but we are a very small pool of people to cover a lot of work.”

There are also few lawyers doing legal aid work in some geographical areas of New Zealand, especially in the South Island, where they’re spread very thin. “So, again, there is an overall concern about who’s going to do these increased cases when more people are now entitled to legal aid.”

Juniors coming through the ranks need to be supervised, especially for trial work – a point also taken up by barrister Emma Priest.

Even if the money were available, there is no capacity in the profession to train enough juniors to meet the need, Priest says. And the workload is taking its toll. “What we do is vocational but there is a tipping point for us all in terms of wellbeing and burnout and capacity.”

Priest was hoping the Budget would allocate funding for training junior barristers for trial work. At the moment she is meeting the costs herself.

“I have a junior, but I have to pay for her to be with me in a trial for a week at my cost and I do that, but it means I make no money for that trial. Almost 100% [of defendants] are now electing trial by jury so we need jury trial lawyers and the only way they can get experience is by junioring and the only way they can junior is by senior lawyers having the time and the inclination to take them on. Most juniors don’t want, or aren’t able, to do that for free.”

Nominal fee

Funding for juniors, Priest says, is where the legal aid system would get most bang for buck. She proposes a nominal fee of $500 a day, to be funded from the legal aid budget, to cover trial preparation and time spent in court. “That would allow us to take on juniors and get them up to speed very quickly.” Many of these juniors are on the cusp of reaching the level required to do more complex work. They meet the criteria but for the fact they need jury trial experience.

For Priest, it’s all about succession. “We need to ensure that we’ve got more people coming through the ranks,” she says. This will become more important from next January when the thresholds change, and more people become eligible for legal aid. “It’s quite terrifying – the prospect of more clients and no more lawyers,” she says.

She says the demand is so high she is turning away between five and 15 briefs every week. Fleming, whose firm began doing legal aid work only six months ago, says he is getting inquiries from as far away as Taupo and is having to turn down work.

Erosion of rates

Both the ADLS Employment Law committee and the New Zealand Bar Association (NZBA) have lobbied the government about the increasingly desperate situation.

In a letter to then Justice Minister Kris Faafoi in November last year, the committee said with only 20 employment legal aid providers across the whole country, it had become a significant access-to-justice issue. Those providers could not meet the demand from “vulnerable New Zealanders” with limited financial means who need employment advice and representation.

NZBA said the fixed fee schedule meant legal aid lawyers were often working for an effective hourly rate of $120, plus gst – a rate that was set in 2008 and has not been increased in the Budget. It was a “significant erosion of the rate of pay for such work” which in many cases was below $120. Some legal aid lawyers were working for $100 an hour, NZBA said, and for the majority of work the rate was less than $80.

As an example, NZBA cited a fixed fee of $580 for “pre-proceedings activities”. Typically, these would require a minimum of 10 hours’ work and include taking instructions, attending the client, reviewing relevant files and reports, defining the legal and factual issues, drafting a statement of problem, preparing a legal aid application, raising a personal grievance, receiving and considering the response and reporting back to the client. All for $580.

Keziah Singleton, of David Fleming Employment Law, says in the past couple of years the Employment Relations Authority [ERA] has become more technical in its requirements so a document that might have once taken only a couple of hours was now taking considerably longer to prepare. But the fixed rate has remained the same.

Singleton cites a fixed rate of $480 for meeting a client, reading the documentation, advising the client and raising a personal grievance. “That’s four hours at their nominal rate. I don’t want to sound like a greedy lawyer, but [the rate is] quite low,” she says.

Fleming points out that for employment lawyers, a lot of work happens outside the courtroom. “The fixed fee schedules are very low and the amount of time you’re paid for an [ERA] hearing has no connection with the amount of work required.”

The hourly rate, rather than the fixed fee, kicks in only for appearances in the ERA, court or in mediation.

From today these hourly rates will increase slightly but firms like Fleming’s will still be out-of-pocket when doing legal aid work. Singleton says their fees are around the scale costs that might be awarded by the Employment Court, scale costs being about two-thirds of the market price.

“Even so,” she says, “our legal aid work is about half of what we would normally charge.” Fleming says the firm does legal aid because it is part of what it wants to offer “but we actually lose money on every legal aid case we do”.

For criminal legal aid lawyers, the hourly rate for the lowest-level cases will rise to between $103 and $119, depending on experience. For the highest-level cases – for example, homicide, and for cases in the Court of Appeal and Supreme Court – the rate ranges from $146 to $178. The new Family and District Court rates range from $119 to $139. For the High Court, they range from $134 to $167 and from $146 to $178 in the Court of Appeal and Supreme Court.

Because of her seniority, Kincade is on one of the highest rates but says the money is still “risible”. “We do it because we feel sorry for people,” she says, especially for things like parole applications. “It is the same with Family Court lawyers – you want to try and help people in need.”

The fix, she says, is partly to throw money at the problem. “We need more lawyers and more attractive rates. [The Budget] was a good start but more needs to happen.”

One area that’s ripe for change is the way the legal aid system treats applicants who own houses. “They expect you to remortgage yourself instead [of using legal aid],” Kincade says. “I find that very challenging.

She would like to see those who are acquitted being released from the obligation to repay legal aid, as happens in the UK.

“I also think it would be helpful if judges understood how we’re paid. Sometimes we get criticsed and we think ‘well, I’m trying my best with very limited time and limited resources’. Sometimes things just can’t get done. Within the current system, we have to do a lot of work that isn’t really remunerated, and we do that just to get the job done.” ■


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