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“State supported aid arises from the basic responsibility of the state to ensure justice for its citizens, and this responsibility is not truly fulfilled so long as any citizen is prevented by lack of means from having his grievances aired and determined fairly and adequately by the courts. The same concept is behind Article 7 of the Universal Declaration of Human Rights, which provides that all shall be entitled, without discrimination, to the equal protection of the law. This requires that the balance of justice should not be loaded in favour of the man with means, the large corporation or the state itself.” (Rt Hon J R Marshall, NZPD vol 363, 1969, 2680)
467 PUBLISHED IN MARCH 1997, Women’s Access to Civil Legal Aid (NZLC
MP8) presented for comment a range of concerns women had raised about the operation of the civil legal aid scheme. The importance of civil legal aid was emphasised by women because of its relevance to the problems, and especially those connected with family breakdown, which are most likely to lead to women becoming parties in the justice system’s dispute resolution procedures. The need for an examination of the concerns raised about the scheme was further supported by the fact that the criminal legal aid scheme, but not the civil scheme, has been the subject of a comprehensive study commissioned by the Legal Services Board. (Saville-Smith et al, 1995)
468 The responses to the consultation paper confirmed the existence of a number of serious impediments to women’s access to legal representation by means of civil legal aid. Among them are impediments which cause inequities between people in the group which the scheme is intended to assist. That result flows, for example, from impediments:
• which prevent some low-income New Zealanders from obtaining legal aid even although they are eligible for it;
• which mar the quality of the services that are provided to some legally aided clients; and
• which cause variations in the conditions on which legal aid is made available in different parts of New Zealand.
469 The most obvious impediment to women’s access to quality legal representation by means of civil legal aid, however, is the erosion over the last decade of the financial threshold for eligibility for aid. This has the effect of steadily reducing the size of the group which is eligible to receive civil legal aid and increasing the size of the group which is ineligible for it but unable to afford the lawyers’ services that are needed to take or defend proceedings in most courts.
470 Inevitably, measures to redress the impediments which women identified will have fiscal implications. Most obviously, if eligibility for civil legal aid is extended in response to its shrinking availability but without other cost-saving changes, the state, and therefore taxpayers, will be faced with an increased bill for justice system services. Already, the costs of legally aided civil litigation are rising annually, despite substantial efforts in recent years to contain them. In the 1997/98 year, the civil legal aid scheme cost the state $40.32m (see chapter 5, para 382).
471 Both social and institutional factors drive the costs of civil legal aid. For example, if New Zealanders’ needs for certain legal remedies increase, or if the law extends the protection available to vulnerable groups, greater demands will be made on the scheme. This has been particularly evident in the use made of civil legal aid in recent years to fund review hearings under the Mental Health (Compulsory Assessment and Treatment) Act 1992 and hearings for protection orders under the Domestic Violence Act 1995. The latest annual report of the Legal Services Board notes that enactment of the De Facto Relationships Property Bill will further increase the number and costs of civil grants. In addition, recent changes in the policies of the Crown Forestry Rental Trust, relating to funding assistance for Waitangi Tribunal claims, have meant that legal aid expenditure on those matters has risen from $400 000 in 1997 to $2m in 1998. And, during 1998, a further $4m of legal aid commitments to Waitangi Tribunal claims were incurred. (Report of the Legal Services Board for the year ended 30 June 1998, 29–30)
472 In addition to those cost-drivers, all the factors which determine the costs of civil litigation are reflected in the costs of legal aid. Accordingly, any financial savings that might be made by changing, for example, court procedures, the management of cases or lawyers’ charging practices, will meantime be borne as costs to the state and to clients, including legally aided clients who are required to make some financial contribution towards the costs of their litigation.
473 Civil legal aid therefore provides a financial bridge into the existing civil justice system for low-income New Zealanders who are seeking to resolve disputes which emerge from the social facts of New Zealand life and which are responded to by law in the manner which Parliament considers appropriate. With those much larger forces impacting on the scheme, efforts to improve its effectiveness and efficiency cannot be confined to the four corners of the scheme itself. Equally, however, when viewing the scheme within the broad social and institutional context which surrounds it, sight must not be lost of the fact that, as is discussed below, New Zealand women have a particular interest in the present arrangements, whatever their faults. Accordingly, any further-reaching reforms must be designed to be responsive to women’s diverse needs.
474 Since its introduction in New Zealand in 1969, civil legal aid has been predominantly used by women in family proceedings. Research conducted by the (then) Department of Justice shows that, in 1979, (before the creation of the Family Courts), more than 93 percent of civil legal aid applications were made for “domestic proceedings” in the District Court. That research also shows that women were the large majority (some 84 percent) of civil legal aid recipients in 1979 and that the typical applicant for aid “was female, aged 20–40 years, living apart from her husband, working at home and in receipt of a domestic purposes benefit”. At that time, 88.5 percent of legal aid applicants were assessed to have no “disposable income” and 90 percent to have no “disposable capital” (as defined, see paras 483 and 485 below). (Access to the Law, Appendix 5, at 75, 85, 115, 101) The similarity with the profile of today’s civil legal aid recipients is striking (see chapter 5, paras 394 and 395).
475 The context within which the civil legal aid scheme operates makes it unsurprising that women use it to the extent, and for the types of proceedings, that they do. That these are vital factors to be considered in any efforts to bring about changes in or affecting the legal aid scheme is made plain by the Ministry of Women’s Affairs’ explanation of the benefits of policy analysis that is mindful of women’s circumstances. In particular, the Ministry cautions that:
Orthodox economic analysis is often gender blind because it assumes a generic ‘rational’ individual, and does not analyse the different needs and responses of women and men. Hence, it can fail to define the problem adequately. (The Full Picture: Te Tirohanga Whänui, 10)
476 This chapter examines the impediments women identified to their use of civil legal aid in order to highlight, first, the ways in which improvements can be made to the civil legal aid scheme to “promote the just treatment of women” within the prevailing social and institutional context. The recommendations made at the conclusion of this chapter are directed to that immediate goal.
477 Second, this examination of the civil legal aid scheme, together with the examinations conducted in other chapters, is intended to assist in the identification and design of further-reaching reforms to the civil justice system which will promote the just treatment of women. Some suggestions are made in chapter 12 about likely areas and directions for such reforms.
478 Overseen by the Legal Services Board under the Legal Services Act 1991, the civil legal aid scheme is administered at local level by the district legal services committees and their subcommittees. It provides funding to enable applicants who meet the statutory criteria to obtain representation by a solicitor and, if necessary, a barrister. (Legal Services Act 1991, s 20; see chapter 5, para 384) A brief summary of the scheme is supplied here.
Financial eligibility criteria
479 Civil legal aid is available to applicants with “disposable income” of less than $2000, or such greater amount as the district subcommittee may in special circumstances approve. (s 28(1); Reg 35, Legal Services Regulations 1991)
480 Aid may be refused if the applicant has “disposable capital” of more than $2000 and the district subcommittee is of the view that the applicant can afford to proceed without civil legal aid. (s 28(2); Reg 35)
Initial contribution
481 A $50 “initial contribution” must accompany all applications for civil legal aid unless an exemption is applied for and granted by the district subcommittee on the grounds that:
• payment would cause the applicant substantial hardship (s 37); or
• the application is for orders under the Domestic Violence Act 1995 (s 49A).
The further contribution
482 At the time an application for aid is completed, the applicant’s lawyer must work out the applicant’s “disposable income” and “disposable capital”, and the amount of any “further contribution”. The Act requires the further contribution to be paid by a person who receives aid unless the district subcommittee varies or waives it on the ground that payment would cause the person “substantial hardship”. (s 37)
Calculation of income
483 Disposable income is arrived at by deducting from the net annual tax-paid income of the applicant (and sometimes her or his spouse) a series of allowances for the applicant and others associated with or dependent upon the applicant. The deductible allowances from an applicant’s income are as follows:
Status of applicant Deductible allowances from annual income
Single person $9841
Applicant with a partner $14 668
(ie, $9841 plus additional allowance
of $4827)
Sole parent or sole applicant $10 361 plus $1872 for the first or only
with other dependants child or dependent relative and $832
for each additional child or
dependent relative
Applicant with a partner and $10 361 plus $4827 (partner’s allowance)
children or other dependants plus $1872 for the first or only child or
dependent relative and $832 for each
additional dependant.
(Reg 36, Legal Services Regulations 1991)
484 The further contribution from disposable income is calculated on the following basis. For the first $1000 of income above the deductible allowances, applicants are required to contribute $1 for every $2 of income. For the next $1000 of income, applicants are required to contribute $2 for every $3 of income. For example, an applicant who has $2000 of income in excess of the deductible allowances will be required to make a further calculated contribution of $500 plus $666.66, a total of $1166.66. After $2000 of income above the allowable level, applicants are required to contribute all excess income towards the cost of their legal representation.
Calculation of capital
485 Disposable capital is calculated by deducting:
• the value of the applicant’s interest in a home. A sole applicant’s interest in a home may be disregarded by the district subcommittee if it is less than $41 000. When another person’s resources are taken into account, the subcommittee may disregard the interest in the home of both the applicant and the other person if their combined value is no more than $82 000[23] (Legal Services Board (Civil Legal Aid Applications) Instructions cl 3);
• the value of any vehicle used principally for domestic purposes;
• the value of the person’s household furniture, household appliances, personal clothing and tools of trade;
• the amount of contingent liabilities which may mature within the next six months;
• the amount of any unsecured debts; and
• the sum of $500 where the person has a dependent child, spouse or relative, or where resources of others are being calculated as the applicant’s resources (s 29(2)(f)).
486 With regard to the further contribution from disposable capital, the applicant must contribute two-thirds of the value of her or his disposable capital up to $2000, and then the value of all disposable capital in excess of $2000. (s 37)
Merits eligibility
487 Civil legal aid is available for civil proceedings in a range of courts and tribunals in New Zealand. (Legal Services Act, ss 19 and 34(2)) Aid may be refused by the district legal services subcommittee if the applicant does not have reasonable grounds for taking or defending the proceedings or for being a party to the proceedings. (s 34(1)) Aid may also be refused in original proceedings if:
• the applicant’s prospects of success are not sufficient to justify the grant of aid; or
• the nature of the proceedings and the applicant’s interests in them in relation to the likely cost suggest that a grant of aid is not justified; or
• for any other cause it appears unreasonable or undesirable that the applicant should receive aid in the particular circumstances of the case. (s 34(3)(e))
Recovery
488 Both unpaid contributions (whether the initial $50 or the calculated further contribution) and the costs (minus paid contributions) of the legal aid provided to the successful applicants (ie, the costs of lawyers’ fees and disbursements) automatically become a charge for the benefit of the Legal Services Board over any property “recovered or preserved” by the aid recipient in the proceedings. (s 40(1)(c)) The district subcommittee also has a discretion to impose charges on other property, where it is of the opinion that it would not be “unjust or inequitable” to impose such a charge. (s 40(1)(d) and (2))
DEFECTS IN THE CURRENT SCHEME
489 The weaknesses with civil legal aid delivery which this study has highlighted relate to:
• the erosion of eligibility for civil legal aid;
• in light of that erosion, the difficulties posed for aid recipients by the recovery mechanisms of the scheme;
• inadequate public awareness of the civil legal aid scheme;
• New Zealanders’ uneven access to legal aid lawyers;
• the complexity of the application process;
• some lawyers’ failure to advise on eligibility for legal aid;
• the unavailability of legal aid for advice unconnected with litigation;
• possible inequity in the operation of the capital test;
• the limited control of the quality of legal aid lawyers’ service; and
• the scope for inconsistent administration of the civil legal aid scheme.
Each of these matters is considered in turn.
490 The Legal Aid Act 1969, which established New Zealand’s first civil legal aid scheme, stated in its Long Title that it was intended to assist people of “small or moderate means”. Its successor, the Legal Services Act 1991, states that its intention is to make legal aid and legal services more readily available to people of “insufficient means”. The 1991 Act maintains the 1969 Act’s income and capital “tests” for determining a person’s financial eligibility for legal aid.
The income test
491 The income test (see paras 483 and 484), which requires specified amounts to be deducted from an applicant’s income, runs the risk of becoming outdated, as inflation and other forces affect New Zealanders’ income levels over time. The dollar values of the deductible allowances were last reviewed in 1987 and were then transported into the new scheme of the Legal Services Act. (Legal Aid Regulations 1970, Amendment No 14 1987/271; Reg 36, Legal Services Regulations 1991) The $2000 limit above the deductible allowances was set by the 1969 Act, and has not been revised since.
492 In 1983, the Working Party on Access to the Law expressed serious concerns about the erosion in the value of the income test since 1969. The 1987 review of the deductible allowances from income went some distance towards meeting those concerns. But the working party identified other problems with the income test which have not been addressed. One problem relates to the different amounts that the test allows to be deducted from income for (a) the spouse of an applicant and (b) the first dependant of a sole applicant. In 1983, the difference between those amounts was $312: an applicant with a spouse could deduct an allowance of $2889 for the spouse, while a sole applicant could deduct $2557 for the first dependant. The working party recommended that the (upgraded) value of those deductible allowances should be identical. (Final Report, 1983, 21)
493 As a result of the 1987 review, the amounts were upgraded, but a difference (of $2435) remains. An applicant with a spouse can deduct from annual income the amount of $4827, on top of a base allowance of $9841: a total of $14 668. A sole applicant with one dependant can deduct from annual income the amount of $1872, on top of a base allowance of $10 361: a total of $12 233 (see para 483).
494 A “more significant anomaly” identified by the working party (Final Report, 1983, 21) was the small size of the deductible allowance from income for additional children or dependent relatives. In 1983, that allowance was $312, and was equivalent to the annual amount of the Family Benefit. The working party recommended that the allowance be raised to $1300 – the amount then sought to be recouped annually under the liable parent contribution scheme. That recommendation was not adopted either. The 1987 review set the deductible allowance for any further child or dependent relative at $832. That is the amount which applies today (see para 483).
The capital test
495 Since 1974, the capital test has been largely one of kind, making its real value less vulnerable to erosion over time (see para 485). However, three elements of the test remain dollar-based: the $2000 limit above the deductible allowances; the $500 capital allowance for any dependants; and the $41 000 interest in a home which may be disregarded. Of those three elements, only the last (the value of an applicant’s interest in a home) has been upgraded in value since 1969. It is the same amount as is protected by the Joint Family Homes Act 1964, and was last upgraded in 1996. (Joint Family Homes (Specified Sum) Order 1996/175, Reg 2)
496 With regard to the $2000 limit above the deductible allowances from capital, the Working Party on Access to the Law calculated in 1983 that the movement in the Consumer Price Index between December 1969 and December 1982 meant that $2000 was then equivalent to over $9600. It recommended that the $2000 capital limit (and the $2000 income limit) be adjusted upwards using the appropriate index to determine their change in value, and that they be tied to that index in future. (Final Report, 1983, 22) That recommendation was not adopted.
497 Using the same basis for calculation, the working party estimated that, in 1983, the $500 deductible allowance for any dependants of an applicant was equivalent to approximately $2400. Again it recommended that the amount be adjusted upwards according to an appropriate index, and tied to that index in future. That recommendation was not adopted either.
The effect: an illustration
498 When the Legal Services Act came into force on 1 February 1992, people with an annual income approximately a third higher than the base levels of the Domestic Purposes Benefit would have been eligible for civil legal aid. For example, a sole parent with one child who applied for legal aid in February 1992 could deduct (as now) $12 233 of income before the next $2000 was counted as “disposable income”. A domestic purposes beneficiary with one child at that time received a base annual income of $9 694.40. A sole parent with two children could deduct (as now) $13 065 of income before any further income (up to $2000) was counted as “disposable income”. A domestic purposes beneficiary with two children at the time received a base annual income of $10 577.70. (Benefit figures as at 1 February 1992 supplied by Department of Social Welfare)
499 Since 1992 there have been a number of increases to base benefit levels, Family Support, the Accommodation Supplement and to allowable earnings. Information from Work and Income New Zealand shows that, as at 1 February 1999, the base benefit rate for a sole parent with one child is $12 870.70 a year and, for a sole parent with two children, $14 472.25. Without any further income then, a sole parent with one child now has $1600 of “disposable income” in terms of the legal aid eligibility criteria. A sole parent with two children has $2400 “disposable income”, which means that a district subcommittee would need to determine that “special circumstances” existed before that person could be granted legal aid.
500 The Legal Services Board research into 2316 civil legal aid files opened in 1994 and 1995 shows that the average personal annual income of recipients was $13 453. (AC Nielsen MRL, 41) Since the income test for legal aid has not changed meantime, there is no reason to believe today’s recipients would have higher average incomes. The result is that eligibility for civil legal aid is significantly out of step with other forms of government assistance. The financial test for an Accommodation Supplement makes supplements available to both beneficiaries and low income earners. Eligibility for Community Services Card (CSC) assistance has been kept in line with benefit levels and is currently much higher than base benefit levels. In the 1995/96 year, as part of its tax and benefit changes, the government raised the qualifying income levels of the CSC; and, as at 1 May 1998, 1.12 million New Zealanders held CSCs (over 40 percent of New Zealand adults). Table 4 shows the income levels which establish eligibility for the CSC for families with up to six members. For families with more than six members, the eligibility threshold is now determined (since 1 February 1999) by adding to the six person family income level an amount of $4840 for each extra person.
TABLE 4: Community Services Card Eligibility Levels
Size of family Income level cut offs
single person (living with others) $17 769
single person (living alone) $18 846
two-person family $28 000
three-person family $32 846
four-person family $37 692
five-person family $42 538
six-person family $47 385
Source: Department of Work and Income, February 1999
The gap between eligibility for aid and the ability to afford private lawyers’ services
501 There is little doubt that the 1991 civil legal aid scheme was intended to be less generous than the original 1969 scheme. It may be that the provisions of Part V of the Legal Services Act (enabling certain community-based legal services to be developed and funded) were intended to help meet the deficit. It may have been thought that other changes in the justice system, such as the increased use of alternative (private or public) dispute resolution services, would reduce the dependence on legal representation, and hence legal aid, for some types of proceedings. And it may have been thought that the costs of civil justice in the courts would decrease through structural or procedural reforms (for example, in relation to case management). However, slow progress in all of those areas throws the spotlight on the continuing need for a civil legal aid scheme of sufficient generosity and flexibility to enable ordinary New Zealanders to obtain legal representation.
502 Because eligibility for civil legal aid is steadily shrinking in real terms, the New Zealanders who qualify for aid each year are poorer than those who qualified in any previous year. The adverse consequences of this were the subject of very frequent complaint by those with whom we consulted. It was acknowledged that women’s over-representation among low income earners renders them more likely than men to be eligible for legal aid. Indeed, 70 percent of civil legal aid recipients are women (see chapter 5, para 394). But it was also pointed out that, because eligibility cuts out at such a low income level, women are over-represented among those who are close to qualifying for aid, but do not qualify, and whose income is such that they cannot afford to pay for more than minimal legal advice and representation services. People in that situation, which was described as a “black hole”, are effectively compelled to reach their own solutions to their legal problems, or to reach solutions with minimal legal assistance.
503 There was a high level of agreement among the various groups consulted that this situation tends to penalise women, especially in bitter family disputes. One reason is that in order to reach the least costly solution, particularly when their ex-partners have the income to support protracted litigation, women are tempted to “trade off” their rights to a fair property arrangement so that they may secure custody of children. Another reason is that women often do not have control of family property, and are in a weaker position to identify it and exert their rights to it in the face of recalcitrant ex-partners.
“Women are particularly disadvantaged. They typically have low incomes/few assets and have to fund childcare. Many of the issues that women face are very central to their being, eg, custody/child support/occupancy of the home. Owing to their means, they are often reliant on the civil legal aid system which is not always matched as to eligibility levels with the benefit system, eg, a woman with sufficient children on the benefit can be too rich for legal aid.” – Submission 323 (lawyer)
“It’s a common problem to have clients ineligible [for legal aid] – a kind of ‘black hole’ particularly with difficult cases which may be expensive and they earn too much to qualify but not enough to pay costs.” – Submission 68 (lawyer)
“In the end, the woman offered the husband the house (ie, she would not claim half) in return for her having custody of the child. This was offered in court – the judge was aware – and the husband agreed. This meant he had the house, and the mother and child were homeless. The husband also said he would no longer require access to the child: he didn’t really want custody or access at all.” – Submission 162 (lawyer)
504 The civil legal aid scheme requires aid recipients, where possible, to make some form of financial contribution to their legal costs. In principle, there can be no objection to the notion that those who can afford to should make a contribution. The evidence collected in this study indicates, however, that potential applicants are deterred from seeking legal aid because they cannot afford the costs which will or can be imposed upon them. In particular, some cannot afford the initial $50 contribution that is generally required. Others are fearful of being unable to repay any charge which might be imposed on their property.
The $50 contribution
505 The Legal Services Board’s research shows that, before the Domestic Violence Act 1995 took effect, 82 percent of civil legal aid recipients were required to pay the $50 initial contribution. It also shows that the average personal weekly income of civil legal aid recipients was $258 ($13 453 per annum). (AC Nielsen MRL, 10, 41) The initial contribution is nearly 20 percent of that weekly income.
506 The 1996 New Zealand study Women on Low Incomes (Duncan, Kerekere and Malaulau, 8) found that low incomes cause women to restrict their spending on daily necessities such as food. Rent, power, the telephone bill and sometimes healthcare were paid for first, and food was bought with what was left over. This provides some context for the consistent complaint made throughout this study’s consultation programme: that the $50 contribution is more than many low-income earners can afford, and that it can prevent women from proceeding with their legal matters even when they clearly qualify for legal aid.
“A lot of our Mäori women do know what legal aid is but they still can’t afford it. The $50 fee is too much for them to pay.” – Transcript of hui with Mäori women, Rohe 9
“The contribution poses a significant barrier to women on low incomes.” – Submission 23 NZLC MP8
“Many lawyers pay the $50 for their clients as yet another impost because the clients are too poor to pay it and at least it gives the lawyer the work. The administration is such that it must be asked whether the contribution is worth the candle.” – Submission 323 (lawyer)
“Clients regularly cannot afford the contribution and lawyers end up paying it for them. Sometimes this is recovered, sometimes it is not.” – Submission 11 on NZLC MP8 (lawyer)
“In many cases we write off the $50 initial contribution if the case genuinely warrants it.” – Submission 361 (lawyer)
“Our own firm has lost count of the times we ourselves have paid the $50 on behalf of clients to ensure they did get legal aid.” – Report on Consultation with Pacific Islands Women, 30
“. . . it is clear that the $50 contribution is a substantial burden on many applicants.” – Submission 24 on NZLC MP8
507 Further evidence of the deterrent effect of the $50 initial contribution is supplied by the 1995 report on the criminal legal aid scheme, In the Interests of Justice. It found that proportionately fewer applications were made for criminal legal aid in the areas of New Zealand where a contribution of $50 was routinely imposed on applicants. (Legal Services Board 1995, 78)
Charges
508 Data from the Legal Services Board’s computerised records system shows that 2020 charges were registered in favour of the board in the 1997/98 year in respect of civil legal aid grants. Their average value was $2729. The average value of a grant of civil legal aid in the 1997/98 year was $1935 (see chapter 5, table 2, para 390). The following table sets out the 1997/98 data on charges.
TABLE 5: Total Charges Registered in Favour of Legal Services Board
1/7/97 – 30/6/98
Value Number Average amount
$0 – $1000 369 $756
$1001 – $2000 729 $1470
$2001 – $5000 694 $3013
$5001 – $10 000 175 $6859
$10 001 – $20 000 41 $13 064
$20 001 – $30 000 10 $26 327
$30 001 – $40 000 2 $36 969
Total 2020 $2 729
Source: Legal Services Board, February 1999
509 From the fact that 26 113 applications for civil legal aid were granted in 1997/98 (see chapter 5, Table 2, para 390) and 2020 charges imposed, it can be estimated that fewer than 8 percent of aid recipients in that year had charges imposed on their property to secure repayment of some portion of the grant of aid. The board’s research on the sample of 1994/95 files showed that 16 percent of those aid recipients had charges imposed. (AG Nielsen MRL, 68)
510 The total value of the 2020 charges imposed in 1997/98 was $5.51 million. That represents 11 percent of the total expenditure on civil legal aid that year. The repayment of 1023 charges in 1997/98 brought in $2.38 million to the board. All were worth less than $40 000, and they had an average value of $2322. (Figures supplied by Legal Services Board)
511 To a large extent, women use legal aid to resolve the issues that arise out of breakdowns in their family relationships. Typically, those situations involve the division of one household’s assets and income-earning potential into two. Women generally provide primary or sole care for any dependent children after their relationships have broken down, and manage those responsibilities on low incomes. At the time of the 1996 Census:
• 83 percent of sole parents were women;
• 65 percent of sole parents had been married;
• the median income of one-parent families in New Zealand was $16 900; and
• 40 percent of mother-only families had a total household income of less than $15 000.
512 The evidence collected in this study indicates that women view the possible imposition of a charge on legal aid recipients’ property as a significant deterrent to pursuing their legal matters on legal aid. The likelihood of a charge being imposed, and the amount of it, are determined by a district subcommittee only at the conclusion of the aided proceedings. Accordingly, a lawyer acting for an aided client is unable to predict the subcommittee’s decision with any certainty. Very often, women who were or had been in receipt of legal aid said that fear of incurring a debt of unknown proportions compounded the financial and emotional strain of their circumstances during legal proceedings.
513 Women who had charges imposed on their homes also said that the demands on their incomes were such that they could not repay them in the foreseeable future, except by selling their homes. Typically, however, the women were concerned that if they repaid the charge out of their share of the proceeds from the sale of their home, they would then be unable to purchase another home that was suitable for their family’s needs. The values of the homes in question were sometimes very low indeed. It was evident that some women felt “trapped” in their homes because of the existence of the charge in favour of the Legal Services Board. None of those women were aware that an application could be made to the relevant district subcommittee to have the charge transferred to another property upon the sale of the property that was originally charged with the debt. (Legal Services Act 1991, s 49) The board has advised that such applications are rarely made and that repayment of part of the charge would generally be sought as a condition of allowing its transfer to another property.
“People are sitting in their house that they are barely managing to hold together and pay the rates on and things, and they think ‘I can’t leave it because if I leave . . . and I sell my house and I get $30 000 for it someone is going to tap me on the shoulder and say, Look here is the $8000 legal bill to pay’. And so it’s very restrictive. You are a prisoner in that house because if you move you will lose. Your equity in the house will go to your legal aid bill, and you may not ever save enough to re-establish yourself in a house. So I don’t think that’s a very good situation to put people in because by and large women are on lower incomes, often because of looking after children, and they haven’t got a high income to take out these mortgages.” – Submission 65
“A woman who had left a violent relationship bought a very cheap house in [name of rural town]. She had her children with her. Her husband had told her that if she took the kids he would ‘grind her into the dust’. The man keeps making custody applications and the woman is on legal aid. It is getting to the stage where the legal aid charge is greater than the equity in the property. The woman is getting really worried about this because she thought the house was an asset that she could use to keep a roof over her children’s heads. The house, like most in town, is worth about $20 000.” – Meeting with Southland community workers, June 1996
514 The Legal Services Board’s research on the sample of 2316 files opened in 1994 and 1995 shows that legal aid recipients in matrimonial property and employment proceedings are the most likely to have charges imposed on their property. Indeed, 59 percent of recipients involved in matrimonial property proceedings, and 56 percent of recipients involved in employment proceedings, had charges imposed. Just over a third (35 percent) of those bringing “other civil” proceedings (such as ACC, social security, administrative and insurance related proceedings) had charges imposed. (AC Nielsen MRL, 68, 72) By contrast, aid recipients involved in mental health proceedings are least likely to have charges imposed. From the sample file study, only 1 percent of these recipients had charges imposed on their property.
515 Women involved in matrimonial property disputes are the most likely group of aid recipients to have charges imposed, because women make up the great majority of aid users (70 percent) and matrimonial property litigation is the most likely to result in property being available to charge. As has been seen, the great majority of women aid recipients have dependent children and are “unemployed” (see chapter 5, para 394). It has also been seen that women have lower income levels than men and are more adversely affected financially by marriage breakdown (see chapter 4, para 223).
516 There is nothing in the Legal Services Act to suggest that those facts have been considered in the policy which underlies the charging regime. As a result, the “gender-neutral” policy governing the imposition of charges on the property which women recover or preserve as a result of legally aided litigation is likely to entrench the disadvantage which exists because of women’s reduced ability to recover from the economic effects of marriage breakdown.
“Some women have nothing other than a low equity home and children. They can’t see they will ever be able to get ahead. He’s on the dole without kids moaning about $10 per week and she ends up paying with a charge. Something stinks somewhere.” – Submission 337 (lawyer)
“[The] imposition of charges on matrimonial files by way of charge over home which can effectively erode woman’s equity [is] unfair – she frequently has no ability to clear debt from income as a man can . . . .” – Submission 318 (lawyer)
“Often it is the woman with children who is in the house, who structures a property settlement with her retaining the house and who then finds that the house is charged simply because it is the easiest asset to identify. She will then be in a position where she has a long term low equity mortgage, very little ability to service repayments as a consequence and her poverty will become more entrenched.” – Submission 323 (lawyer)
517 It is notable that, by amendments to the Legal Services Act made by the Domestic Violence Act 1995, those who take proceedings under that Act and who are eligible for legal aid are exempted from paying the initial contribution of $50 and from the recovery scheme. The aim of the exemption provisions was to remove any deterrent posed by the civil legal aid scheme to those seeking protection from violence. Since the amendments took effect, the Legal Services Board’s records suggest there has been a substantial increase in applications for civil legal aid to fund domestic violence proceedings. The records only capture the fact that an aid recipient is involved in proceedings for a protection order, not whether the person is an applicant or a defendant. However, the increased number of recipients involved in those proceedings (approximately 10 000 each year at present) and the amount of the increased costs to the scheme since the Act took effect indicate that the number of legally aided applications for protection orders has risen as a result. The board advises that in the 1998 calendar year, the cost of legal aid for domestic violence proceedings was $9.28 million. Publicity about the new Act’s wider definition of domestic violence may have encouraged some applications that were previously not able to be made but it seems highly likely that the well publicised removal of the financial disincentives for low-income applicants has contributed significantly to the increase. (New Zealand Institute of Economic Research 1997, 4)
Conclusion
Erosion of eligibility for aid
518 The combined effects of the erosion of eligibility for civil legal aid over many years combined with the absence of alternatives to the resolution of many disputes without legal representation reduce, to an unprincipled and inequitable extent, the ability of ordinary New Zealanders to obtain access to justice. The income levels of the majority of New Zealanders are so low in relation to the cost of legal services that a genuine attempt to bridge the gap would allow not only those in receipt of government income support but also those whose earnings exceed income support levels to receive the benefits of the scheme.
519 Determining the cost of raising the financial eligibility threshold for civil legal aid poses considerable difficulties. The New Zealand Institute of Economic Research advises that, because there are no reliable statistics on the three matters relevant to the income and capital tests – savings, property ownership and income – it is not possible to estimate either the proportion of the population that is now eligible for civil legal aid or, therefore, the costs of increasing eligibility. If eligibility were extended, there would of course be a greater likelihood of cost recovery to offset the extra expenditure.
Recovery mechanisms
520 The deterrent effect on legal aid applicants both of the initial contribution and the possibility, and reality, of charges has already been described. In their responses to the consultation paper Women’s Access to Civil Legal Aid, lawyers commonly defended the status quo on the basis that these aspects of the scheme act as a justifiable deterrent to vexatious litigation, and make the civil legal aid litigant, like any private paying litigant, weigh the costs and benefits of their litigation before they proceed. The rationale is that if civil legal aid were simply a grant, recipients would be much less likely to take cost factors into account when making their decision and would have an incentive to continue litigating indefinitely to obtain the best result.
521 That reasoning is open to challenge on a number of grounds, however. First, the evidence collected in this study indicates that women take very seriously indeed any decision to involve the justice system in their lives. The Women’s Consultative Group of the New Zealand Law Society also commented in its submission on Women’s Access to Civil Legal Aid:
“If the purpose [of the $50] is to establish the seriousness of a prospective applicant’s intent, then this is misguided. Members of the public do not consult a lawyer unless they are serious.”
522 Second, there are a number of checks and balances within the process for granting aid to prevent abuse of the scheme: for example, the merits test and the processes for monitoring grants of aid by the district subcommittees. These mechanisms are more appropriate than the imposition of a $50 contribution for preventing undue use of the civil legal aid scheme. The question of quality assurance is returned to shortly.
523 Third, the evidence collected in this study indicates that many clients have little knowledge of, or control over, their lawyers’ actions. A particularly strong message from the consultation with Pacific Islands women, for example, was that they had played little part in decisions about their cases, and were on occasions persuaded by their lawyers to go along with courses of action which they disliked or did not understand.
“Women spoke of lawyers having been controlling of them as opposed to there being a partnership relationship.” – Submission 275
“For sure I had no control over my case. Because I didn’t know the legal processes and the legalities in it. I didn’t even think to ask my lawyer because I thought he had told me everything I needed to know but he hadn’t. It was only when I started getting ugly about not knowing what was going on that my lawyer kept me up with the play.” – Report on Consultation with Pacific Islands Women, 18
524 In any event, the existence of guideline fees removes legal aid recipients from financial control of matters. They are not in the same position as private litigants, who can refuse to pay their lawyers if dissatisfied with the service they receive.
525 Fourth, the decision whether to impose a contribution or a charge, and its amount, rests with a district legal services subcommittee, not the recipient’s lawyer. As a result, civil legal aid clients often cannot obtain from their lawyers reliable estimates of the likely total cost of the proceedings they are initiating, and so cannot weigh the benefits and possible costs, of continuing.
526 Finally, the purpose of the civil legal aid scheme is to give financially vulnerable New Zealanders access to legal representation. It is inconsistent with the purpose of the legislation to exclude, by financial deterrents, the very people it was designed to assist.
Options for reform
527 Three options for reforming the recovery mechanisms of the civil legal aid scheme are considered here. None of them is mutually exclusive. The first is to abolish the $50 initial contribution for all applicants.
528 As has been seen, the $50 initial contribution makes up a significant proportion of any aid recipient’s weekly income. Its deterrent effect is obvious. The only other rationale for its existence is as a source of revenue. The Legal Services Board’s annual reports indicate that the revenue received from both initial (the $50) and further (calculated) contributions over the last three years was $931 000 in 1996, $917 000 in 1997 and $1.17m in 1997/98. The board’s earlier research indicates that 17 percent of legal aid recipients were exempted from the requirement to pay the $50 initial contribution; 82 percent of recipients paid only the $50; and only 1 percent were required to pay a further contribution. (AC Nielsen MRL, 64) Since that time, the Domestic Violence Act has come into effect, exempting legally aided applicants for protection orders from paying the $50 contribution.
529 Many lawyers commented in their submissions that their firms sometimes bore the cost of the $50 initial contribution that is required to accompany the application for aid unless a waiver is sought. Some said they recoup that amount by small weekly or fortnightly payments from their clients. (See NZLC, MP8, 16–17.) Others said it was not worth the time involved to do that. The board is aware of the varying practices in this regard and believes that the low rate of exemptions granted by some district legal services subcommittees may be due, at least in part, to lawyers in those areas paying the $50 contribution on behalf of their clients instead of applying for an exemption. To the extent that this is occurring, it calls into question both the source of the board’s returns from the initial contribution and the grounds for its collection in individual cases.
530 Although it is not possible to calculate precisely the current revenue from initial contributions, the New Zealand Institute of Economic Research has advised that if there were 20 000 applications for legal aid granted annually, then, taking account of the impact of the Domestic Violence Act, the amount of revenue foregone by removing the $50 contribution would be in the region of $640 000. (New Zealand Institute of Economic Research 1997, 5–6) That amount does not take into consideration the administrative costs incurred in collecting the initial contribution from aid recipients. These would erode the potential revenue collected.
531 Two further options to reform the recovery mechanisms of the civil legal aid scheme are:
• to exempt further types of litigation from liability for contributions and charges; and
• to limit the imposition of charges to property of a particular value.
532 The scheme already exempts applicants for protection orders under the Domestic Violence Act 1995. Few would dispute that, if protection from violence must normally be paid for, then those who cannot afford it must be the first to be exempted from doing so. It can of course be argued that, in principle, the exemption should not stop at the obtaining of a protection order but should extend to all other matters made necessary as a result of the violence, including arrangements for the custody of children and division of shared property. On that argument, the Act’s response to a serious social problem is very limited for it covers the narrowest range of meritorious situations.
533 When considering exemptions for other types of litigation, however, unprincipled distinctions are not only exceedingly hard to avoid but also more difficult to justify on the grounds of “greatest merit”. For example, it can be difficult to distinguish between the outcomes of matrimonial property litigation brought to preserve security of tenure and other types of litigation such as the enforcement of mortgages. Likewise, litigation over income (for example, welfare eligibility and ACC entitlements) may profoundly affect the ability of individuals to care for themselves and their families, as may litigation to enforce payment under a contract.
534 It needs to be noted too that the financial position of a legal aid recipient is not necessarily dependent on the type of litigation: if recipients own or recover sufficient property, then it seems fair that they should have to reimburse the scheme, irrespective of the proceedings brought. The difficult issue is, what amounts to “sufficient property”?
535 A consideration of that question leads to the last option, of excluding a certain value of property from the charging scheme. This would enable those who can afford to repay to do so, and provide those who cannot afford to pay with some “baseline” of future financial security.
536 The Legal Services Board’s research on the 1994 and 1995 files provides some information relevant to the value of the property that might be protected in this way. It shows that only a minority of aid recipients (24 percent) own homes, and that they are the people most likely to have charges imposed on their property: 55 percent of recipients with homes had charges imposed, compared to 4 percent of those without homes. (AC Nielsen MRL, 68) The research shows further, that:
• the majority of aid recipients (56 percent) have total assets (minus total liabilities) valued at no more than $40 000;
• 70 percent of aid recipients have total assets valued at no more than $60 000;
• the majority (60 percent) of charges are imposed on property valued at more than $40 000. (AC Nielsen MRL, 45, 71)
537 In fact, it may be that more than 60 percent of charges are imposed on property valued at more than $40 000. This is because in 20 percent of the cases in which charges were imposed, the legal aid files did not state the value of the property that was charged. It is relevant too that in the remaining 20 percent of cases, where charges were imposed on property valued at less than $40 000, over half of the charges were imposed on property valued at less than $10 000. (AC Nielsen MRL, 71) It is questionable whether charges on property with such a low value provide good security for the debt that is owed to the Legal Services Board.
538 In light of those facts, it may be that the value of the property which can fairly be exempted from the charging provisions of the legal aid scheme is near the value of the protected interest in a joint family home (presently $41 000), which the Legal Services Act allows the subcommittees to disregard in their assessments of applicants’ capital. Any single fixed amount, however, would not allow for regional differences in property values. It has already been noted that the Accommodation Supplement, available to beneficiaries and low-income earners, is adjusted to take into account the reasonable housing needs of people in different regions. This would seem to be a particularly relevant consideration to be factored into the legal aid charging regime.
539 Further, any fixed amount would not allow for the fact that different recipients of aid will have different demands upon their income and asset base. At present, this fact is sought to be recognised by district legal services subcommittees when exercising their discretions to determine the amount, if any, of each recipient’s liability and the manner of payment of a recipient’s debt to the board. A more principled method of determining liability could be introduced which takes into account recipients’ actual (and reasonable) living costs as well as the value (above the exempted value) of their asset base. Sliding scales for the recovery of legal aid costs are a feature of some overseas schemes (for example, the Queensland and soon to be disbanded English schemes) which could well inject equity, in a transparent manner, into New Zealand’s scheme. Finally with regard to the manner of payment of recipients’ debts, the Legal Services Board has criticised the present arrangements for charging agreements and recommended statutory amendments to increase their effectiveness. (Review of the Legal Services Act 1991, Legal Services Board, 1995, 8–9) The board estimates that, aside from the recoveries made from initial and further contributions, statutory land charges account for more than 99 percent of other recoveries made by the board.
540 The next defect in the civil legal aid scheme which has been highlighted by this study is the low level of awareness among women of the existence and the terms of civil legal aid. This is no new phenomenon. In the Department of Justice’s review of the civil legal aid scheme in 1981, it was found that:
the most significant trend emerging from the interviews conducted with civil
legal aid clients was the widespread public unawareness of the scheme. Deeper than this, was an ignorance of available legal resources generally. (Access to the Law, Appendix 2, 449)
541 In 1993, the Report from the Women’s Suffrage Centennial Forum on legal aid again found little information available. (Are Women Getting the Help They Need From the Legal Aid Scheme? 14, 18) At the consultation meetings held during this study, women freely acknowledged that their level of knowledge of the scheme is not high. Among some groups, including Mäori women, the need for information was particularly evident.
“Legal aid is only given when you have been really strictly means-tested. Many of our Mäori women do not know what legal aid is or what the criteria is for getting legal aid. There is a real need to have that information given to them. It seems that no one, not even their lawyers, are informing them about legal aid.” – Transcript of hui with Mäori women, Rohe 8.
“What does legal aid do? Can you apply for it for any court proceedings?” – Transcript of hui with Mäori women, Rohe 4
“That legal aid thing, isn’t that when you don’t have to pay for anything your lawyer does?” – Transcript of hui with Mäori women, Rohe 4
“Other women I know didn’t even know what legal aid would do for them.” – Transcript of hui with Mäori women, Rohe 3
542 From what the women said, it appears that misinformation about the scheme’s operation is at least as widespread as ignorance of its existence. These are major barriers to citizens’ access to legal services, particularly when the cost of legal services was the reason most often given by women for not utilising the
justice system to protect and enforce their rights. It defeats the very purpose of a scheme designed to assist the financially vulnerable when those who are
entitled to use it are unaware of its existence and ill informed of its conditions of operation.
543 The consultation paper Women’s Access to Legal Information (NZLC MP4) listed and assessed the many tangible information resources available to the public in respect of legal aid. It identified significant problems with the targeting and distribution of those resources. Since the consultation paper was published, the Legal Services Board has produced a revised issue of its pamphlet on legal aid and related services: Legal aid guide. The pamphlet will soon be available in several languages. This initiative is timely and encouraging. However, as a written document of some length, it will not meet the information needs of diverse New Zealanders. The targeting of legal information is discussed in more detail in chapter 9.
544 For a number of reasons, people who meet the civil legal aid eligibility tests cannot be certain of securing representation. First, as was outlined in chapter 5, lawyers tend to congregate in the cities; some parts of the country have very few lawyers; only a minority of private lawyers do legal aid work; and lawyers employed by community law centres are rarely authorised to represent clients in court.
545 Second, while lawyers have an ethical obligation to advise clients of their eligibility for aid, they are not obliged to act for those clients on civil legal aid. And, even if a lawyer willing to act can be found, his or her technical competence to handle the particular matter cannot always be guaranteed. This is less likely in the traditional, and growth, areas of legal practice, such as family and mental health proceedings – although numerous criticisms were made (including by senior lawyers and judges) of junior lawyers’ professional and personal qualifications to deal with family proceedings. But in less developed areas of law – for example, consumer and welfare law – expertise is less common and lawyers willing to act for low-income clients are more difficult to locate.
546 It is not known whether that fact contributes to the low use of legal aid for civil proceedings outside the family and mental health areas: less than 10 percent of civil legal aid expenditure is incurred in respect of all other types of proceedings. The Legal Services Board’s current research on unmet legal needs may shed light on the matter. However, it has long been a criticism of judicare legal aid schemes that, by being “but a small extension” of private legal practice (Access to the Law, 1981, 157), they do not promote the development of areas of law of particular concern to low-income people yet outside traditional areas of lawyers’ expertise. (See, for example, Zemans 1996) One result of this, as was noted in chapter 6, is that community law centres are uniquely placed to develop expertise in these areas.
547 The overall result is that the judicare model of legal aid, which is so tightly tied to the private market for lawyers’ services, is subject to significant restrictions on its ability to provide New Zealanders who are eligible for aid with the legal representation they need. Amendments to the Legal Services Act 1991 would be required to empower the Legal Services Board to introduce (even by way of pilots) alternative methods of legal aid delivery in areas of law, or areas of New Zealand, in which it considers there is a need for improved coverage.
548 As the summary at the start of this chapter shows, the method of calculating eligibility for civil legal aid is relatively complex. This not only makes regular reviews of the criteria more administratively difficult but also complicates the application process. Across the range of those who were consulted, it was frequently said that the complexity of that process (which involves providing confirmation of any benefits, wages and savings and of the value of any home that is owned) places substantial hurdles in the path of prospective applicants for legal aid.
“The forms you fill in are terrible. You have to run around proving this and that. They’re not practical. The women have to run around usually with their four children to Income Support, or the bank to prove they are eligible and it’s a real problem for them.” – Transcript of hui with Mäori women, Rohe 10
“Women come in once, they struggle through filling in a legal aid application. They have to get a letter from their boss, Income Support and pay the initial contribution.” – Transcript of hui with Mäori women, Rohe 7
“The cost of the paper work is high and gets passed on to the client.” – Submission 323 (lawyer)
549 There have been regular calls for the simplification of both the application process and the form. Such calls were made, for example, in the 1993 report from the Women’s Suffrage Centennial Forum held in Wellington, and in the report, A Review of the Family Court, written the same year by a committee established by the Principal Family Court Judge. That committee commented, having consulted a range of people and organisations during its four month study:
Almost universally, the size and complexity of the legal aid application form was cited as a major irritant. Lawyers have indicated that they have to oversee the completion of the form, that it often occupies two or three different points in time, and is unnecessarily full. We conclude that its complexity is often a deterrent to its completion and thus a possible grant is avoided – but this is not an appropriate method of eliminating an application for legal aid. (Boshier et al 1993, 150)
550 Lawyers around the country who made submissions to this study said that prospective clients are deterred from seeking civil legal aid because of the time it takes to gather the necessary information and complete the application form. Their estimates of the time needed to complete the application form varied, from 10 minutes if the client has all the information to two hours if more than one meeting with the client is required. Some lawyers commented that it usually took clients two appointments to get the form completed. Applicants who need that assistance will incur a variety of costs, on matters such as transport and childcare, in order to gather all the necessary information and attend the appointments with their lawyers. Granted that there may be uncertainty about an applicant’s eligibility for aid, and that, for some potential applicants, the prospect of the application process and paying the initial $50 contribution will be particularly daunting, it is readily understandable why the opportunity to obtain legal aid is not always pursued.
551 The New Zealand Law Society Poll of Lawyers confirms the view that the complexity of the legal aid application process deters applications. Of the 30 percent of lawyers who said that they had not actively discussed or pursued legal aid as much as they should have, almost half (45 percent) gave as a reason the length of the forms. (Poll of Lawyers, 36) Similarly, the Legal Services Board’s 1995 review of the Legal Services Act records that 67 percent of participants stated that simplified forms were desirable. (Review of the Legal Services Act 1991, 7)
552 The Legal Services Board has accepted the need to simplify the form but emphasises that the complexity of the application process is due largely to the requirements of the Act and the regulations made under it. In January 1999, it approved a new application form for civil legal aid, for use from June 1999. The new form is shorter than the previous seven page form, being four pages, with a one page supplement for use by those applicants whose financial eligibility is determined in the light of their own income and assets and those of another person. It will still be necessary, however, for an applicant to provide the same verification as has always been required of their own (and, if relevant, another person’s) income, savings and home value. Accordingly, the practical difficulties of gathering the required information are not reduced by the new form. It will, however, enable the data provided to be entered more rapidly in the board’s database. In addition, the new form asks applicants to identify their sex and ethnicity, in the latter case by ticking one of 13 options (including “not stated”). That information has not been collected before and even sample studies of files could not identify applicants’ ethnicity.
553 Part of the problem of the complexity of assessing eligibility could be resolved if eligibility were tied to another form of means-tested government assistance, such as the Community Services Card. A simplified application form could follow, at least for those who are eligible for the other assistance. The New Zealand Law Society has already suggested that a simplified form would be possible for applicants who receive means-tested assistance below a certain level. (Review of the Legal Services Act 1991, 7)
554 Women criticised their lawyers’ failure to advise them on whether they were eligible for civil legal aid. A related complaint was that, without adequately explaining the benefits of receiving legal aid, some lawyers had offered to work for women clients at legal aid rates (paid directly by the women) rather than applying for civil legal aid on their behalf.
“My three children are in Christchurch and I have no access to them whatsoever. I haven’t seen them for a year now. I have had two lawyers helping me. The first didn’t help me by telling me about legal aid or my rights. My second lawyer is much better and got me legal aid, and now I am trying to get my children.” – Transcript of hui with Mäori women, Rohe 7
“J is on the DBP and is not receiving legal aid. Her lawyer said not to apply for civil legal aid because she stood to get such a large settlement when it was eventually settled and she would just have to pay it back out of that anyway. Although she is on the DPB she is paying $20 per fortnight in costs to her lawyer. To the end of March [1996] she owed her lawyer $9300 and she knows her bill will be higher now. The lawyer is charging her accumulated interest on her bill and she can’t pay until settlement.” – Submission 387 (telephoned)
“Initially V was on legal aid. V has a charge for $2000 on her home. Her second lawyer said ‘You would be better off not on legal aid as a charge would be made against your house. It would be better if you paid off “so much” on a regular basis’. V has just received a bill for $900. A friend told her that legal aid rates were lower and she feels as if she has been ripped off. The bill was not itemised and V was unable [to say what her] lawyer’s hourly rate was or whether there were any disbursements.” – Submission 330 (telephoned)
“While the commentary [to the Rule of Professional Conduct] states that it is the duty of the practitioner to draw legal aid eligibility to the client’s attention, in my experience this is not always done . . . Insufficient information is available about legal aid, and clients are in the hands of their lawyers who sometimes consider legal aid too much of a fag to go through.” – Submission 323 (lawyer)
“Lawyers tend to assist applicants with decisions whether to apply for legal aid and whether they are eligible. Lawyers are often not sufficiently informed as to the requirements. There seem to be no real guidelines as to special circumstances allowing legal aid to be granted to persons not meeting the financial eligibility test.” – Submission 323 (lawyer)
555 The 1997 Poll of Law Firms revealed that, among the 50 percent of firms with a civil legal aid policy, 29 percent sometimes look for alternative options (such as offering a lower hourly rate) instead of encouraging clients to apply for aid. (Poll of Law Firms, 30). The results of the Poll of Lawyers suggest that some lawyers do not routinely provide people who may be eligible for civil legal aid with information about the scheme. Over half of the lawyers surveyed (56 percent) said that they do not always assess whether a client is eligible for civil legal aid – this includes 33 percent who never or rarely assess. Only 27 percent of the lawyers polled said that they always assess whether a client is eligible for civil legal aid. (Poll of Lawyers, 156) The reasons given for not pursuing civil legal aid with clients include:
• the low remuneration rate for civil legal aid work;
• the length of the forms that need to be completed in applying for civil legal aid;
• that payment for work done for an aided person is too slow; and
• “too much red tape”. (Poll of Lawyers, 159)
556 More recently, the Wellington District Law Society noted that its Complaints Committee had received an increased number of complaints from clients alleging that their lawyers had not fully advised them of their rights to apply for legal aid. (Council Brief, May 1997 Issue 249, 1)
557 Since the publication of Women’s Access to Civil Legal Aid, the Ethics Committee of the New Zealand Law Society has placed the following statement in LawTalk to clarify the situation for practitioners:
Question: I have a client who may be eligible for civil legal aid. May I offer to act at the legal aid rate instead of making application for legal aid?
Answer: No, probably not. If you are prepared to work at legal aid rates, if the job is within your competence and if you have time to do the work, then you are bound to accept the client’s instructions. You must always act solely in the best interests of your client – see Rule 1.01 commentaries (1) and (2). It is almost invariably in the client’s interest to apply for legal aid, since billing will be scrutinised by the District Legal Services Subcommittee; it is possible that no charge or a partial charge only will be imposed; any charge may not be payable immediately; and the protections [relating to costs] accorded under s 86 of the Legal Services Act 1991 will apply. (LawTalk 483, 18 August 1997, 8)
558 The Ethics Committee is now in the process of drafting new Rules of Professional Conduct to expressly state lawyers’ obligations to clients who may be eligible for legal aid. It is likely that the new rules will require a practitioner who proposes to act for a client who may be eligible for aid to investigate that person’s eligibility and, if legal aid may be available, to explain the advantages and disadvantages of obtaining a grant of legal aid. Further, the new rules will state expressly that a practitioner may decline to act for a client on legal aid where she or he believes that the legal aid rate is not fair remuneration but must advise the client that there are other competent practitioners likely to be willing and able to do the work on legal aid.
559 The proposed clarification of lawyers’ obligations to aided clients is a positive step and, if changes to the Rules are accompanied by information about the eligibility criteria and how to investigate financial eligibility, will be of benefit to prospective clients. The need for that information to be made available is apparent from the material gathered in this study which shows that there is uncertainty among some lawyers about the operation of the legal aid scheme, including about eligibility for aid. For example, many lawyers who spoke or made written submissions to us said that they are often unaware of their clients’ incomes. Some were under the impression that their obligation to advise their clients about civil legal aid depended upon whether the clients were in the paid workforce.
560 There have been limited educational opportunities for lawyers to familiarise themselves with the legal aid scheme. While some districts provide occasional seminars on civil legal aid (including a recent Auckland District Law Society seminar), the most recent New Zealand Law Society seminar was held in March 1992. In 1995 the Legal Services Board provided information to all practitioners about the changes to civil legal aid brought about by the Domestic Violence Act 1995. The most recent changes to criminal and civil legal aid, including the changes to remuneration rates and some guideline fees, have also been well publicised by the board to the legal profession. It is notable that all the recent initiatives focus on some of the “technical” information needs of lawyers rather than on the “bigger picture” which would allow lawyers to see their own legal aid work in its larger context and to understand better clients’ perspectives of the scheme’s limitations.
561 The consultation paper Women’s Access to Civil Legal Aid suggested that it would be useful for lawyers to have more opportunities to learn about the operation of the civil legal aid scheme. The majority of the submissions received in response were supportive of this suggestion. It is understood that, as a result of the findings presented in this study’s consultation papers, the Institute of Professional Legal Studies is incorporating material about legal aid in its 13 week course for law graduates. The New Zealand Law Society is also prepared to include legal aid in its continuing legal education programme. These are desirable moves. The society can also inform lawyers about legal aid issues through its fortnightly publication LawTalk which is sent to all lawyers with current practising certificates. The Legal Services Board’s quarterly publication Sounding Board has a far smaller audience and the board is very appreciative of the society’s efforts to incorporate in LawTalk information from Sounding Board.
562 The philosophy of the New Zealand civil legal aid scheme has consistently been that legal aid should be available only for legal representation in proceedings, not for legal advice which is not connected to legal proceedings. In this, the scheme differs from many overseas schemes, including the (soon to be disbanded) United Kingdom scheme on which New Zealand’s was, in all other respects, closely modelled. (See further, NZLC MP8, 24.)
563 The exclusion of legal aid for advice unconnected to proceedings would not be problematic if there was an adequate supply of legal advice services readily available to low-income New Zealanders. As the discussion in chapter 5 has shown, however, there are substantial limitations on the availability of low-cost legal advice services. The result of this combination of circumstances provides one example of the need for co-ordination of the different types of legal services.
564 The fact that many low income New Zealanders do not have good access to alternative means of obtaining free or low-cost legal advice (such as LawHelp services and the clinics run by community law centres and citizens advice bureaux), may leave the civil legal aid scheme open to some abuse. This would be possible because the dividing line between the legal representation services sponsored by legal aid and legal advice is not always clear. For example, one lawyer who attended a consultation meeting was aware of clients being advised to seek unnecessary consent orders from the court so that legal aid could be applied for. Another lawyer wrote:
“Advice can usually be moulded within s 20 of the Act as steps preliminary or incidental to any proceedings or arriving at or giving effect to a compromise to avoid or bring an end to any proceeding.” (Submission 323)
565 As has been described in chapters 5 and 6, the Legal Services Act 1991 facilitates the provision of legal advice by community law centres to those of “insufficient means”, a phrase which is apt to cover the range of barriers which can prevent people from engaging private lawyers. In this regard, the Act departed from the approach favoured by the Working Party on Access to the Law which, in 1983, found “a strong case” for making legal aid available for advice. It recommended that the level of expenditure likely to be involved should be investigated by the proposed Legal Services Board and that, meantime, and as a matter or urgency, the LawHelp scheme should be more extensively publicised and existing community law centres should receive an injection of public funds and an ongoing commitment of funding. (Final Report, 1983, 19)
566 It is not recommended here that New Zealand’s civil legal aid scheme should cover legal advice unconnected with proceedings. Subject to the recommendations made in chapter 6 to increase the diversity of providers, the approach of the 1991 Act in this regard is endorsed.
567 With two exceptions, the capital test which makes up part of the financial formula governing eligibility for civil legal aid is one of kind rather than value. The exceptions are:
• the $500 allowance for dependants (s 29(2)(f) Legal Services Act); and
• the discretion of a district legal services subcommittee to count as disposable capital some proportion of an applicant’s interest in a home, domestic motor vehicle or household and personal effects where the subcommittee considers it would be inequitable not to do that (s 29(3) Legal Services Act).
568 Quite apart from the scope for inconsistency in the exercise of subcommittees’ discretions (see further paras 592–606), the capital test’s primary reliance on the kind of property owned, rather than its value, can create inequities between low income applicants who own property, especially a home, and those with little property but with cash assets in the form of savings. The amount of savings which will disqualify from entitlement to civil legal aid a person who, apart from their savings, would meet the income and capital tests is the amount which satisfies the district subcommittee that “the person can afford to proceed without legal aid”. (s 28(2)) It is not known how district legal services subcommittees interpret this provision, but some lawyers who do legal aid work questioned the resulting situation. It was apparent from their submissions that they believe it can cast people who require legal assistance which they cannot afford into the “black hole” between ineligibility for legal aid and being unable to afford lawyers’ services.
“[T]he $2 000 benchmark for disposable capital is far too low . . . and that has the purpose of freezing out many lower middle class and middle class applicants from state assistance even though in many cases legal aid could be repaid in time.” – Submission 323 (lawyer)
569 In 1983, the Working Party on Access to the Law noted that the distinction drawn between savings and other assets may well be seen as unfair, but concluded that it “is a regrettable but unavoidable result of the assessment system used as it would be extremely difficult to devise any other practicable approach”. (Final Report, 1983, 23) Advice received from the New Zealand Institute of Economic Research supports that prediction. It is notable, however, that the asset test used in determining eligibility for the Accommodation Supplement is one of value rather than kind.
570 There is no information available from which to compare the quantity and quality of legal representation provided to legal aid recipients who own homes and to people who do not own homes and who either do not apply for aid or are not granted it solely because of their savings. The exemption from disposable capital of an interest in a home up to a value of $41 000 recognises that a person’s interest in a home is of greater intrinsic importance than their interest in savings. The rationale for the exemption is that the legal aid scheme should not operate so restrictively as to require low income people to sell what is literally the roof over their heads (or obtain a commercial mortgage of their interest in it – the chances of which may be slim because of their low income) in order to pursue or defend civil proceedings.
571 The net effect is that a home-owning legal aid recipient has the chance to retain their home but subject to a charge to the Legal Services Board – which is likely to have more favourable repayment conditions than a commercial mortgage. For example, charges in favour of the Legal Services Board may not be required to be repaid before the home is sold and, even then, may be able to be transferred from one home to another. (Legal Services Act, s 49) As has been noted earlier, however, this aspect of the legal aid scheme’s operation was unknown to women who made submissions about the effects of having charges on their homes in favour of the board.
572 By contrast, the rationale for denying aid to people who have savings of an amount sufficient to enable them to pay for their own legal assistance is that if they were to be granted aid, they would then be assessed as having to repay it from their savings. This would merely delay the inevitable and cause administrative costs in the process. If it is the case that the person’s savings are sufficient to enable the purchase of legal services, the only possible advantage to them in receiving legal aid in the first instance would be that the legal assistance provided on legal aid, with the cost controls to which it is subject, is likely to be less expensive than the assistance which can be obtained privately.
573 Accepting that there is greater intrinsic importance in an interest in a home than in savings which are sufficient to cover the legal assistance that is needed, there is one situation where people with savings rather than a home may be unduly prejudiced under the present scheme. This is when their “savings” are in fact the proceeds of the recent sale of their home and their need for legal representation arises before they have bought another home. This situation is not expressly covered by the Legal Services Act. With legal aid being relied on so often in family breakdown situations, it may be that some New Zealanders are being advised that they are ineligible for aid, or being determined to be ineligible, only by reason of the fact that their family homes were sold before other issues arising from the breakdown were contested.
574 The matters raised here warrant investigation by the Legal Services Board. Inequities of the types described could only be overcome by statutory change to the financial eligibility test for legal aid. For example, they would disappear if a solely income-based test was introduced (in line with other state assistance such as the Community Services Card scheme). If a capital test remains part of the eligibility assessment, one way by which the inequities could be overcome would be to increase the $2000 disposable capital limit, at least for applicants who have little property other than savings. If, in addition, the legal aid scheme also exempted from liability any property owned by such a recipient up to a specified value (as discussed earlier, see paras 535–539), those people too would obtain the benefit of a “baseline” assurance that their ability to provide a home for their dependants would not be eroded below that amount.
575 Throughout the consultation meetings, New Zealand women questioned the quality of the service provided by civil legal aid lawyers.
“Sometimes you do get a lawyer that is supportive and will work for you. Some lawyers take it on because they don’t have enough to do, but your work gets put aside. The cases which they get paid to do are their priority and the women on legal aid do not get the service they require.” – Transcript of hui with Mäori women, Rohe 7
“Lawyers receiving legal aid fail to provide the same degree of service that other ‘paying’ customers receive. A friend using the same lawyer but no legal aid has had far better representation.” – Submission 61
“The staff solicitor was new and R thought this was possibly given to her because it was a legal aid case.” – Submission 210
“In the area of domestic violence, lawyers tend to show preference in representing the male client over the woman. The clear message given is that the DPB and legal aid is not considered a good money-spinner. Many women have experienced a lack of quality service from lawyers. A practical example is when the client is with the lawyer and the phone rings the lawyer’s attitude is that the call is more important than the client and the client is an interference in the lawyer’s busy and important life.” – Submission 228
576 In 1997, the Legal Services Board released its research on lawyers’ views of legal aid remuneration rates – Legal Aid Remuneration: Practitioners’ Views. As part of the study, lawyers were asked whether there were problems with an uneven quality of work in their area of legal aid practice. The largest group (40 percent) said they were “not sure”, and 38 percent answered “yes”. Only 21 percent answered “no”. (Maxwell, Shepherd and Morris, 32)
577 Currently, there are no standards by which to measure the quality of legal services provided by lawyers and paid for by the taxpayer through civil legal aid. Nor do the Legal Services Board, as the funder of the services, or the district legal services subcommittees, as purchasers, have any means of measuring whether civil legal aid services are:
• focused on meeting client needs;
• technically accurate in terms of the advice provided to clients;
• timely, both in response to client demand and in making the best use of available court time; and
• efficient in terms of the amount of money spent on the work done.
578 In the criminal legal aid scheme, some mechanisms exist for monitoring the services provided. Successful applicants are assigned lawyers from lists of practitioners that are compiled by the district law societies. The societies, and judges of the District and High Courts, have the power to remove poor quality lawyers from the lists. (Legal Services Act, s 18) However, in many districts, the standards applied in compiling the lists, and governing the removal of practitioners from the lists, have not been clearly defined. The New Zealand Law Society has recently issued guidelines on both matters to assist district societies.
579 The matter of quality control for civil legal aid lawyers was raised in the consultation paper, Women’s Access to Civil Legal Aid. In the submissions made in response, users of legal services were far more supportive of the introduction of quality control mechanisms than were lawyers. Some lawyers considered that sufficient controls are provided by the disciplinary mechanisms under the Law Practitioners Act 1982 and the Rules of Professional Conduct for Barristers and Solicitors. They argued further that adequate quality is ensured by the requirements that solicitors work under supervision before practising on their own account and that barristers have an instructing solicitor.
580 None of these mechanisms establishes standards by which a civil legal aid lawyer’s services can be monitored. Nor do they provide for the removal of lawyers when services do not measure up. The civil legal aid client is the loser. By definition, people eligible for aid are from the lowest income group. Many will have a limited choice of lawyers to turn to for assistance. As was seen in chapter 5, most users of civil legal aid (80 percent) are involved in proceedings relating to the breakdown of family relationships. The circumstances which render those proceedings necessary may require urgent relief, and they will usually be a source of considerable anxiety and upheaval for the family members involved. The next largest group of civil legal aid users (12 percent) is made up of people who are subject to the Mental Health (Compulsory Assessment and Treatment) Act 1992. Clients in these circumstances are unlikely to have either the confidence to insist that their lawyers meet particular service standards or the opportunity to shop around to make comparisons between the services offered by different lawyers. Further, having engaged a lawyer, the prospect of terminating the engagement because of unsatisfactory service and finding another lawyer will not be attractive: it will involve extra time and cost to the client, and the selection of a new lawyer may be no better informed.
581 These are compelling reasons for introducing a system of quality assurance in respect of civil legal aid services. Management of the costs of legal aid and the principles of public sector accountability also demand it. The absence of quality control mechanisms increases the risk of abuse of the scheme by lawyers which, to the extent that it may be occurring, puts pressure on the scheme as a whole. It is acknowledged, however, that there are considerable difficulties inherent in grafting on to the present judicare model of legal aid, quality standards which will best meet the dual purposes of client protection and accountability for public expenditure. In particular, it is likely that the introduction of rigorous quality standards into the current civil legal aid scheme, on top of the cost-containment measures that have been taken by the Legal Services Board since 1992, would cause some lawyers, including more experienced lawyers, to abandon legal aid work. That would compound the existing problems arising from clients’ limited choice of legal aid lawyers.
582 It is indisputable that people need good-quality, accountable legal aid services for the lowest possible cost. Monitoring the quality of lawyers’ services is, however, no simple task. Attempts made in the United Kingdom to develop monitoring measures which involve third parties directly assessing lawyers’ and CAB workers’ service quality have caused considerable contention. (See for example, Smith 1997, 27–29) Overseas experience does show, however, that less “hands-on” methods of assuring service quality can be incorporated in legal aid schemes. For example, in jurisdictions which utilise a “mixed model” of legal aid delivery (where lawyers employed directly by the scheme provide some legally aided services), the opportunity exists to compare the costs and results of the services provided by the “in-house” lawyers with those provided by lawyers in private practice. This gives those responsible for the administration of legal aid a more solid basis from which to reach policy decisions about expenditure than is provided by the pure judicare model of legal aid delivery. As well, schemes which provide for the delivery of some services through “bulk contracts”, or fixed price contracts for individual complex cases, allow those who administer legal aid to require those who are awarded the contracts
to conform with quality assurance measures. (See, for example, Legal Aid and the Poor, National Council of Welfare, Canada 1995, 50–62; Zemans, 1996;
Paterson, 1996)
583 It is relevant here that the extensive package of civil justice reforms now being introduced in England and Wales includes a system for assuring quality services to clients of all state-funded lawyers and other providers of state-funded legal services. The range of standards that is to be adopted for different providers has yet to be developed. However, the quality measures for state-funded lawyers in clinical (medical) negligence cases, introduced on 1 February 1999, gives an indication of the kind of standards and conditions to which English and Welsh lawyers working in “specialist areas” will be subject in future. The measures were introduced after a study of legally aided clinical negligence cases revealed that specialist lawyers obtained, on average, more than twice the amount of damages for their clients than non-expert lawyers. Although the specialists’ services cost the Legal Aid Board more on average than those of non-specialists (£3300 compared with £1800), for every £1 of these costs, the specialists won £4.10 in damages for their clients compared with £1.70 won by non-experts. (The Times, 2 February1999)
584 Under the new measures, only solicitors who can prove specialised knowledge and experience in clinical negligence cases sufficient to gain membership of a panel of accredited solicitors, and who have been granted a franchise from the Legal Aid Board, are able to represent legally aided clients in those cases. The effects of restricting the number of lawyers able to act for such clients are expected to be offset by the fact that accredited lawyers will travel to people with potential claims who find it particularly difficult to visit the lawyers’ offices. A plan to publicise the new measures, which includes a freephone service providing information about franchised lawyers, is part of the change package. Explaining the reason for the introduction of these quality assurance measures, the Lord Chancellor has said:
What is important is that when people need specialist legal help in what may be very difficult circumstances that is what they should get – quality-assured, specialist help, not just the nearest solicitors doing their best. And, when necessary, the experts will travel to them. (The Times, 2 February 1999)
585 The incorporation of formal quality standards for legally aided services certainly demands consideration in any more comprehensive review of legal aid than has been undertaken in this study. Statutory change would, of course, be necessary to introduce either of the quality assurance methods outlined above. It is relevant here that the Ministry of Justice has recently embarked on a review, the aim of which is
To assist in establishing a well run legal aid system giving value for money that recognises both efficiency and equity considerations, and to assist in the identification of financial and other risks in the legal aid area.
586 For as long as civil legal aid continues to be delivered through the Legal Services Act’s judicare model, it appears that statutory amendments would also be needed to implement most measures that could be devised to better assure civil legal aid recipients, and taxpayers, of the quality of the services provided. For example, the introduction of a list system for civil legal aid lawyers, comparable to that which the Legal Services Act authorises for criminal legal aid lawyers, would require express statutory authority. That authority would also be needed to support any efforts to require civil legal aid lawyers to undertake specified training before being eligible to perform certain kinds of work for legally aided clients.
587 One measure which the Legal Services Board could introduce under the present Act would involve changing its interpretation of the “experience” that is required of lawyers to qualify for the different rates of payment that the Board specifies. At present, a lawyer’s experience is assessed solely by reference to the number of years litigation experience she or he has had. However, redefining the necessary “experience”, even for only some types of work, would require a reliable new measure of “experience” as the standard. As well, it would carry the risk of reducing legally aided clients’ access to lawyers willing to act for them in the areas of work where a new type of “experience” was necessary to attract the higher rates of pay. That risk would need to be very carefully evaluated.
588 Relevant to the idea of the board adopting a new measure of “experience” is the fact that tentative moves are now being made towards the accreditation of New Zealand lawyers, at least in the area of family law practice. These moves are not free from contention and if the board were to tie any new measure of lawyers’ “experience” to such accreditation schemes as may eventuate, it would first need to be satisfied of those schemes’ integrity. The uncertainty involved is such as to render unworkable in the short-term this possible means of assuring the quality of legally aided services.
589 In chapter 10, it is recommended that a Code of Client Service, applicable to all lawyers and their clients, should be introduced by the New Zealand Law Society. This is a means by which a minimum standard of service quality could be assured for both privately paying and legally aided clients. For privately paying clients, such a code could require lawyers to disclose (orally and in writing) specific information about fees, about the management of clients’ matters and about clients’ rights should they be dissatisfied with the service received. For legally aided clients, the code could require the disclosure of uniform information about the legal aid scheme in place of the fee information. At present, uniform information about the scheme is to be found in the standard form letters prepared by the Legal Services Committee of the New Zealand Law Society in response to this study’s publication of Women’s Access to Civil Legal Aid. Those letters have been publicised to lawyers, with a suggestion from the committee that
clients be sent a letter of engagement together with their application for legal aid. As well as confirming in writing matters such as the solicitor’s hourly rate, the estimate provided to the local subcommittee and interim billing procedures, such a letter would serve to draw the client’s attention to all potential implications of a grant of civil legal aid, particularly charges and/or the repayment of fees. (LawTalk 489, 17 November 1997, 10)
590 Until such time as a Code of Client Service is implemented, the Legal Services Board could issue the standard form letters to all recipients of civil legal aid. However, while those letters may be readily comprehensible to lawyers, and very useful for the purpose of setting out the aspects of the scheme which lawyers should explain to their clients, they do not appear likely to be easily read and understood by clients. The reasons for this assessment of the letters are elaborated in chapter 8, where the limitations of written materials as a means of conveying legal information are discussed.
591 It is understood that, also in response to this study’s findings, the board is now developing its own statement (in pamphlet form) of the information which legal aid recipients need. That statement will be both simpler and more comprehensive than the information contained in the standard form letters. The board intends that, from later in 1999, all recipients of civil legal aid will receive that pamphlet with the letter that advises they have been granted aid. This is a welcome move, especially if (for reasons that are explained in chapter 8) the pamphlet informs recipients that they can and should discuss any questions they have about its contents with their lawyers or other nominated individuals or groups who are known to be prepared to receive inquiries of that nature.
592 District legal services subcommittees have a range of discretionary powers relevant to applicants’ financial eligibility for aid and the application of the recovery mechanisms of the Legal Services Act. The available information indicates that the exercise of these discretions is uneven between districts.
593 The Legal Services Board’s research shows that 82 percent of recipients of civil legal aid in 1994 and 1995 were required to pay the initial $50 contribution, and 17 percent of recipients were granted an exemption. (AC Nielsen MRL, 66) However, as Table 6 shows, the proportion of initial contributions exempted by individual district subcommittees ranged from 0 percent to 57 percent.
TABLE 6: Percentage of Initial Contributions Exempted by
District Subcommittee
Northland 11 percent Wairarapa 1 percent
Auckland 22 percent Wellington 25 percent
Hamilton 19 percent Marlborough 0 percent
Rotorua 3 percent Nelson 8 percent
Bay of Plenty 3 percent Westland 3 percent
Gisborne 3 percent Canterbury 13 percent
Hawkes Bay 5 percent Timaru 2 percent
Taranaki 3 percent Otago 57 percent
Wanganui 21 percent Southland 4 percent
Manawatu 3 percent
(AC Nielsen MRL 81)
594 These figures confirm comments made by those consulted in the course of the project. For example, few critical comments were made in the Otago district, where 57 percent of applicants are exempted from paying the initial contribution. The Otago Women Lawyers’ Association also commented favourably about the exemption procedure in its response to the consultation paper Women’s Access to Civil Legal Aid:
“It is our understanding that the district subcommittee has the power to waive the $50 contribution and that this in fact does happen, however, perhaps there needs to be clearer guidelines for the circumstances where a waiver of the contribution would apply, eg, all beneficiaries should be exempt from the contributions. In our view it is lawyers who are letting their clients down if the $50 contribution is not being waived in circumstances where it would be appropriate for a waiver to occur.”
595 By contrast, in Rotorua, where only 3 percent of applicants are exempted from paying the $50, the following comment was made by a local lawyer:
“There is a part on the form where it says one can be exempted from paying the fee but I have never ever seen this happen.” – Meeting with Lawyers, Rotorua, May 1996
596 The possibility has already been noted that some lawyers’ practice of paying the $50 contribution on behalf of their clients affects the number of applications made for exemptions, and so the number of exemptions granted, in some districts (para 529).
597 The legal aid recipients who are most likely to be exempted from paying the $50 initial contribution are those who bring mental health proceedings. In the study conducted for the Legal Services Board, 86 percent of recipients in mental health matters were granted exemptions. (AC Nielsen MRL, 11) Of all the aid recipients who were granted exemptions (17 percent of the total), the fact that aid was sought for mental health proceedings was the reason, or a reason, given by the district subcommittee in 42 percent of the cases. (AC Nielsen MRL, 66)
598 The same research shows, however, that in more than one quarter (26 percent) of the cases where exemptions were granted, district subcommittees did not provide reasons for their decisions. In a further 26 percent of exemption cases, one or more of the following reasons was cited: hardship, insufficient income, on a benefit, no funds, no assets. In the remaining 5 percent of cases, “other” reasons were cited. (AC Nielsen MRL, 66)
599 District subcommittees gave similarly imprecise reasons for the exercise of their discretion to grant an exemption from the imposition of charges on recipients’ property. In 18 percent of the cases in which such an exemption was granted, no reason at all was provided. In the remaining cases the reasons provided
were very general; that is, “no assets” (19 percent), “recipient on a benefit” (15 percent), “mental health” (8 percent), “hardship” (1 percent), “insufficient income” (1 percent), “not cost effective” (1 percent), “no funds” (1 percent), some combination of those reasons (34 percent) or “other” (2 percent). (AC Nielsen MRL, 72)
600 The inconsistencies among district subcommittees in their decisions to exempt payment of the $50 contribution, and the generality of their reasons for granting exemptions from both contributions and charges, provide little assurance that aid recipients in different parts of New Zealand are being treated substantially similarly. Relevant to this matter is s 96(1)(b) of the Legal Services Act which confers broad power on the Legal Services Board, “for the purposes of carrying out its functions”, to issue instructions to district committees, subcommittees and Registrars, concerning: “the policy to be followed by District Legal Services Committees, District Subcommittees, and registrars in carrying out their functions under this Act”. The board’s instructions must also be observed by the Legal Aid Review Authority (s 132(2)), the body to which an appeal may be taken against a district subcommittee’s decision.
601 Any instructions about the policy to be followed in the exercise of subcommittees’ discretions to impose charges and to exempt the payment of contributions would relate to the board’s function, set out in s 95(1)(c ), to ensure that the operation of civil legal aid “is as inexpensive, expeditious, and efficient as is consistent with the spirit of this Act”. The “spirit” of the Act, in turn, is captured in the Long Title which states the Act’s purpose is “to make legal assistance and legal services more readily available to persons of insufficient means . . . .”
602 There is a strong argument that, as the legal aid scheme’s financial eligibility criteria erode in value, the need increases for the Legal Services Board to issue instructions concerning “the policy to be followed” by district subcommittees in the exercise of their discretionary powers with regard to applicants’ financial eligibility and liability for recovery. In other words, as the financial eligibility tests become more restrictive in their effects and require subcommittees to exercise their discretions on more occasions, there is an increased likelihood of inconsistencies among the decisions made around the country. The existence of a right of appeal from subcommittees’ decisions does not substitute for the most careful efforts to ensure that their decisions are reached on uniform grounds and with due attention to policy matters which deserve particular weight. Further, the existence of clear policy guidelines would assist the Legal Aid Review Authority in its task. Its decisions on matters that are the subject of board instructions, and which are made available to district subcommittees as a matter of course, would promote further consistency across the 19 districts.
603 Until February 1999, when the Legal Services Board issued new charging instructions to take effect on 1 May 1999, it had been light-handed in its use of this means of influencing the exercise of district subcommittees’ discretions. The new instructions represent a significant move by the board towards the attainment of four objectives:
• achieving consistency in the various district subcommittees’ decisions on charges;
• achieving more effective use of charging agreements (under which the debt to the board is repaid by instalments);
• ensuring subcommittees consider factors of particular relevance to women recipients of legal aid; and
• encouraging the use of mediation in legally aided proceedings for which mediation is not available in the court or tribunal with jurisdiction over the proceedings.
604 The third of those objectives (ensuring subcommittees’ attention to matters relevant to women aid recipients) is of particular interest here. The instructions state that subcommittees may consider a number of matters to be relevant when they are determining whether to grant an exemption, in whole or in part, from an automatic charge. One of those matters was included in the previous charging instructions (issued in 1992), namely:
that applying the automatic charge in full would, in the circumstances of the case, leave the aided person with a disproportionately small portion of the monetary value of the property that was preserved or recovered.
But a new matter for subcommittees’ consideration, as stated in the 1999 instructions, is:
that the monetary value of the property recovered or preserved in the proceedings was:
(i) less than $15 000; and
(ii) in the special circumstances of the case is immediately needed to assist in providing a residential property as a home for one or more dependent children and their parent or caregiver. (Civil Legal Aid Charges Instructions, 1999, 7)
It is to be hoped that the board will monitor very carefully subcommittees’ reliance on these matters in their charging decisions.
605 The Legal Services Board has now demonstrated very clearly its willingness to issue instructions about district subcommittees’ charging practices. However, it is understood that the board considers it may not be useful to issue instructions elaborating the policy which should govern subcommittees’ grant of exemptions from the $50 initial contribution. Part of the reason for this is likely to be the board’s awareness of the large workload of some district subcommittees and its concern that attempts by it to ensure consistency and equity in their decisions about the $50 initial contribution may be “the last straw” that deters lawyers from providing their services voluntarily to what may be seen as an increasingly “bureaucratised” regime.
606 The pressures on subcommittees are well-documented and deserve the most serious attention by the government. (See Review of the Legal Services Act 1991, Part II – Reform of Legal Aid Delivery, Legal Services Board, September 1997; Report of the Legal Services Board For the Year ended 30 June 1998, 23, 36) It is understood that the Ministry of Justice’s review of legal aid includes a focus on those matters. The reduction, or even abolition, of the role of district subcommittees may be a result. Whatever the administrative outcome, however, the policy governing the $50 initial contribution is of vital importance to legal aid applicants and recipients, as has been seen. For that reason it is essential that those responsible for administering the scheme take all possible steps to ensure that the policy is transparent and operates fairly.
607 As was said at the outset of chapter 6, the ability of the Legal Services Act 1991 to achieve its objectives depends on the extent to which the range of legal services available in New Zealand can be co-ordinated to ensure that appropriate services are accessible to all who need them. The present configuration of the legal services arena, and also the wider civil justice system, means that legally aided representation services provided by lawyers in private practice must fill a very large part of the gap between the needs of low-income New Zealanders’ for state-sanctioned dispute resolution processes and their ability to afford to use them. The deficiencies in the civil legal scheme discussed in this chapter lead to the conclusion that its fitness for that purpose is seriously impaired.
608 Using the principles and process which this study has identified as essential guides to lawmakers’ and policy makers’ efforts to promote the just treatment of women by the justice system (see chapter 1 paras 64–66), any strategy to address those defects should ensure:
• equitable outcomes between women and men in the operation and application of the civil legal aid scheme;
• the availability of diverse measures to meet the diverse needs of New Zealand women for legally aided services;
• transparency in the means by which legally aid service providers are accountable for the standard and quality of their services; and
• co-ordination of legally aided services and all other legal services.
609 Accordingly, it is recommended that:
• the current financial criteria for eligibility for civil legal aid be revised upwards and tied to an appropriate index to maintain their value over time;
• the current general requirement for an initial contribution from legal aid recipients be reviewed to assess whether it is warranted and, if so, to ensure that its level and manner of application ensures equitable results for aid recipients;
• the options for simplified application procedures be investigated urgently;
• the New Zealand Law Society and the Legal Services Board publicise more extensively the availability of free and low-cost legal services other than those provided through the legal aid scheme;
• the Legal Services Act be amended to achieve a more equitable recovery (charging and further contribution) system for all categories of applicants;
• the Legal Services Board in the meantime investigate whether inequity results from the capital test’s focus on the kind, rather than the value, of property which may be deducted, and develop measures to reduce any such inequity;
• the Legal Services Board ensure that all legal aid recipients receive a simply worded statement which sets out the conditions on which aid is made available and contextual information which indicates the incidence and value of the recoveries that are required from aid recipients, and which advises recipients to ask their lawyers or other appropriate contact people for clarification of any points about which they are uncertain;
• the Legal Services Board monitor the effects of its new charging instructions;
• the Legal Services Board take all possible steps (including publicity among lawyers) to ensure consistency and equity in the manner by which the initial contribution is required to be paid or exempted by district subcommittees;
• the Legal Services Board and New Zealand Law Society explore the feasibility of accreditation schemes as a means of assuring the service quality of civil legal aid lawyers;
• the Legal Services Act be amended to enable the board to fund the piloting and establishment of alternative means of delivering legally aided services which include quality assurance measures;
• the Legal Services Board develop a more comprehensive programme of public education about civil legal aid;
• the New Zealand Law Society and the Legal Services Board co-ordinate and increase their efforts to inform the profession about the use and operation of the civil legal aid scheme in New Zealand.
610 Chapters 6 and 7 have examined the delivery of community-based legal services and the operation of the civil legal aid scheme. The next chapters consider the regulation and delivery of legal services offered by lawyers in private practice generally.
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