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Legal Aid - some common questions and their answers

What is legal aid?

Legal aid is government funding to pay for legal help for people who cannot afford a lawyer. It exists to help people who cannot afford legal help, and genuinely need that help in the interests of justice.

Why is legal aid being reformed?

Legal aid is being reformed to:

  • improve the quality of service provided to legal aid clients
  • ensure the system is financially sustainable
  • target funding to where it is needed most, and
  • provide incentives for people to resolve more minor matters between themselves rather than through courts.

Quality

Before the reforms got under way, the legal aid system did not always provide New Zealanders with the standard of service they should expect.

While the vast majority of legal aid lawyers served their clients well, Dame Margaret Bazley’s 2009 review of legal aid found that there was “a small but significant proportion of lawyers providing very poor services.”

Controlling costs and improving incentives

  • Before the reforms, spending on legal aid was rising rapidly.
    Spending on legal aid grew from $111 million in 2006/07 to $172 million in 2009/10. Following initial reforms and changes in administration of legal aid, spending fell to $169 million in 2010/11. The key reasons for the growth in spending were: a widening of eligibility in 2006 for legal aid to include less serious family and civil cases; and an increase in fees paid to legal aid lawyers in 2008.
  • New Zealanders were not convinced that legal aid provided value for money or was appropriately targeted.
    In a survey of 1000 New Zealanders conducted by Nielsen in 2011, only 15% agreed that legal aid operates in a way that provides good value for money, and only 23% agreed that it is provided only to those who really need it. Even among legal aid lawyers, a related survey found that one-third did not believe that legal aid was provided only to those who really need it, and 25% did not agree that legal aid provides value for money.
  • Though comparisons are difficult, there is evidence that New Zealand’s legal aid system is relatively expensive by international standards.
    For example, an international comparison by the UK National Audit Office found that New Zealand’s legal aid system was the fifth most expensive of 19 countries considered.
  • The legal aid system did not always send the right signals.
    Access to legal aid meant that people involved in family and civil disputes did not always have an incentive to resolve more minor disputes early and out of court, even when this would have led to better outcomes for them others involved (including children).
  • The reforms address these issues.
    They will ensure consistent quality, rein in costs, target funding to those who need it most, and ensure that legal aid does not incentivise people to prolong or escalate disputes.

What are the main reforms?

Many reforms to the legal aid system to date have been operational in nature, and have focused on improving quality, reducing administrative costs and improving the way legal aid services are purchased from lawyers. This has included merging the Legal Services Agency into the Ministry of Justice, changes to the way lawyers are approved for legal aid work and assigned cases, and changes aimed at achieving greater control of the costs of legal aid cases.

As a result, public and media debate has largely focused on these operational reforms which directly affect lawyers’ caseloads and fees rather than arguably much more significant reforms which create incentives to resolve more minor disputes early, and target public funding to better meet New Zealanders’ legal needs.

The key reforms are summarised below.

Better legal information and initial advice

Justice sector agencies are working to improve access to legal information so that people can avoid legal problems or resolve those problems themselves. This has already included the adoption of new national quality standards for community law centres. In the coming year, further options will be developed to better meet New Zealanders’ needs for legal information.

Helping people to resolve legal problems early will not only reduce demand on the court system but also lead to better and more durable outcomes for the people involved. This can be likened to building a better fence at the top of the cliff, whereas the current legal aid system is largely focused on ensuring there is an ambulance available at the bottom.

Targeting legal aid to those who need it most

The Legal Assistance (Sustainability) Amendment Bill was introduced to Parliament in 2011. As introduced, the Bill proposed to tighten some legal aid eligibility criteria, which would mean that legal aid is less likely to be provided to people who can afford their own lawyers.

The Bill also proposed to introduce user charges for some family and civil legal aid (but not for cases involving vulnerable people and care and protection of children), and to introduce interest on legal aid debts.

These changes were intended to ensure that public funding is used efficiently by targeting it to where it is needed most. They were also intended to incentivise people to resolve more minor family and civil disputes between themselves rather than through the courts.

The Family Court Review, which is being conducted by the Ministry of Justice, is considering ways to make the court more financially sustainable and better focused on the needs of people who need its services – including incentives to resolve family disputes out of court.

In February 2011, Justice Minister Judith Collins announced that consideration of the Bill will be deferred until after consideration of the Family Court Review, so that decisions about the court and eligibility for legal aid for family disputes can be made together.
Cabinet is expected to consider the review and proposed legal aid amendments later this year.

Purchasing higher quality legal aid services

Many operational changes have been implemented to raise the quality of legal aid services. These include:

  • expansion of the Public Defence Service, which independent audits have shown provides high quality, independent, and cost effective services to criminal legal aid clients – the Public Defence Service is only moving into areas where the caseload is sufficient to allow it to successfully operate alongside a healthy private bar, where it can provide choice and allow benchmarking of quality and cost
  • introduction of a new quality framework, under which lawyers have to provide evidence that they have the skills, knowledge and experience necessary to be approved to do legal aid work introduction of quality audits and new systems for handling complaints
  • assignment of less serious criminal legal aid cases to lawyers on a ‘rotational’ basis, instead of allowing clients to choose their own lawyers in all cases – this change prevents lawyers from taking on very large numbers of cases without sufficient assurance that they can represent their clients effectively
  • new contracts, being offered to legal aid lawyers in April 2012, which set out required standards of service and conduct.

Achieving more certainty over the costs of legal aid cases

Prior to 2011, lawyers were paid on an hourly rate basis for most legal aid work. As explained above, growth in the number of hours charged per case was one factor contributing to the significant overall growth in legal aid costs.

To achieve greater certainty over costs, the Ministry is introducing fixed fees for defined activities in criminal, family and ACC legal aid cases.5 The fixed fees are being applied to relatively standard and predictable legal aid activities, not to all legal aid work. New systems have also been introduced to manage complex and high cost cases.

The introduction of fixed fees is a change in the way the Ministry pays legal aid lawyers. It does not affect access to a lawyer – anyone who is eligible for legal aid will still have access to a lawyer.

Fixed fees provide greater certainty about legal aid costs for clients, lawyers and the government. This is particularly important for clients who sometimes have to repay part or all of their legal aid costs.

Fixed fees also reduce administration and compliance costs in the legal aid system – for most activities lawyers will simply have to tick boxes on standard invoices confirming that the activity has been completed. Lawyers have previously said that they spent too much time on administration.

The Ministry will monitor the new fee frameworks to determine whether they are achieving their objectives, and will review fee levels once they have been in place for long enough to assess their impacts.

The Ministry is introducing a new policy on expenses (such as travel, accommodation, and non-lawyer costs) during 2012.

Delivering better services

The Ministry is developing a new electronic operating model for processing legal aid grants and debts, which will be more efficient, simpler and easier to use for legal aid clients, lawyers and legal
aid staff.