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Legal Aid Funding

09 October 2012 - The government has announced changes to proposed legislation aimed at tackling the large increases in legal aid costs.

The Government has announced changes to proposed legislation aimed at tackling large increases in legal aid costs, while ensuring people have adequate access to justice services.

Legal aid expenditure rose from $111 million in 2006/07 to $173 million in 2009/10 – an increase of 56 per cent.

The new changes to the Legal Assistance (Sustainability) Amendment Bill allow it to strike the best balance between ensuring the financial viability of the legal aid scheme while still protecting the most vulnerable people.

The proposed Family Court reforms (Family Court Review) and the success of initial efforts to curb legal aid expenditure have meant the Government can moderate some of the Bill’s original proposals. However, on-going fiscal pressures mean legal aid savings still need to be made.

Cabinet has agreed to changes to the Bill, which is currently before the Justice and Electoral Select Committee.

In February, the Minister of Justice asked the committee to defer its consideration of the Bill, so that the Government could align decisions on legal aid eligibility issues with proposed changes to the Family Court.

The new changes to the Bill include:

  • Reducing the proposed user charge for civil and family cases from $100 to $50.
  • Changing the point at which legal aid debts will begin accruing interest. Interest will now be imposed six months after the total debt is finalised, rather than immediately.
  • Removing the proposal to tighten the financial means test for less serious criminal cases, such as theft, assault or careless driving.
  • Retaining the current definition of disposable capital in the means test. The proposed change was intended to simplify the assessment process – not to reduce eligibility.
  • Keeping the existing approval frameworks for lawyers who can provide lawyer for the child and youth advocate services, rather than creating new criteria and standards.
  • Retaining the list of types of proceedings eligible for legal aid in the Legal Services Act. This means changes to the list must be made by Parliament, rather than the Executive.

Additions to the Bill will also be made, including measures reflecting the Government’s view that people have an obligation to repay legal aid debts.

  • A new provision will prevent people who are not meeting their legal aid debt repayment requirements from receiving legal aid for some further civil and family proceedings until they start repaying their existing debt.
  • The Legal Services Commissioner will have the ability to issue deduction notices to recover legal aid debt that is in default. This change was announced in April 2011, but not included in the original Bill.

The new legal aid decisions align with the Family Court reforms, which were announced in August 2012. The Family Court reforms will reduce the need for legal aid by supporting people to settle their disputes without going to court. Also, simplified and streamlined court processes will mean that in many care of children cases, parties will represent themselves without the need for a lawyer. However, people will only get legal aid for proceedings in which legal representation is needed.

Other related initiatives approved by Cabinet include stepping up efforts by the Ministry of Justice to recover existing outstanding legal aid debt. Of the outstanding debt established since 2006, about $35 million is unsecured or not subject to a repayment plan.

Most of the changes to the Legal Assistance (Sustainability) Amendment Bill will be included in a Supplementary Order Paper (SOP), which will be referred to the Justice and Electoral Committee. To reflect the changes, the committee will be asked to rename the Bill to the Legal Assistance Amendment Bill.

The changes to eligibility for care of children matters will be included in the Family Court Reform Bill, which will be introduced to Parliament later this year.

Once the legal aid SOP and Family Court draft legislation is introduced, members of the public can follow their progress at www.parliament.govt.nz. Public submissions on the Family Court Reform Bill’s proposals can also be made when it is before a parliamentary Select Committee.

The Minister of Justice’s news release about the announcement is here.

The legal aid Cabinet papers and regulatory impact statement are available here [hyperlink the 7 titles below]:

  • Cabinet paper: Addressing funding pressures in legal aid and the Family Court (September 2011)
  • RIS: Legal aid and Family Court cost pressures (September 2011)
  • Cabinet paper: Changes to the Legal Assistance (Sustainability) Amendment Bill (July 2012)
  • Cabinet paper: Legal aid reform: retaining eligibility for civil proceedings (September 2012) [In addition to the changes made in the July Cabinet paper, this paper rescinds the September 2011 Cabinet decision to remove legal aid for relationship property, maintenance and some civil proceedings.]

The Family Court Review Cabinet papers and regulatory impact statement are available here:

  • Cabinet paper: Family Court and legal aid reform: overview (July 2012)
  • Cabinet paper: Family Court review: proposals for reform (July 2012)
  • RIS: Family Court review (June 2012)

NOTE 1: The September 2011 legal aid Cabinet paper should be read in conjunction with the subsequent Cabinet papers.

For example, the September 2011 paper included proposals to tighten legal aid eligibility for certain family and civil cases. In July and September 2012, Cabinet agreed not to proceed with those proposals.

These decisions mean that the types of proceedings eligible for legal aid remain unchanged from the status quo.

Several other proposals in the September 2011 Cabinet paper were subsequently removed or amended by the later Cabinet decisions, while additional proposals were added.

NOTE 2: The legal aid regulatory impact statement accompanied the September 2011 Cabinet paper. A further regulatory impact statement was not necessary for the 2012 legal aid Cabinet papers because the policy issues contained in those papers had already been considered by the regulatory impact statement prepared in 2011, or were covered by the Family Court Review’s regulatory impact statement.