Paying for Justice: Part two of five on the ‘justice gap’ crisis

Yesterday, I wrote about the ‘justice gap’ – the inevitable consequence of a ‘user pays’ justice system that abandons those people most vulnerable to exploitation. The most obvious symptom of this is the rising number of self-represented litigants: take the figures in yesterday’s post, evidence of a grim problem in need of urgent attention. The majority of these litigants aren’t representing themselves because they want to, though. They didn’t end up here by themselves.

The Costs of Legal Action

It’s true that a number of self-represented litigants are people who would have pursued legal action without representation, regardless of the gap – people who want to feel like it’s their hands on the steering wheel, rather than someone else’s.

Those people are a minority, though, compared to those acting without representation because our justice system is currently far too expensive to do otherwise. In November 2014, it cost $6,700 to organise a straightforward one-day hearing in the High Court –

  • $1,350 to file an initiating document;
  • $1,600 for scheduling;
  • $500 to file an interlocutory application on notice;
  • $3,200 for one day’s hearing;
  • $50 to seal the judgment.

A High Court Registrar does have the power to alleviate this burden: he or she can waive fees if –

  • the person applying for the waiver has been granted legal aid; or
  • if the person is dependent on an income-tested benefit or superannuation; or
  • if the person would “otherwise suffer undue financial hardship” if they were made to pay the fee.

High Court registrars granted 1088 such waivers in 2013 and 963 in 2014. By the end of March this year, though, they had granted 202 waivers – 50 more than were granted in the final six months of 2012.

The Legal Aid Status Quo

Meanwhile, civil legal aid funding is facing its own long-percolating crisis. Overall legal aid funding was reduced from $166m in 2010/11 to $121.6m in 2013/14. Over the same time period, civil legal aid funding (not including Treaty of Waitangi claims) was reduced from $60m to $49.4m. In the recently-announced Budget, legal aid funding has been reduced to $112.3m, with civil legal aid funding reduced to $44.3m.

Not only is the Government putting the financial screws on our legal aid system, but a number of significant procedural barriers have been built to make it harder to access. Justice Helen Winkelmann of the Court of Appeal told Dunedin lawyers in her Ethel Benjamin Address

A fixed fee regime has been introduced and set at a level which has caused many practitioners to decline to do legal aid work. The financial threshold for eligibility for legal aid is set very low.* The maximum level of gross annual income for single legal aid applicants is $22,366, and $35,420 for an applicant with a partner or one dependent child.

* In the civil justice area, applicants will receive legal aid if they seek to launch an eligible proceeding, if they are an eligible applicant on the basis of financial status and other criteria, and the prospective proceeding has sufficient merit. See Ministry of Justice Eligibility Guidelines (8 July 2014).

In her article “Continuing the Conversation…The fading star of the Rule of Law”, Francis Joychild QC adds to the picture of neglect and destruction. If a litigant is successful in their application for legal aid, they “may have to repay some or all of the legal aid granted to them”. Interest is payable on that debt at a rate of 8 percent per annum, with only a 6 month grace period before that interest starts accruing.

Not only is the threshold so low that most people in need can’t access legal aid, those who can are subjected to crippling interest rates with barely any time before they kick in. This is why, of the approximately $5.92m that has been charged in interest on legal aid debt since March 2014, only $141,517 has been repaid.

On top of that, people receiving legal aid are also told that, as a result of accepting this vital aid, they consent to the Ministry sending the debt to a third party debt collector, to having the costs of that debt collector added to the debt, and to the Ministry deducting the debt via payments from their income or bank account.

There’s one final twist of the knife. Recipients of legal aid are also required to waive their right to legal professional privilege in order to comply with audits under the Legal Services Act 2011. At least the policymakers have pulled some punches here: any information acquired in this way cannot be used in a way detrimental to the legal aid recipient.

In a recent edition of LawTalk, Canterbury University’s Dean of Law Dr Chris Gallavin wrote that “The deficit between eligibility for Legal Aid and the reality of paying for legal presentation oneself is large and likely places a significant number of ‘middle class’ in an intolerable situation.” That deficit is widened by the small size of the pool of lawyers willing and able to take up legal aid cases. Joychild suggests this pool isn’t very big, and the reason for this is pretty basic: legal aid lawyers just don’t get paid enough to live on.

I understand fully why such large numbers of lawyers have withdrawn from the legal aid system. Everyone who has undertaken it in recent times has a story to tell. It is a byzantine system which at its best is demeaning towards the legal aid provider and an affront to her or his professionalism. Enough has been said already about the rates of payment. These and fixed hours are appallingly inadequate in the context of the costs of running a legal practice. Those doing legal aid now should be recognised for the fact they are in part donating their work to enable the rule of law to continue.

This isn’t just limited to the civil courts. Two years ago – two years ago – Criminal Bar Association president Tony Bouchier told the New Zealand Herald that changes to the criminal legal aid system had pushed independent barristers out of the pool of legal aid lawyers in favour of the Public Defence Service, “an underfunded organisation expected to do far too much work by many people not capable of doing the work.” By removing the ability of defendants to choose their own lawyer, experienced legal aid lawyers are finding it difficult to get work and junior PDS lawyers are being snowed under – after all, they can’t say “No”.

So let’s take stock. Even if you are eligible for legal aid – and you’re lucky if you are – it’s going to be difficult to find a legal aid lawyer who’s not already snowed under representing people just like you. The landscape is pretty grim. It’s no wonder, then, that people turn to self-representation.

Tomorrow, I’ll take a look at the challenges that face self-represented litigants when they enter the justice system, and the challenges the justice system faces when dealing with them.