New Zealand Law Society - Fishy business with civil legal aid

Fishy business with civil legal aid

Fishy business with civil legal aid

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At her swearing-in in March, the Chief Justice indicated that: “there are few lawyers practising civil legal aid and fewer still in areas of need and the reasons for that problem are complex”.

In “Some criminal justice outcomes in 2018” in LawTalk 928, May 2019 at page 75 there was indicated to be only 2,326 open civil cases where there was a legally aided party (perhaps fewer than that if there were multiple legally aided parties). This is out of about 17,000 court cases disposed of annually, with many other civil matters in other jurisdictions. And these by 462 lead civil providers nationally at 13 June 2018 (only 35 of them acting on five or more cases in that year from 1 July 2017) – see “The parlous state of civil access to justice in New Zealand”, LawTalk 920, August 2018, page 54.

The absence of legal aid representation would lead to inefficient and poor quality self-representation, in many cases, and is a concern for everyone in the justice system. Kate Davenport QC, President of the New Zealand Bar Association, was quoted at page 67 of the May 2019 LawTalk issue, as offering a chocolate fish, or even a packet, to those who go back on the list as civil legal aid providers and, in addition, calling for more senior lawyers to “take on one or maybe two cases” pro bono each year (page 65).

Wholesale restructuring required

More encouragement than this is needed to do civil legal aid cases. Wholesale restructuring, including some modest legislative amendment, is required, if the government has the will. Hourly rates of $72-$159 are obviously not able to support the office backup that presentation of civil cases demands. The hours which are claimed by lawyers for their work are further trimmed because the providers’ views of how much time a case needs are second guessed by untrained legal aid clerks. Sometimes, the clerks have lawyer advice but then this is frequently from their in-house lawyers who may not have practised for a while and who have little knowledge of the dynamics of the client, the dispute and the other side.

Part of the problem is the estimate or amendment system, where the case is not fixed fee or where it starts out that way but you apply to take the off ramp from the fixed fees motorway. There is no ability to amend the grant if the bill is reasonable if there has not been a prior decision taken on the amount of the grant, frequently in the abstract, before the work is done. If you forget to apply for an amendment before the case is over, also, it is usually too late.

A tier of unnecessary bureaucracy

The amendment system just adds a tier of unnecessary bureaucracy, where those on opposing computer terminals fight paper tigers as to how much time a case will need. Even if a final bill has been rendered which is much less than the amendment anyway, the amendment will still be debated and the provider will need to justify his or her time by a breakdown of hours into various arbitrary categories such as “research” or “interlocutory work” or “drafting”.

A hearing gets close when you realise there is no fuel in the tank; then you have to submit an urgent amendment if there is such an overrun, box on and hope that it will be granted, sometimes experiencing disappointment after the event. The amendment system seems to be based on the consumer’s right to an estimate but it’s difficult to estimate litigation costs, with so many contingencies, and the arrangement is really with legal aid and the value of the legal work that has been done. A client whose fees are paid in the first instance by the taxpayer is realistically not going to say to a lawyer to hold off on anticipated extra work because they can’t afford to pay for it, even if there may be a repayment at the end.

Civil legal aid

Cases on civil legal aid tend to come to the office as urgent, with case management timetable orders to be met, but the client will have half the story, establishing financial eligibility for legal aid will take a while and by the time the picture has become clearer and you have even been ambitious enough to go on the court record, your certificate to legal aid as to prospects of success may not be accepted and legal aid will be refused or any interim grant withdrawn. Or the proper party may be seen to be an ineligible company or trust rather than an individual. Then, much or all of your time will not be paid and a private bill to the client will go unpaid. The effective hourly rate may be two-thirds of the figures above, bearing these factors in mind.

There are many time limits which may snare the unwary and make it difficult to practise well, such as the need to file the legal aid application in a completed fashion before the case is over, so that if financial eligibility information is delayed or piecemeal, such as the trust disclosure form awaiting attachments or employer information held up, then there will usually be no grant and no payment. Legal aid clerks have performance standards to reply to correspondence in a certain timeframe but it is apparent that to meet those deadlines, incomplete letters are sent out and later more may be required before there may be a grant. These clerks insist on replies from us with quite tight time limits when we are also in court, meeting clients etc and if we don’t reply in time then legal aid is pulled and clients are sent a letter that makes the clients think the lawyer is unreliable. Again, for no or reduced payment.

Successful applicants for legal aid with property must complete a land charge authorisation and if that is not sent to the client, signed, title search done, legal description provided and sent back in sufficient time, then legal aid may also be withdrawn. Clients without email and scanners take extra time.

More obstacles

Along the way, the other side may challenge your client’s legal aid because they don’t like his or her general costs protection in section 45(2) of the Legal Services Act 2011 (the most important tool in the poor’s access to justice and not available for the clients of those acting pro bono) and that they can’t close down the case with an application for security for costs. Then you will have to justify prospects of success and conduct of the litigation in collateral correspondence. A tempting Calderbank offer may be floated by the other side and you will have to spend non-claimable time justifying why the offer was refused and with legal aid wishing to avoid a section 46 costs application against them.

Then, you need to bill within six months of doing the work for non-fixed fee activities or you miss out. If a legal aid email arrives, among your hundreds, that always has an innocuous subject line, but may contain the seeds of financial ruin for the practice, then you have only 20 working days to apply for a reconsideration or the decision is not able to be challenged. Reconsideration and legal aid appeal work is not paid for unless your client files a fresh application for aid for it, which seems to have a certain Sisyphean futility.

After the hearing

After the hearing is over, hopefully you have estimated time for the costs phase in the event of success because you can reduce your client’s repayment as well the costs to the taxpayer. A recent, useful case here is Curtis v Commonwealth of Australia [2019] NZCA 126.

There will, in any case, be much repayment, charge and write off correspondence during and after the case which you are not paid for. For example, a client may move and legal aid may conscript you to find out where they have moved to, owing to their quaint habit of sending postal mail from time to time. Or a client’s $30 per week interim repayments may stop and you are asked to chase your client or legal aid will be withdrawn. Or the client may receive a pay rise and you will have to ensure that financial eligibility is preserved, with the financial thresholds practically obsolete but where various discretions exist.

Then, a long time after the judge has ruled, you will be caught up with the final repayment cycle, arranging for the withdrawal of any land charge or caveat and ensuring that legal aid is repaid everything it should be or it may come out of your own meagre receipts.

These formidable bureaucratic hurdles can easily induce a sense of ennui from which you may not be insulated, even by a school of chocolate fish. But there is also the general difficulty of acting against typically the big cheeses for the underdog, as when you come back from a day in court to find a welter of emails or hard copy documents on your desk, including well-researched and polished briefs or submissions from a well-resourced private party against your client.

The intelligent senior associate from a large firm may have the energy or specialisation to crush your general experience or inchoate sense that there has been an injustice somewhere. The client may be naïve and difficult to reason with or may grab at a small offer to feed the family and inevitably there is a document that your client did not mention, particularly if he or she has been dabbling in the light industrial business sector, signing such documents without proper appreciation or advice.

On those occasions, however, when your client’s narrative does see the light of day, it can be very satisfying. And that makes up for all that I have written above, particularly in Cinderella areas like ACC and employment where there is frequently not the level playing field that leads to the balanced scales of Justitia.

Steven Zindel has run his Nelson firm Zindels since the end of 1994.

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