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Home / Business

Sasha Borissenko: More for legal aid, courts, justice in Budget 2022, but still 'oily rag' rates

Sasha Borissenko
By Sasha Borissenko
NZ Herald·
29 May, 2022 03:00 AM6 mins to read

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Justice Minister Kris Faafoi has presented a suite of changes to legal aid in Budget 2022. Photo / Getty Creative

Justice Minister Kris Faafoi has presented a suite of changes to legal aid in Budget 2022. Photo / Getty Creative

Sasha Borissenko
Opinion by Sasha Borissenko
Freelance journalist who has reported extensively on the law industry
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OPINION:

Justice Minister Kris Faafoi presented a suite of changes to legal aid in Budget 2022 - thank Jesus, Mary, and Joseph - fulfilling Labour's election promise to improve the court system so everyone has appropriate access to justice.

"Legal aid is central to ensuring equity in New Zealand's justice system and by further investing over $148 million across four years, we are making sure people are not denied access to justice based on their financial means," Faafoi said.

NZ v UK

Before we crack into it, let's look at the situation in the UK. In October last year, the UK government announced the largest funding increase to the justice system in more than a decade.

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A further £2.2 billion ($4.3b) would be reserved to drive recovery in courts, prisons, and probation; an extra £550 million invested over three years to rehabilitate offenders and protect the public; and an additional £550m towards boosting victim support services each year. An extra £135m ($263m) would be spent on the legal aid sector every year.

In comparison, Budget 2022 outlined a further investment of more than $148m across four years or $37m a year for legal aid. The UK has a population of 67 million, whereas New Zealand's team of five million suggests that for every person in the UK they'll be getting $3.90 worth of legal aid, and in New Zealand a person would be getting $7.40 per person.

These figures give me hope, but is it a case of too little too late?

A system 'open to abuse'

Today's legal aid crisis arguably stems from reforms resulting from Dame Margaret Bazley's controversial report Transforming the Legal Aid System in 2009. It sought to completely overhaul what was described as a system that was "open to abuse by lawyers and defendants".

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The reforms cracked down on spending on legal aid, which grew from $111m in 2006/07 to $172m in 2010.

The Criminal Bar Association took the Attorney-General to the Court of Appeal in 2013 over the changes that meant lawyers were paid a set fee based on the seriousness of their client's charges, as opposed to being paid for the amount of work completed.

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The court found the policy unlawful in part because it was inconsistent with the Legal Services Act (which was passed in 2011 following Bazley's review).

A decade later, and there's been no movement around set fees.

What's more, the Law Society's November 2021 Access Justice survey found that half of the 2989 lawyers who participated in the research said the legal system failed to provide access to justice.

Three-quarters of legal aid lawyers had to turn away more than 20,000 people seeking legal assistance in the 12 months prior to the report's release.

Although legal aid lawyers felt a moral duty to provide legal surveys, 25 per cent planned to do less legal aid work, or stop altogether. More than half hadn't been remunerated for 48 per cent of the hours worked on their last case, respondents said.

Eligibility and loans

Faafoi has pledged that this year's Budget will help 93,000 more people to be eligible for legal aid from January 2023.

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Income thresholds will increase by 15 per cent from 2023.

Under the 2011 Legal Services Regulations, people can qualify for legal aid in civil cases if they receive a benefit from Winz, or if their income is lower than $23,820 if they are single and have no dependents, for example. Applicants have to prove they can't afford a lawyer and that means declaring income, savings, and assets.

Under the changes, it means single people will qualify for legal aid if they earn less than $27,393 a year.

Government-funded legal aid is designed to pay for legal help for those who cannot afford a lawyer, but it's considered a loan. Those who qualify for legal aid may have to pay it back, depending on how much they earn, and whether they own property.

Few know that interest at a rate of 5 per cent kicks in six months after a case has been finalised. Interest charges were officially introduced in 2013 under the Legal Services Amendment Act and the rate - which was shockingly going to be 8 per cent at one point - was set to reflect the cost of the Government not being able to use the money.

Under the Legal Services Act 2011, the Legal Services Commissioner may write off all or part of the debt if it would "cause serious hardship to the aided person" or if it "would be just and equitable" to do so].

Under this year's Budget, Faafoi says an estimated 16,000 additional people won't have to repay the loans because the repayment thresholds will increase by 16.5 per cent in 2023. The repayment thresholds will increase to both the eligibility and repayment thresholds for the next three years to compensate for wage inflation.

Poor legal aid lawyers

Budget 2022 also raised hourly rates for more than 2400 legal aid lawyers by 12 per cent beginning July 1, 2022.

Arguably this is a drop in the bucket seeing as the bulk of 12 per cent will be absorbed by inflation, which currently sits at 6.9 per cent.

Currently, a duty solicitor - those serving on the frontline of our democracy - makes as low as $92 per hour.

The average charge-out rate for a lawyer was $293 in 2016, according to a 2018 report by Otago University.

This paints a grim picture for people thinking about pursuing criminal law. For legal aid lawyers, they'll have to continue to do the best job possible on the smell of an oily rag.

Let's just hope their good will won't run out.

As for the eligibility and loan changes - this year's Budget may be promising if we compare it to Mother England, but there's still a long way to go for Labour to fulfill its promise of improving the court system so that everyone has appropriate access to justice before next year's election.

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