Minimum wage earners, pensioners no longer qualify for legal aid

3:25 pm on 14 October 2021

The number of New Zealanders eligible for legal aid has plummeted from an estimated 1.2 million in 2007 to 400,000. In the last installment of the series Is This Justice?, Farah Hancock investigates.

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Chief Justice Helen Winkelmann says the "justice gap" between those eligible for legal aid and people who can afford a lawyer is growing Photo: RNZ/Vinay Ranchhod

The phone rings at the Citizens Advice Bureau and a volunteer answers. At the end of the line is a desperate woman.

She's got a court case coming up regarding the custody of her children. There's a protection order against her ex-partner and she needs help. She doesn't have enough money to pay for a lawyer and doesn't know where to turn.

Her income isn't low enough to qualify for legal aid. Can the Citizens Advice Bureau help her access a lawyer, she asks.

She's just one of a growing number of New Zealanders locked out of the justice system, caught between a sinking lid of legal aid eligibility and the cost of legal representation.

"If you're earning a minimum wage, you now can't qualify for civil legal aid. So that would indicate that the civil justice gap is bad," says New Zealand's highest ranking member of the judiciary, Chief Justice Dame Helen Winkelmann.

She's been sounding alarm bells over what she calls the justice gap - between people who do and don't have access to justice - for 10 years. In her view the legal aid system is already broken and in danger of collapsing if nothing is done to fix it.

There's a triple-whammy of issues. Hourly rates paid to lawyers doing legal aid work is well below the going rate for private legal work, an avalanche of administrative paperwork is putting lawyers off taking legal aid cases and the financial eligibility criteria for legal aid recipients is so strict few can access it.

Some work has been done to reduce the paperwork, says Winklemann, but it "just needs more money in the system".

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Photo: RNZ/Vinay Ranchhod

What is legal aid for?

The purpose of legal aid is to provide people with "insufficient means" access to justice.

Since 2007 the number of New Zealanders eligible for legal aid has plummeted from an estimated 1.2 million to 400,000.

Some of the poorest of the working poor now don't qualify for help.

A solo parent with one child, working full time for minimum wage is considered too wealthy to qualify for civil or family legal aid, as is a single person working 23 hours a week for minimum wage.

Elderly beneficiaries also don't make the cut.

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Photo: RNZ/Vinay Ranchhod

People needing help with civil matters such as employment, tenancy, ACC, defamation and family matters, are most affected by the income thresholds.

For criminal cases, there isn't a fixed income threshold, although applicants' financial situations are assessed. Eligibility for criminal matters is decided on whether the interests of justice require an applicant to be granted legal aid.

There was a time when income thresholds for civil legal aid eligibility were benchmarked against the Community Service Card. In some instances there's now a difference of thousands of dollars between the two.

A single person living alone can earn $5,798 more than the legal aid cut off and still be considered in need of a Community Services Card.

Read more from Is This Justice?

Attempts to adjust legal aid thresholds to inflation have been literally half-hearted. The last increase to legal aid eligibility thresholds was 6.5 percent over three years from 2016 - this adjusted them to counter half the cost of inflation since 2008.

So, what happens to those that don't qualify for legal aid? Lawyers fees are beyond the reach of many. The most recent survey conducted by the New Zealand Law Society took place in 2016. It found the average hourly rate for a lawyer working at a law firm was $292.70, add GST and it's more than $330.

In an Official Information Act request RNZ asked how Legal Aid Services figured that a person earning $23,821 per year had sufficient means to engage a lawyer. Acting Legal Services Commissioner Tracey Baguley responded:

"An important part of the legal aid scheme is that the financial circumstances of each person applying for legal aid are assessed on a case-by-case basis. Legal Aid can still be granted even if the requestor exceeds the financial eligibility threshold."

She didn't say how often this happens and RNZ's request for this information was treated as another Official Information Act request, with a wait time of up to 20 working days.

Rules around legal aid were tightened around 2013 to stamp down the rising cost of providing the service. Eligibility criteria were tightened, interest was added to legal aid loan debt and a $50 user charge was introduced.

Legal aid eligibility settings are meant to be reviewed every three years and recommendations for change given to the Minister of Justice. Decisions to change eligibility thresholds are the responsibility of the Minister.

The 2018 review highlighted eligibility thresholds hadn't kept pace with inflation, but no changes were made.

This year's scheduled review of legal aid has been cancelled.

Minister of Justice Kris Faafoi says he chose to cancel it because he didn't think another review would add any new information.

"Significant additional funding is required to address the issues identified during the 2018 review, including making any adjustments to key legal aid settings (eg, eligibility and repayment). In recent times, the Government has had to prioritise spending towards New Zealand's response to Covid-19. Any funding for these issues would be subject to future Budget processes."

A growing justice gap

Citizens Advice Bureau National Advisor, Legal & Strategic, Sacha Green says the organisation gets around half a million enquiries a year. Some, like the woman facing a custody case without a lawyer, are from people who don't qualify for legal aid and are looking for legal help.

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Sacha Green Photo: Supplied

Other calls are from people asking how they can navigate the legal system without a lawyer because they're anxious about the bill. Green describes it as being like a taxi ride to an unknown destination. What starts the meter and what doesn't is a mystery for many people.

"It's not like going to the doctors," she says. "If you need to go and see your doctor, you can make an appointment and know how much it's going to cost."

The organisation, heavily staffed with volunteers, assists where it can, with a view to helping people resolve issues early. It doesn't represent people in court.

"We see ourselves as the first port of call on the access to justice continuum," she says, describing the last stop as court.

If you've reached the last stop then, "it's really about people who can afford justice, not those who maybe need or deserve justice."

She's seen people give up their legal rights because the cost of a lawyer is beyond their means.

Community Law, which is another service offering legal advice and occasionally representation, sees similar issues. Chief Executive Officer Sue Moroney says the organisation aims to help the bottom 20 percent of income earners.

"That's anyone earning under about $28,000," she says, adding there is some wriggle room in their threshold.

She says the service can't keep up with demand.

"With many working people, their wages have increased at a much slower rate than the rate of lawyers putting their charging rates up, so there has been this growing gap of unmet legal need."

Lawyer Frances Joychild QC guesses around half the population is shut out from accessing justice.

"I think you've got to earn over $100,000 before you can afford a lawyer and that will depend if you've got a mortgage or rent," she says.

Frances Joychild

Queens Counsel Frances Joychild Photo: RNZ / LUKE MCPAKE

Statistics from the 2018 Census show 7.6 percent of people 15-years-and-older earn $100,000 or more a year. Around 57 percent earn between $25,000 (that's more than the maximum a single person can earn to be eligible for legal aid) and $100,00 (the level which Joychild thinks people need to be earning to afford a private lawyer).

Joychild does legal aid and pro-bono work, as well as what she refers to as "low-bono", where she discounts fees. She focuses on taking cases which have a collective element to them, in the hope of improving systemic issues.

Most weeks she turns away around four requests for help because she's overworked.

She believes the legal system needs many fixes but also thinks more lawyers should take on pro bono work, pointing out that in some countries "you have to do pro bono or legal aid work every year just to get your ticket.".

Lawyers are encouraged to do pro bono work in New Zealand, but it's not mandatory. There has been talk of setting an aspirational target of 35 hours a year of pro bono work.

Darryn Aitchison is the director of Te Ara Ture. It is a pro bono clearing house, providing a matchmaker-like service between people who need help and lawyers donating their services.

It's a fledgling enterprise, only launched this year, with the first lawyers coming on board in July. There's around 200 lawyers signed up now, but he hopes in a year's time 1000 lawyers will be on the books.

He says there's a dearth of research in New Zealand about access to justice, but overseas research suggests about 10 percent of the population has around 65 percent of the legal needs.

"Those tend to connect to social, economic disadvantage, so you really find a small number of people having multiple issues … The kind of crazy thing is that these people aren't actually connecting to the justice system, so the justice system is working for other people."

He knows Te Ara Ture can't solve all the problems facing the justice system - "we can't create more family lawyers," he says - but the service can make linking people with lawyers willing to help a little easier.

In his mind it's a service catering to that last stop on the justice continuum, and helping people with nowhere left to turn. It's aimed at clients who can't afford a lawyer and who don't qualify for legal aid.

"Basically the bottom half of the population, based on the research we've done, can't really afford a lawyer."

He points out legal aid rules for civil matters say anyone with more than $80,000 equity in the family home is ineligible for legal aid, "which would be essentially any homeowner these days".

His hope for the service is that it helps build a culture of pro bono work in the New Zealand system.

University of Otago lecturer Bridgette Toy-Cronin says she and a colleague researched how much pro bono work lawyers are currently completing. Forty-one percent are already doing 35 hours or more a year, but 27 percent aren't doing any.

Bridgette Toy-Cronin Director, University of Otago Legal Issues Centre

Bridgette Toy-Cronin Photo: University of Otago

In their research they found many lawyers aren't even sure what technically counts as pro bono work, with some listing sitting on the board of a school or charity as pro bono work.

Toy-Cronin says she wasn't surprised at misconceptions volunteer work is the same as providing pro bono legal services.

"If you put a Latin name on something it's going to introduce a certain slipperiness to what it actually contains."

She doesn't see pro bono as a solution to access to justice issues and thinks some more imaginative solutions are needed.

"I think it's very dangerous to keep going with the same refrain about the access to justice problem being answered with more legal aid and more pro bono."

The rules committee

The Minister of Justice may not be making changes to the legal aid eligibility rules, but the court system is looking at what it can do to improve access to justice for civil cases.

Sweeping changes to civil litigation rules are being proposed by the Rules Committee, which is in charge of New Zealand's courts.

These include increasing the number of cases heard in the lawyer-free and judge-free Disputes Tribunal. At present the tribunal can rule on cases with settlements up to the value of $30,000. There's a talk of increasing this limit to $50,000 or even $100,000.

For the District Court it's suggested a new position of Principal Civil List Judge be created to improve expertise with civil matters, as well as minor changes to other rules. For the High Court a new framework to streamline procedures is proposed.The consultation is still under way, and if the committee adopts these proposals it will put forward recommendations to the Attorney-General.

What the lawyers say

Joychild, who has referred to the rule of law in New Zealand as a "fading star", thinks there's a number of ways to improve the situation.

Raising the eligibility thresholds is on the list, as well as reviewing the legal aid loan system, and increasing the rates paid to lawyers doing legal aid work.

She also thinks the establishment of a Social Security Ombudsman could help a huge amount of low income people resolve issues.

Lawyers should be realistic about their fees too, she says.

"Too many of them are clustered around the top commercial or relationship property end of the profession where they're going to get huge money back, they're not clustered around low income people."

This is the last installment in the series Is This Justice?

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