Neil Sands
The government is considering bulk-contracting legal aid cases to law firms for a set fee – rather than dealing solely with individual lawyers – to improve a system that Justice Minister Paul Goldsmith admits is “no longer fit for purpose”.
The suggestion, which would represent the biggest structural change to legal aid in more than a decade, is contained in a discussion paper released by the Ministry of Justice for public consultations as part of a long-awaited system review.
Other proposals put forward include involving more junior lawyers in legal aid cases, reducing the number of specialist reports commissioned under the scheme, and simplifying both the fee structure and administrative requirements for lawyers.
“We need a scheme that is efficient and sustainable. However, we know it’s no longer fit for purpose,” Goldsmith said. “We’ve heard from the judiciary, lawyers and others that changes are needed to address difficulties facing providers and those who need assistance.”
The Law Association’s Vice President Julie-Anne Kincade KC as called for a cost-benefit analysis of the legal aid scheme as part of the review, so its economic benefits are properly understood.
Extra remuneration v sustainability
The paper acknowledges the vexed question of inadequate payment for legal aid lawyers, including concerns that remuneration has not kept pace with inflation and does not cover costs incurred.
While it canvasses the prospect of increasing fees, hourly rates and disbursements, the report also notes that addressing such a wide range of remuneration issues would require “significant additional funding”.
“Improving remuneration may help to improve the future availability of legal aid representation, but needs to be balanced against other objectives such as ensuring the long-term financial sustainability of the scheme,” it says. “There may be a need to prioritise any additional remuneration to where it will have the greatest positive impact on lawyer availability and legal aid coverage.”
The paper also rules out any changes to legal aid thresholds for civil and family cases, even though officials admit the current settings mean “some applicants living in poverty are no longer eligible”.
“This is because civil and family legal aid providers are already struggling to meet demand and we think we should attempt to address provider shortages before considering increases to eligibility thresholds,” it says.
Bulk funding trial
The paper says there has been no significant structural changes to how legal aid lawyers are paid since 2012.
“The current model used by the ministry to procure and contract private legal aid services is structured around dealing with individual lawyers on individual cases. Contracts to provide legal aid services are with individual lawyers (rather than firms),” it says. “We are considering bulk funding as an alternative funding model. Bulk funding would involve contracting groups of lawyers, or firms, to provide a specified volume of cases for a fixed price.
“We are interested in trialling implementation of a bulk funding approach. The purpose of a trial would be to assess whether bulk funding could be an effective and efficient method to purchase legal aid services.”
It says qualitative and quantitative evidence from the trial could be used to help design a bulk funding model, if it were deemed appropriate. Advantages included improved cost certainty for providers and the ministry, as well as reduced administration.
The paper also recognises the notorious bureaucratic demands involved in legal aid, citing a 2021 survey that found 47% of lawyers who said they were not interested in providing legal aid cited the administrative burden as the main reason.
In particular, it said timeframes to submit invoices and forms such as an amendment to grant (ATG) – which is used when a case needs more funding than initially agreed – were seen as “unreasonably tight”.
Potential solutions include changing the level of information required for legal aid applications, streamlining fixed fees to limit the need for ATGs and introducing pre-approval of some disbursements (which cover costs such as office-related costs, non-lawyer costs, travel and expert witness or specialist input).
Another suggestion for reducing red tape was simplifying “time-consuming” audits and reducing the scheme’s “burdensome” approvals process.
Scrutiny on specialist reports
The consultation said junior lawyers could play a greater role in the legal aid scheme.
“Making it easier for junior counsel to be approved to act and assist in legal aid cases led by senior lawyers would improve the confidence and capability of junior lawyers to take on legal aid assignments, helping to address the issue of an ageing legal aid workforce.”
It pointed to a marked increase in the use of third party and specialist reports as a major cost for the system, particularly in criminal cases. “Between 2018/19 and 2023/24, the cost of specialist input claimed for by legal aid providers across all jurisdictions increased by 342%,” it said.
These can include forensic reports, psychiatric reports, alcohol-drug reports and private investigator input.
The paper said legal aid may no longer pay for some specialist reports, particularly where there may be other mechanisms for providing specialist input to the court. It did not specify which types of reports may be axed from the scheme.
Other possibilities included set fees, maximum hourly rates, or overall payment caps for some reports, as well as introducing thresholds – such as the seriousness of the offence – before some reports can be commissioned.
The paper is open for consultation until July 23. Submissions can be made here.
Perhaps the Government should consider putting a stop to allowing non NZ citizens and non permanent residents from being eligible and receiving legal aid.