Introduction
5.1
High legal fees and costs were a consistent theme raised by many submitters and witnesses throughout this inquiry. Chapter 3 of this report canvassed some of the personal stories put forward by submitters and witnesses with the committee hearing that hundreds of thousands of dollars—sometimes more—were spent on legal representation, occasionally leaving one or both parties with little or no assets at the end.
5.2
The potential disparity between the legal costs and the property pool in a settlement has been raised by many submitters and witnesses. At the committee's Sydney hearing, the committee Chair reflected on some of this evidence:
One of the most constant complaints made to this committee in the written submissions and, indeed, in the hearings that we've had with individuals is about costs—about excessive costs and legal fees that are disproportionate to the total assets of the couple. Only three days ago we heard of a case in Townsville where costs were $170,000 for total assets [of] about $500,000. The next day we heard of costs of $800,000 to $900,000 for total assets of just over $1 million. And yesterday we heard of total legal costs of $500,000 where the assets were only $200,000.
5.3
One witness told the committee that two-thirds to three-quarters of the value of their assets were consumed in legal fees:
I would say about half of my wage was going straight to the solicitor for a number of years. That's on top of the child support agency garnishing a third of my wage for the oldest child as well.
5.4
The Attorney-General's Department (AGD) submitted the following about legal costs for family law matters:
In 2018, PwC estimated that litigants in the Family Court of Australia can spend over $110 000 per matter and, in the Federal Circuit Court, over $30 000. In some cases costs can reach into the millions of dollars. These costs are out of reach for many families. One judgment in a matter in which the legal fees totalled over $800,000 states that ‘[t]hese amounts are, on their face, outrageous levels of costs for ordinary people involved in family law proceedings’.
5.5
The recent inquiry of the Australian Law Reform Commission (ALRC) into the family law system (ALRC 2019 Report) also found that the 'family law system is expensive'. The ALRC reported that:
People told us that the cost of resolving their family law disputes through the courts and associated services was high. Some people told us about the significant impact this cost had on their financial security and that of their children. Others told us the cost made the system inaccessible to them, particularly if they were ineligible for legal aid.
5.6
This chapter examines some of the challenges associated with legal fees and then looks at some of the ways that they could potentially be reduced:
the costs of private legal representation;
cost-saving measures; and
The costs of private legal representation
5.7
In its submission, AGD noted the high cost of legal services in family law:
… for many families the costs of private legal representation for advice or family court proceedings are prohibitive. Some family law matters are unable to be resolved without the assistance of legal practitioners and the courts, due to issues such as family violence. While many high-income Australians in this situation can afford to pay private legal fees to enable them to resolve their family law disputes, the high cost of private legal representation is prohibitive to most, and means that some families who are not able to resolve their matter by agreement must resort to self‑representation in court, partial private representation, or leave their family law issues unresolved.
A fair fee for service
5.8
Some submitters and witnesses argued that legal fees reflected the value of a necessary service. Mr Michael Kearney SC, Chair, Family Law Committee, NSW Bar Association explained that legal professionals charged a broad range of fees depending on their level of expertise and experience and noted that fees for barristers in his chambers ranged from $800 up to $20 000 per day. Mr Kearney argued that fees are not an impediment to representation.
5.9
The Queensland Law Society (QLS) asserted the important role of quality legal advice in ensuring timely and positive legal outcomes:
Access to legal assistance in the early stages of a dispute can prevent or reduce the escalation of legal problems and reduce cost to the justice system overall. Private legal practitioners generally provide high quality, tailored family law advice and play an important role in resolving family law matters, including by identifying relevant issues and providing relevant information to the Court. Access to legal advice and representation is key in the resolution of matters and helps to ensure litigants are properly informed.
5.10
Ms Pauline Wright, President, Law Council of Australia (Law Council) highlighted that only a small proportion of family law matters actually progressed to trial and that these are usually highly contested. As a consequence, these matters require significant legal resources to resolve:
It's important to remember that 95 per cent of these matters effectively settle before getting to the hearing stage. So the five per cent of these difficult matters that you're reading about are the ones where the parties are really intractably opposed to each other. So they, by their nature, are unusual and exceptional and so they do incur large amounts of costs.
5.11
Ms Deborah Awyzio, Chair, Family and Domestic Violence Committee, QLS asserted that lawyers generally attempt to decrease costs for their clients:
It's our experience that family lawyers work with their clients to try and minimise costs. There are lots of examples from family law practitioners where they work out strategies with their clients to minimise costs. For instance, some lawyers talk with their clients about not formally being on the court record for them in between court appearances so that their clients can manage their administrative-type correspondence coming back and forth between parties and then when they are appearing in court the solicitor will come back on the record. We have many examples of lawyers who work with their clients to minimise their costs as much as possible.
5.12
Furthermore, Ms Wright argued that some legal work can be incorrectly categorised as routine or simple when in fact, it requires considerable expertise and time to complete:
We have to remember that sending an email isn't just the sending of an email. It's all of the work that goes into the advice behind that email. So it's not just the sending of an email at the click of a button. There's a great deal of expertise that goes into the formulating of what's in it.
5.13
Ms Suzanne Christie SC, Chair, Family Law Committee, Australian Bar Association highlighted the problem with focusing on the top tier of barristers and the fees they charge rather than looking at the entire specialisation and the range of fees that are charged:
I think what it does is fail to appreciate the difficulty of the family law matters, in thinking they can go work in another area of law. What it does is give second-class justice to family law litigants, as though their legal issues aren't as important as a corporate issue or a tax issue. What we really want is a cross-section of people, at all cost levels, but with a specialisation, where possible, to provide a proper service from an experience basis and not be dissuaded from doing that work because it's not valued.
5.14
Ms Christie also pointed out that in some circumstances, lawyers did not always pass costs on to clients:
… sometimes the cost is shifted to the lawyers. For example, family lawyers very frustrated [for] their clients about delay discount their bills on a daily basis. They say: 'We were there at that court all day but the judge couldn't hear us until 3 o'clock. I cannot in all conscience charge my client for that.' So it will be that family who isn't paying. So the cost burden is shifted not from the court to the litigant but from the court to the lawyer. That's happening regularly and frequently, because we feel bad about what the court can't provide.
5.15
Women's Legal Centre ACT highlighted that 'each state/territory already have professional regulatory frameworks and regulations which provide that lawyers must provide adequate costs disclosure to their clients'. This was supported by a number of other submitters in other jurisdictions. The QLS stated in its submission that:
… Solicitors are extensively regulated by the Legal Professional Act 2007 [(Queensland)] in the manner in which disclosure is to be made and the information which must be provided to clients. Solicitors' fees are subject to an overarching requirement that they be 'fair and reasonable'. Gross overcharging is a matter that is characterised as 'professional misconduct'.
5.16
Notwithstanding this, the committee heard from some who argued that legal fees were too high:
Most people in this country work for $26 an hour on the average worker's wage. I've been with the lawyers recently, again, and they charge $350 an hour.
5.17
A parent appearing as a witness was critical of her son's legal expenses:
Our son's barrister had to re-read all the history before this final [court appearance], and for him to appear it cost our son just over $40,000. I find this amount very, very hard to accept. Our son is still waiting on a result, and his lawyers have told him that this result can take three years from the last court date. I find this unacceptable. To date, our son has spent just over $950,000 on legal fees, expert witnesses and valuations. His ex has spent approximately $635,000. We have loaned sums to our son to enable him to pay his legal team.
Delays
5.18
Mr James Steel, President, Family Law Practitioners Association of Queensland described how delays are a major factor in driving elevated legal costs:
… reducing delays in the court system will greatly improve and lower the costs that the parties are being required to pay. Delays mean more interim applications, multiple family reports in parenting cases often being required, updated subpoenas inherent in cases often being required, updated valuations being required in property matters and updated subpoenas in property matters. If parties can be transitioned through the court process—that's the limited number of parties who need the court process—then their costs will be significantly reduced. If they can be transitioned through quicker their fees will be significantly reduced.
5.19
Ms Wright explained that 'the single most significant factor impacting costs is the delay in reaching a final hearing, if one is ultimately required'. The difficulty in quantifying the effect of delays on a matter leads to difficulties in anticipating how much a particular case may cost. Ms Awyzio commented:
In respect of the legal fees, our experience has been when providing estimates for clients that we have to factor in the delays that are in the system. So when estimates are provided they're very comprehensive and they set out on a step-by-step basis what clients can expect to pay. They clearly say, 'At the moment, with the way that the system is resourced, there is a chance when you have a trial date assigned that your trial will not be heard on that date and there will be a need to reprepare in six months' time, with further costs incurred like valuations updated.' Unfortunately for family lawyers that is part of our advice-giving to clients. They obviously give very practical advice that is reactive to the system that they are in in the family law system.
5.20
The Association of Family and Conciliation Courts, Australian Chapter held a similar viewpoint:
Quite often legal fees associated with litigating a family law matter are increased through the delays encountered with the court system, long wait periods to engage with a family dispute resolution service provider or family report writer and the subsequent need to obtain updated valuations of assets, updated family reports and engage in multiple rounds of updated disclosure. It is submitted by Association of AFCC Australia that with increased resources available to intensively triage matters at an early stage the scope of disputes can be narrowed quickly and an increased number of early resolutions reached. AFCC Australia submits that the best way to reduce the legal fees associated with litigation is to assist parties to reach early resolution to their matters.
5.21
Delays in family law matters are discussed further in Chapter 6.
Cancellation and disappointment fees
5.22
Cancellation fees or disappointment fees were described by the Law Council as intended to:
… protect counsel from the consequences (and lost fees) arising from the late adjournment or settlement of matters where counsel, in some instances, may have blocked out considerable periods of time to be available to appear and who may have declined other work at that time in order to be available.
5.23
Some submitters were concerned by the use of these types of fees including the Australian Brotherhood of Fathers (ABF) who argued that disappointment fees should be banned. The ABF elaborated:
For the 'working poor' who engage barristers at the interim hearing stage alone, the need to pay 'disappointment fees' can be devastating in a context in which parties have already been pushed to their emotional and financial limits.
5.24
The Australian Bar Association noted that as sole traders, barristers can reserve days or weeks of their calendar for a matter. If that matter is suddenly cancelled, then they are 'quite possibly left without court work (and so remuneration) for those reserved days or weeks'. The New South Wales Bar Association supplemented this by saying:
If a barrister is able to obtain further work for the remainder of the unused days, the barrister will not charge for that period. If, however, the barrister is not able to obtain alternative work, the commercial opportunity to generate fees which would otherwise have been generated has been lost. Reservation fees therefore seek to promote access to justice by offering improved certainty and comfort to clients that a barrister will be exclusively available to them for the duration of the matter, while providing greater certainty for self-employed practitioners.
5.25
Notwithstanding this, the Law Council added that cancellation fees were rare and always clearly set out in costs agreements. Furthermore, barristers may not charge fees which are not 'fair and reasonable, proportionately and reasonably incurred and proportional and reasonable in amount'. Mr Kearney explained how he exercised disappointment fees in his practice:
Firstly, I never charge it until the period of time is over, and, secondly, I never charge it on top of other work. I open my diary immediately I am notified. I attempt to obtain other work in lieu of. Then, you are never charged anyway as a basic term of the agreement the full face value of it.
5.26
Mr Paul Doolan, Chair, Family Law Section, Law Council also confirmed that cancellation fees were more likely to be charged in NSW, in particular Sydney, than anywhere else in the country.
5.27
Professor the Honourable Nahum Mishin AM, former Judge of the Family Court, also submitted that disappointment fees should be banned and suggested several steps that may be taken to alleviate issues around the cost of legal representation:
(a)
Disappointment fees are iniquitous and should be banned. While I am not familiar with their present use, my experience was that they stemmed from different briefing practices of the various State bars.
(b)
Time costing should be banned in family law. It can, and occasionally does, lead to inefficiency. Time costing should be replaced by event or stage of matter costing. There would need to be a discretion to increase the fees in the event of an unforeseen circumstance. The capping of fees could be approached in that context. Consideration would also need to be given to the relevance of the Uniform Law to such a decision in those States which have enacted that legislation.
(c)
Various legislative provisions require costing to be proportionate to the matters in dispute in the civil law. Any matter which is in issue must have a proper basis. I would be happy to provide the Committee with references to those provisions.
(d)
The re-inclusion of the counselling services in the Court’s structure referred to above would also reduce the cost of proceedings to litigants. Anecdotal evidence suggests that some of the charges levied by private professionals who perform assessments in child cases are prohibitive.
(e)
Achieving better outcomes in resolution of property disputes requires better funding of mediators. Improvement of rates of settlement of property matters would be directly impacted by increasing the numbers of skilled mediators.
5.28
Regarding paragraph (c) above, Professor Mushin specifically referred in his evidence to the Civil Procedure Act in Victoria, which requires costs to be proportionate and have a proper basis. He noted that these concepts are also in the uniform law for both solicitors and barristers which has been applied in some jurisdictions.
Ancillary costs
5.29
In addition to legal costs, the committee heard that there were other associated costs incurred such as the valuation—and sometimes re-valuation in the event of delays—of assets. Dr Jacoba Brasch QC, President-elect, Law Council made the following comment on non-legal costs:
If your family report is 12 months old, if your forensic accounting report finished in the 2017 financial year, all of that has to be updated. So, if you're meant to have started a trial and it gets moved, the costs of the outgoings can be significant …
5.30
The Law Council highlighted the sometimes significant cost of valuations:
If there is a dispute about the identification or value of the property pool, then valuations will need to be undertaken in property settlement cases. The costs of the required experts can be extensive particularly if there is forensic accounting evidence (in addition to real property evidence) required. The Court cannot make any decision to adjust property interests until it first establishes the ownership, and value, of the property pool.
5.31
The costs of family reports were raised as one area of significant cost for a family law matter in Chapter 4. Professor Rachael Field stated that many report writers do charge 'very reasonable fees', but that a significant amount of work goes into writing the report. Professor Field explained why people are prepared to pay these fees:
I think what people are paying for, when they're paying large sums of money, is for a quick report, and they're going to somebody who is very highly regarded, in terms of the report writing. That would then be influential in the court because a lot of store is placed in these reports, by judges, in matters. These reports also influence, to a significant degree, negotiations in mediation or private settlement and a person's ability to access legal aid. So it's a complex issue.
Cost-saving measures
5.32
Throughout the inquiry, the committee has heard a number of suggestions on how private practitioner legal costs might be reduced including:
unbundling legal services;
utilisation of processes outside the court system; and
use of not-for-profit and pro bono legal work.
Capping fees
5.33
Capping legal fees was put forward as one mechanism by which legal costs could be reduced and there was a lot of support for this. One witness maintained that 'there needs to be some sort of cap on those fees, because it's just too expensive for average Australians'. The ABF was also supportive of 'capping legal practitioners fees to improve access to justice for people who have limited resources in order to ensure that fees charged do not outweigh the value of the available property pool'.
5.34
Ms Hayley Foster, Chief Executive Officer, Women's Safety NSW said that their stakeholders were overwhelmingly in favour of capping legal fees:
Seventy-five per cent of domestic violence workers surveyed and 67 per cent of domestic violence survivors surveyed stated that legal fees should be capped based on the pool of assets. We are a voice for those frontline workers and survivors. Some of the stories that we hear are that people are unable to access the family law system or see it through to its conclusion, and they're appearing unrepresented purely due to a financial cost.
5.35
Other submitters argued that the 'introduction of capped legal fees … would assist families'. Justice for Broken Families contended that fees should be capped to ensure that the cost of litigation does not become a 'major obstacle preventing many litigants from seeking legal representation and forcing them to self-represent'.
5.36
Some reasoned that fee capping could start with a baseline and be capped at a percentage of the property pool and then in cases where the cap was likely to be exceeded, parties to a matter would then be encouraged to engage in Family Dispute Resolution (FDR) or Alternative Dispute Resolution (ADR).
5.37
However, the committee also heard the opposing viewpoint as to why capping would not work. Ms Foster acknowledged that some parties may simply 'ramp up poor behaviour until the cap was reached, rather than facilitating early settlement'.
5.38
The Law Council elaborated on some of the limitations imposed by capping:
Further, there is a concern that if a party were advised that their fees would be capped to a particular sum or percentage of the asset pool, this may make them less inclined to accept advice to settle matters or narrow the issues in dispute as there would be no cost incentive for them to do so. Fixed fees would also see the potential for work to cease at a certain stage if the costs are exhausted and reach the fee cap resulting in only perfunctory assistance provided afterwards, if at all.
5.39
At the Sydney hearing, Mr Kearney explained:
… the capping leads to a position where people are unable to be properly represented, because we don't know what happens in capping with the issues. You might have a very simple case where a cap of, let's say, $20,000 is entirely appropriate and can be done, but, if you have people being denied access by spurious allegations, serious allegations of family violence or multiple court events and applications necessary to deal with it, all you are going to do is force people to be self-represented and force people to have substandard involvement in the process because you try and fit a one-size-fits-all proposition, regardless of the issues that feed into it. That's the great difficulty with capping and it's got nothing to do with the desire of the legal profession to make money.
5.40
The NSW Bar Association maintained that the use of a cap did not take into account the unique circumstances of each case and each client:
It is unclear by what mechanism is it proposed that legal fees could be capped. It would be difficult, if not impossible, to create an enforceable, fair system of tying fees to the size of an asset pool.
Even if caps or ceilings could be applied and enforced, the size of an asset pool per se is not reflective of the amount of legal work required to ensure justice is done between the parties in any given matter. It would necessarily be an arbitrary restriction and not justifiable. Legal work is largely directed at gathering evidence of relevant issues in a case.
The size of an asset pool is only one issue. The contributions made by parties, their future needs and the existence of and access to financial resources are other issues which sometimes require extensive investigation, analysis and advice. The extent of this work bears no relationship to the overall size of the asset pool.
5.41
In addition to difficulties in people being properly represented, Ms Christie flagged that a cap 'might lead to an exodus of qualified and experienced people into other areas of law that they are highly proficient in and their leaving for family law litigants the inexperienced, the unqualified and the people who are prepared to accept something which isn't market rate for a lawyer'.
5.42
Ms Zoe Rathus AM raised concerns about possible unintended consequences of cost-saving measures:
As a note of caution there is always a risk that cost-saving measures can backfire on women seeking to protect themselves or their children from violence or abuse. Women can experience pressure to settle for parenting orders that they do not consider safe or property orders that are not fair and do not provide for themselves and their children effectively. Any measures to prevent the unreasonable escalation of fees must [not] contain principles which might shut down appropriate use of resources for vulnerable clients of the system.
5.43
Others argued that other measures such as improved case management and increased utilisation of FDR would be more effective at reducing legal costs than capping fees. The Lone Father's Association of Australia stated:
Rather than cap fees, an investment by community organisations and parents into counselling mediation and conciliation aimed at less costly resolution practices.
5.44
ADR is discussed further in Chapter 12.
Unbundled services
5.45
Unbundling of legal services 'is an option to decrease legal costs' by marketing or charging for separate tasks instead of as part of package. AGD summarised:
Traditionally, lawyers are engaged for the duration of a legal matter based on a detailed cost estimate, and then charge according to the time spent or units of work completed on the matter. Unbundling involves a lawyer assisting a client with one or more discrete tasks, rather than on an ongoing basis. Unbundling presents opportunities for consumers to manage their costs while retaining control over strategy in their legal matter. This is particularly beneficial for parties who would be unable to afford full representation. Through unbundled services, parties can seek specific, discrete assistance at key points, which can improve outcomes for those who would otherwise be unrepresented and navigating the system alone.
5.46
Mr Iain Anderson, Deputy Secretary, Legal Services and Families Group, AGD expanded on the concept:
Legal aid commissions, who are actually Australia's biggest family law practices, provide a number of unbundled services, where they might have either a solicitor or another member of staff engage on just one part of a matter rather than every part of a matter. That's, in its essence, what unbundling is. It's not saying that a qualified legal professional needs to address every part of a matter but instead can just focus on a particular thing that they might have expertise in or a particular thing that's more important than other parts. For other aspects people might not have legal representation or they might have representation by a person who's an expert but isn't a fully qualified legal professional.
5.47
Caxton Legal Services explained why unbundling services is a more appropriate approach and how in the absence of such a framework legal costs can increase:
Family law disputes for the most part do not require a full legal representation model and are more suited to the more affordable unbundled legal services model. The development of unbundled legal services has grown largely out of the family law jurisdiction which lends itself particularly well to this more cost effective way of receiving legal advice and assistance. Practitioners who do not have a limited scope retainer consider themselves obliged to manage all communications between their client and the other party, including negotiating minor parenting issues and routine disclosure. These practitioners are also not willing to perform discrete legal tasks.
5.48
This submission went on to describe the current state of play with this type of limited legal service:
The reality is that unbundled family law services are the bread and butter of legal aid lawyers and community legal centre lawyers who add legal ghost-writing to the list of unbundled services. More recently some private practitioners have decided to set up shop offering discrete legal services on a limited retainer agreement with the client and will perform tasks such as drafting documents at a fixed price or reviewing documents already prepared by the client.
5.49
The difficulties in expanding the use of unbundled services was raised by AGD:
Unbundling already occurs in the legal assistance sector, but is difficult for the private sector to implement in the current regulatory and common law environment. The need for uniform rules to deal with unbundled legal services was identified through the 2014 Productivity Commission Inquiry into access to justice, and again, more recently, through the stakeholder feedback process of the ALRC Issues Paper.
5.50
Furthermore, AGD noted that these matters were the responsibilities of states and territories and were being progressed as part of Council of Australian Governments:
Regulation of legal practice is the responsibility of the states and territories, and a uniform approach to unbundling across all states and territories is required. The former Law, Crime and Community Safety Council agreed to consider uniform rules to deal with unbundled legal services at its meeting on 19 May 2017, and this work continues under the Council of Attorneys-General. Victoria is leading this work.
5.51
Caxton Legal Services declared that specific changes would need to be made to enable private law practices to provide unbundled services:
We consider that changes are required to the Australian Solicitors’ Conduct Rules and State Barristers’ Conduct Rules to recognise, legitimate and provide a supportive framework for legal practitioners to provide unbundled legal services. Furthermore, legal training ought to include the teaching of unbundled legal services to students in a practical setting to encourage future lawyers to use the practice.
Processes outside the court system
5.52
In Chapter 12, alternate forms of dispute resolution including mediation, arbitration and family dispute resolution are canvassed. These methods have been recognised as ways to more quickly resolve disputes compared to court processes. Consequently, they can also be more cost-effective.
5.53
A focus of the recent ALRC 2019 Report was reducing delays by directing people to take 'genuine steps' towards earlier resolution to avoid incurring greater costs. Furthermore, the ALRC recommended in the event that parties do not make a genuine effort that there should be cost implications as a consequence. The ALRC also recommended that the Family Law Act 1975 be amended to:
… include an overarching purpose of family law practice and procedure to facilitate the just resolution of disputes according to law, as quickly, inexpensively, and efficiently as possible, and with the least acrimony so as to minimise harm to children and their families.
Specialist tribunals
5.54
Professor Patrick Parkinson AM put forward his suggestion for a specialist family law tribunal as a means to assist those for whom legal representation was out of reach:
Each parent who elected to go to the tribunal or was referred to it would be asked to fill in a detailed questionnaire—preferably online, but it doesn't have to be—where they can set out what the argument is all about, the history of the relationship and so on. In [this] model, when both parents have completed the questionnaire it would be analysed by someone like a judges associate, a young law graduate, who could summarise the issues in, say, four or five pages for the chair of the tribunal, who would be a very experienced lawyer. The chair of the tribunal could look at that, call the parties in and make such orders as are required. Maybe there needs to be a drug test ordered and maybe there needs to be a family report ordered. They would move things forward, refer them to mediation if that had not already occurred, and triage the case.
5.55
On occasions where resolution was difficult, the case would then be referred to a secondary tribunal process:
If it couldn't be resolved, you'd appoint an independent children's lawyer who would then prepare the case for the tribunal. Ideally if it couldn't be resolved within six months from beginning to end the tribunal would set the matter down for a hearing of no more than two hours. This has been done in Oregon, not with a tribunal but with a court, and it has been quite successful in making decisions in less than two hours. Then you would have the decision by the end of the day. This is rapid justice. It may not be perfect, but it would at least give people an answer.
5.56
Professor Parkinson noted that the tribunals could operate with legal representation being optional and that 'generally the tribunal members talk directly to the applicant and the respondent, but lawyers can suggest questions or make submissions'.
5.57
Professor Parkinson explained further how the tribunal would work in practice:
The idea was the tribunal would use questionnaires rather than affidavits to get quickly to the issue. The tribunal would ask the questions that they needed to know. A lawyer chairperson would triage the case in the early stages—somebody with decades of experience in family law. If the case couldn't be resolved, an independent children's lawyer would be appointed and the case would be heard by a three-member panel in a hearing scheduled for no more than two hours. The panel would consist of the lawyer and two other people with expertise in family issues, perhaps a child psychologist or psychiatrist or an expert on drug and alcohol issues—whatever was appropriate to the matter. The idea was that an expert panel would be able to make sensible decisions about a lot of cases in a couple of hours of hearing, rather than two to three days as happens in the courts. This was a perfect model for self-represented litigants.
Collaborative law
5.58
The committee heard about the concept of collaborative law which was described by the Australian Institute of Family Law Arbitrators and Mediators as legal practitioners who 'assist clients to resolve disputes without resorting to the Court process, focusing on preserving cooperation and assisting dispute resolution within families'. By resolving disputes outside of the court, there is the potential to reduce costs for parties.
5.59
However, Ms Awyzio said that the collaborative approach was typically how family law matters were resolved through ADR as a matter of course:
You find that these new methods of collaborative practice, mediation and roundtable discussions are regular everyday events that happen in the family law arena in Australia. That is reflected in statistics that you get straight from the Family Court's annual report from 2019. That report states that out of the 19,000 or so applications that were lodged in the Family Court, 13,000 of those were applications for consent orders.
An application for consent order involves lawyers speaking between themselves. They may have engaged in mediation. They may have engaged in a roundtable discussion. They have come to a conclusion for their client, collaboratively, with the other family lawyer involved, resulting in those 13,000 matters not having to have any determination by a judicial officer. So, yes, it is a particular area of law where certain personalities are better suited to practice in than not, but it is a very fulfilling area of law to work in. It's an area where you can assist your clients to transition to the next phase of their life.
5.60
Notwithstanding this, some witnesses such as Ms Patricia Occelli, Chief Executive Officer, Interrelate Limited called for a more proactive requirement for the use of collaborative family law practice'. Others suggested that a more compelling requirement for people to engage in mediation or other collaborative approach would be appropriate. Mr David Eagle, Partner, Divorce Partners Pty Limited summarised how this requirement would work: '[i]f one party wants to start mediating or working in a collaborative manner, the other party must join'.
5.61
ADR is discussed further in Chapter 12.
Legal aid
5.62
Legal aid is 'funded by Commonwealth and respective state and territory governments to provide legal assistance services to the public, with a particular focus on the needs of people who are economically and/or socially disadvantaged'. Ostensibly, legal aid is a vehicle to ensure that those without means are legally represented.
5.63
In 2018–19, Legal Aid Commissions (LACs) received in excess of $800 million. Mrs Gabrielle Canny, Director, Family Law Working Group, National Legal Aid (NLA) elaborated on the work of LACs across the country:
Legal aid commissions play a lead role in the delivery of family law services across Australia, across all stages of the family law process. In 2018-19 we provided in excess of two million services to people. One in five of the services requiring the skill of a lawyer were related to family violence, child protection and family law matters.
In the same year, legal aid commissions provided thousands of other family law services across Australia, including arranging and funding the appointment of just over 5,000 independent children's lawyers in family law courts. We held just over 8,000 lawyer assisted mediations in family law disputes, with an extraordinary settlement rate of 77 per cent. We provided duty lawyer services in almost 52,000 family law matters, including through FASS, which is the Family Advocacy and Support Service. That delivers family violence support services to thousands of men and women appearing in our family law courts. Legal aid commissions also administer the newly established Family Violence and Cross-Examination of Parties Scheme.
Access to legal aid
5.64
Mrs Canny explained how eligibility for legal aid is determined:
… there are formal tests that must be applied making a grant of legal aid. There is a limited bucket of money that's available and it must be fair, so we need to apply tests. We apply a means test and that takes into account income and assets. But we do apply a merits test as well. We also have what's called a guidelines test, and that comes down to how the matter ranks in severity in relation to other applicants for legal aid. Generally, legal aid is granted on guidelines for matters where children are involved in criminal matters where there is a risk of conviction, so those are the sorts of matters that are looked at in relation to guidelines. There are the three prongs of the test, and the aim is for the legal aid applicant be put in the same position as what they call an 'ordinarily prudent self-funded litigant'. That means they can't afford it themselves. Yes, there is merit in the application and, yes, it fits within the guidelines that the particular legal aid commission has enough money to fund those matters.
5.65
In addition to eligibility criteria, Ms Kylie Beckhouse, Director, Family Law, Legal Aid NSW, appearing on behalf of NLA, explained how legal aid applications are assessed throughout a family law matter:
A grant of legal aid is done in stages. In a typical matter, for example, someone would apply for a mediation grant, and then if the matter didn't settle at mediation, they would apply to commence court proceedings. Then, at various stages in the court proceedings, they would need to apply to extend the grant of legal aid. At each of those marker points, there is an assessment made of whether the matter still meets guidelines. I suppose it's fair to say that, as matters get to the pointy end or the more expensive end, there is probably more scrutiny on whether this is the type of matter that legal aid should be funding. To do that, they look at the merit of the orders being sought and take into account all of the evidence that is available. It's not correct to say that a legal aid commission would terminate a grant of legal aid on the basis of one family report. In terminating a grant of legal aid or in deciding whether or not to extend it to that expensive part of the proceedings where you would be requiring barristers and solicitors for many days, there is a fairly thorough examination of the merit and whether it is an appropriate case on which money from the public purse should be expended. We're quite conscious of that because we can often be criticised for expending public funds unreasonably or in inappropriate ways.
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In addition to a means test, and as mentioned in the previous section, legal aid also has a merits test, as described by Ms Rathus:
Legal aid has a merit test, so if you have received a family report which is unfavourable to you then legal aid will say, 'You don't have sufficient merit in your case.' I have said for many years, including when I was in private practice and in community legal centres, that it seems to me that that's a complete irony. I'm a lawyer and I now teach law students to become lawyers. The challenge of being a lawyer is to represent the person with the unfavourable report and to show what the problems with it are. But what happens is that the person with the report that's already favourable gets the lawyer, and the person with the really difficult case to argue—doesn't get a lawyer. Often part of the reason the family report is unfavourable is that you have someone who has difficulty articulating their story or is afraid to tell their story.
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Ms Bronwen Lloyd, Lawyer, Women's Legal Service Queensland informed the committee that often a negative recommendation that was not supported by the evidence in the family report would be sufficient to rescind legal aid support:
If a client has a family report and it has a negative recommendation, legal aid is often cut off, even if the report has flaws and has made assumptions that aren't supported by the evidence. Often I read reports and I get to the end and I find the recommendations are a bit surprising because they haven't been able to build the process to support the recommendation. I don't think that report would stand up if it were in court. I think we'd be able to expose some of the flaws and perhaps get the report righted to be a bit more flexible in their recommendations. But as soon as that report goes to legal aid, it's often used to show that the client doesn't have merit for legal aid and they'll lose their legal aid funding.
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Ms Lloyd further noted that often people in these situations are the most in need of legal aid as they are not able to pay for legal representation or represent themselves. For example:
… a family report writer will recommend that even though there have been high levels of violence the parents should still have equal shared responsibility for decision-making, and then because the client feels so uncomfortable with that, they'll decide to not agree on that aspect of the family report even though the legislation says that if there is violence they shouldn't have equal shared parental responsibility. So they'll disagree with the family report recommendations and then they'll be regarded as not having merit for their legal aid matter. We get unrepresented women who are victims of family violence who've experienced trauma, and that's when our service tries to help them to represent themselves, and it's very difficult.
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Dr Merrindahl Andrew, Program Manager, Australian Women Against Violence Alliance (AWAVA) told the committee that:
… when people don't have representation, the outcomes are much less fair and also less advantageous to them. It's a real problem that report writers are having an impact on the amount of representation people can get as well.
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The Council of Single Mothers and their Children discussed with the committee the Productivity Commission's report on access to justice, which commented on the numbers of people eligible for legal aid funding:
The 2014 Productivity Commission report on access to justice concluded that many people are neither rich enough to afford legal representation nor poor enough to qualify for Legal Aid. The report estimated that 'only the bottom 8 per cent of households (Australia wide) were likely to meet income and asset tests for legal aid', which is not representative of the proportion of the Australian population who are unable to afford legal representation.
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Mrs Canny put this statistic into context:
… so 14 per cent of the Australian population at that time, late 2014, were living in poverty, but only eight per cent at that time were eligible for legal aid. That starkly shows that, if all we were aiming to do was to have those living in poverty be eligible for legal aid, we would need a substantial boost to our funding.
We have previously stated that the means test used by legal aid commissions are restrictive, reflecting the limited funds available. Income tests are below many established measures of relative poverty. It is not the case that people are too wealthy to be eligible for legal aid; rather, they are not sufficiently impoverished.
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Ms Tina Dixson, Policy Officer, AWAVA told the committee that 'too often women are unable to get legal aid, or keep it'.
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Furthermore, when legal aid is not available and the costs of legal representation are too great, the committee heard that this can be particularly hard on some groups including single mothers:
Paying legal costs can set single mother families back by years and some women never recover their previous position. Women who draw on their mortgage or take out a second one sometimes end up having to sell the house to cover their debts and then struggling to find and manage rental accommodation.
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Notwithstanding this, the committee also received evidence suggesting that 19 per cent of single mothers were accessing legal aid compared to the total population average of eight per cent.
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One witness made clear the difficulties some fathers have in accessing legal aid which can be exacerbated if the other party does qualify for legal representation:
I live by very, very modest means and I don't have money to spend on a lawyer. But because I have a small amount of equity in a property I don't qualify for any legal aid. The other party in my case has a legal team—a barrister, a solicitor and her assistant are all on her team-and that is gratis, simply because she doesn't have the equity in the block of land that I do.
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Another father's frustrations were described:
The mother in this arrangement is severely abusive, yet there is no limit to the amount of money being made available to this woman. She's had legal aid for every single hearing, at the drop of a hat, whereas the father, who's actually had the children for the last 3½ years, has had to beg, plead and scream to try and get support. Legal aid's argument is, 'Well, you've got the children, so you don't get legal aid.' This is ridiculous. Legal aid is for people who can't afford lawyers.
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Mrs Canny also said that contrary to popular opinion, legal aid providers do not preferentially fund one party over the other. In some cases, both parties to a matter may receive legal aid funding:
Yes, we will make a grant of legal aid to two parties in the same action. We will not appoint the same lawyers.
Adequacy of legal aid funding
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The adequacy of legal aid funding was raised:
… it's also important to recognise that there are huge gaps in legal aid funding available for legal aid itself but also other legal assistance providers, which means that there are huge numbers of people who are going through unrepresented. I think the pressure of being an unrepresented litigant is huge. It's daunting. For many people when you couple that with a misunderstanding around what it is that the Family Law Act says and a misunderstanding about what's a likely scenario, that also brings to bear a lot of pressure on people to consent to agreements.
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This view was supported by others including Women's Legal Services NSW who said:
Funding for full legal representation of disadvantaged clients in family law matters, including for wrap around services, access to litigation and family dispute resolution (FDR) is imperative and cannot be substituted for duty services such as the [Family Advocacy and Support Services] and [Early Intervention Unit]. The benefits of funding for full legal representation of disadvantaged clients include continuity of legal representation by someone who has a thorough understanding of the matter. Certainty of legal representation may also assist the wellbeing of disadvantaged clients and so help them give the best possible evidence they can give.
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The difficulty in obtaining legal aid combined with the high cost of legal representation means that some judgements—in particular, relatively straightforward cases—in the Federal Circuit Court of Australia are sometimes not appealed. Mr Doolan advised that:
… the reality is that those cases tend to be less productive appeals for a couple of reasons. One is the complexity or lack of complexity compared to the superior court. The other is also money, sometimes. The people who are going through that system don't have the money or won't get the legal aid to fund an appeal, and that's part of it as well.
Existing and future legal support
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Whilst concerns were raised about the eligibility for, and adequacy of legal aid, the Australian Government currently grants significant funds for legal aid services. As noted earlier in Chapter 2, the Government provides funding for 'the delivery of legal assistance through LACs, Community Legal Centres, Aboriginal and Torres Strait Islander Services and Family Violence Prevention Legal Services' with the majority of these services being for family law matters. Other programs used to reduce delays and costs such as Family and Advocacy Support Services are discussed in Chapter 11 and the cross‑examination scheme in Chapter 7.
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The committee notes that, while the cross-examination scheme received almost universal support from those submitters who raised it, it was initially underfunded which led to a number of matters being delayed pending the securing of additional funding:
Funding the Scheme is crucial to ensure alleged victims and alleged perpetrators alike can access legal assistance, otherwise they would be denied the opportunity to cross-examine a witness, or have their matter delayed and lives put on hold until legal aid funding can be made available from the Government. Regrettably, as outlined below, that has already been the experience of families involved in more than 35 trials in Brisbane alone…
No further funding has been committed over the forward estimates to support the Scheme. This serious underfunding of the Scheme must be addressed as an urgent priority.
Not-for-profit and pro-bono legal work
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The committee also heard about other models of legal representation. Mrs Carolyn Devries, Chief Executive Officer, New Way Lawyers informed the committee that 'many individuals are missing out on legal services and are self-representing because they fall through the gap—they aren't eligible for government funded services and they cannot afford the cost of a private lawyer'. Mrs Devries explained how her law firm operates as a not-for-profit:
New Way Lawyers opened as Australia's first non-profit law firm and thereby established a third type of family law service provider: a not-for-profit incorporated legal practice, or, as it's more commonly known, the non-profit law firm. Over the past 10 years, New Way Lawyers has grown to become one of the largest family law service providers in South East Queensland, with four branch offices and a team of 17 people, who have helped over 3,500 individuals. New Way Lawyers demonstrates that the non-profit law firm model has the ability to reduce the financial cost of family law proceedings. Being a non-profit law firm means that there's no shareholders, partners or directors in the firm seeking to make a profit from families' difficult situations. The purpose of the fees charged is simply to cover costs, not to generate profit. In New Way Lawyers' experience, this has meant that the fees charged for services are generally at least 30 per cent lower than the fees charged by law firms operating on a commercial basis. Lower fees means the model has the ability to respond to the gap in legal services by providing services to individuals who aren't eligible for government funded services and cannot afford a private lawyer.
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The committee also heard from Mrs Jessica Hatherall, Head of Policy and Strategy, Australian Pro Bono Centre who claimed that family law is consistently in the top five rejected areas of law or practice for pro-bono work. Mrs Hatherall reasoned that:
… due to the unique nature of family law and the needs of the clients in this area, we're finding that it's very difficult for pro bono providers to do work in this family law area. In addition…this is a very specialist area, which I know you heard from the Law Council earlier this morning. So, anyone who wants to provide pro bono work in family law wants to partner up with community legal centres and other family law practitioners and get training to be able to work in this area. So really…with the resource issue in this space, it's hard for them to find people to partner up with to do this kind of work.
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Mr Kearney explained his own and others motivations in providing pro bono services:
Why do I do legal aid work? Whatever views are taken, we are a profession. We do give back. We do represent people who can't afford fees. Some people, because of their fee structures, do that more often than others, or because of demand for their services. You have a combination of very experienced people who like the work; less experienced people who like the work but it's a good way building a practice; and those who view it as part of their professional practice and obligation.
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The next chapter looks at delays in the courts.