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CHAPTER 6 - WHETHER LEGAL AID WAS UNFAIRLY DENIED
6.1 Paragraph 1(d) of the terms of reference requires the Committee to
consider whether legal aid has been unfairly denied to pituitary hormone
recipients, placing them under more pressure to accept the Commonwealth's
offer of settlement.
6.2 The settlement offer, and the circumstances in which it was made,
were considered in detail in the previous chapter. Under the offer, the
Commonwealth undertook to pay common law damages to 'on program' pituitary
hormone recipients who contracted CJD. The Commonwealth also agreed to
pay plaintiffs' legal costs of nervous shock proceedings.
6.3 The offer of settlement was first made to the plaintiffs in proceedings
by hormone recipients against the Commonwealth for nervous shock. The
offer was subsequently extended to on program hormone recipients who had
not brought proceedings.
6.4 As noted in the previous chapter, the Committee heard evidence that
a number of recipients and organisations representing their interests
considered that the offer was unfair or inadequate because it did not
include compensation for psychiatric injury.
6.5 This chapter will address the relevant background to APQ's case;
the circumstances of the Commonwealth's denial of legal aid, including
consideration of the fact that the Commonwealth was a defendant; and draw
conclusions.
6.6 The main focus of this chapter will be an application for legal aid
made to the Commonwealth by the plaintiff in APQ v The Commonwealth
of Australia and Commonwealth Serum Laboratories Ltd.
6.7 The previous chapter sets out the background and history of this
ligation. As noted there, APQ's legal advisers, Rennick Briggs, prepared
her case as a test case on the issue of liability for psychiatric injury
(otherwise known as nervous shock) arising from the fear of contracting
CJD.
6.8 APQ applied to the Attorney-General's Department for legal aid in
May 1995, and legal aid was ultimately refused in late 1996. Her matter
was listed for hearing beginning 7 April 1997, but settled on 3 April
in accordance with the Commonwealth's offer.
6.9 From the evidence before the Committee it appears that Rennick Briggs
ran APQ's case on a contingency basis, at least in relation to their own
legal fees.[1] As noted in paragraph
5.23, the AGS advised the Committee that the hearing would have taken
between 12 and 17 weeks, generating between $11.8 million in legal costs
for the parties. Rennick Briggs initially estimated that the trial would
last 8 to 12 weeks, though later acknowledged that 17 weeks was more likely.
The AGS predicted that legal costs would be exceeded if the matter went
on appeal and also stated that the Commonwealth would have appealed any
adverse decision.
6.10 The Committee heard evidence that, as a result of the failure of
the legal aid application, APQ and her legal advisers faced considerable
liabilities relating to trial disbursements (outgoings such as court fees
and transcript costs). In evidence, Rennick Briggs estimated trial disbursements
would have been significantly more than $150,000.[2]
6.11 APQ also faced the prospect of having to pay the Commonwealth's
legal costs if the court found against her in her nervous shock claim,
as the usual rule in litigation is that 'costs follow the event' (the
loser pays the winner's legal costs as assessed under the relevant court
scale).
6.12 Rennick Briggs advised the Committee that it made applications to
the court seeking directions that APQ not have to pay the relevant daily
hearing fee (of $273 per day) and that the Commonwealth be liable for
transcript costs ($850 per day).[3]
The application in respect of the daily hearing fee was unsuccessful because
APQ had a half share of the family home and a car. At the time APQ's case
settled, the court had not made a decision with respect to APQ's application
with respect to transcript costs.[4]
6.13 Rennick Briggs raised approximately $46,000 to cover trial disbursement
costs from donations from its 132 other clients. However, the firm was
concerned that this amount was insufficient to meet the anticipated disbursements
of APQ's hearing. Rennick Briggs was also unable to obtain financial assistance
from a special fund established by the Law Institute of Victoria and that,
similarly, attempts to secure assistance from local personal injuries
firms were also unsuccessful.[5]
6.14 On 4 April 1997, Rennick Briggs sent a circular letter (see Appendix
7) to other clients in nervous shock proceedings against the Commonwealth
advising that APQ's nervous shock proceedings had settled. This letter
noted that the offer had been extended to the other clients of Rennick
Briggs. It is interesting that over a page and a half of the letter details
the attempts Rennick Briggs made to secure funding for APQ. The letter
stated that `in the light of the lack of legal aid, we are not in a position
to conduct any further cases to trial'.[6]
6.15 Rennick Briggs commented in their submission:
We were appalled and dismayed by the respective decisions of
Legal Aid & Family Services [with the Attorney-General's Department]
to deny legal aid under one or more of the respective schemes in place
in respect of APQ's action. Subsequent to the final avenue for legal
aid funding being closed in late 1996, all further avenues for funding
of APQ's trial were explored but unsuccessful. Consequently, APQ was
placed in an intolerable position of having insufficient funds to cover
trial disbursements, such as daily court fees, transcript costs and
jury fees for a trial that would last approximately eight to twelve
weeks. As for Solicitor's fees, we were prepared to await the outcome
of the trial. If APQ was successful, we would have recovered costs on
a party/party basis from the Defendants.[7]
6.16 The Committee also heard evidence that the denial of legal aid to
APQ had implications for, and affected the conduct of, other plaintiffs.
One plaintiff stated bluntly that `the denial of legal aid effectively
stopped all possibility of legal action by hormone recipients against
the Commonwealth'.[8]
6.17 Mr David Ralston encapsulated the view which was also expressed
by other recipients in their submissions:
Each of us must be able to have access to justice. It appears
in this case, that if a citizen is of modest financial means, they have
no chance of having their case considered by a court when the defendant
has what appear to be almost unlimited resources. Legal aid should have
been provided to APQ. There is an overwhelming feeling within the recipient
community of anger and frustration. It is felt by many that the Commonwealth
has used strong arm tactics to quash the legal process and failed to
allow the opportunity for a fair and just outcome. Following APQ's acceptance
of the offer, many of the remaining litigants felt under enormous pressures
to accept the offer even though they felt that it failed to address
their grievances, many fearing the loss of their homes and other assets
(to pay costs) if they refused. The system as it stands, does not provide
justice.[9]
6.18 For many recipients there appeared to be a presumption that they
were entitled to legal aid. They were not financially well off and believed
they had a strong honest case with no wrong doing on their side.[10]
Unfortunately, the actual provision of legal aid does not necessarily
accord with this presumption. The Committee notes that as governments
change, legal aid guidelines change and eligibility criteria change. There
is a limitation to the funds available for legal aid and apparently meritorious
cases are not always able to be funded.
6.19 The details of APQ's legal aid applications to the Commonwealth
are set out below.
6.20 APQ first applied to the Commonwealth for legal aid by a letter
from her solicitors dated 26 May 1995.[11]
The letter was addressed to the Attorney-General's Department, which referred
it internally to the AGS and the Legal Aid Development Branch, which comes
under the Legal Aid and Family Services Division (LAFS).
6.21 LAFS provided the Committee with a detailed submission on APQ's
legal aid claims.[12] It should
be noted that much of the material related below is drawn from that submission
in addition to submissions by Rennick Briggs.
6.22 APQ's applications to the Commonwealth for legal aid were considered
for eligibility under three non-statutory schemes:
- the Public Interest and Test Cases Scheme;
- the Special Circumstances Scheme; and
- the Cases of National Importance Scheme.
6.23 The application was first considered under the Public Interest and
Test Cases Scheme.
6.24 In its submission, LAFS informed the Committee that the guidelines
then in currency for that scheme defined `public interest cases' as those
involving questions arising under a law of the Commonwealth, the
resolution of which by the courts is, in the opinion of the Attorney-General,
a matter of public importance. Similarly, the guidelines defined `test
cases' as those brought for the purpose of resolving an important question
under a law of the Commonwealth that, in the opinion of the Attorney-General,
affects the rights of a section or group of the public who are for the
most part, socially or economically disadvantaged.[13]
6.25 In addition to these specific requirements, applicants were also
subject to a hardship test and determination of whether it was reasonable
in all the circumstances for assistance to be provided; tests that applied
similarly to the statutory schemes covered by these guidelines.
6.26 The nervous shock proceedings brought by APQ were based on the common
law tort of negligence. They did not rely on a law of the Commonwealth
or the interpretation of such a law. Accordingly, the AttorneyGeneral's
Department took the view that they did not come within the guidelines
relating to the Public Interest and Test Cases Scheme.
6.27 On 21 June 1995, Rennick Briggs contacted LAFS and was told that
at first glance APQ's matter did not fall within the guidelines because
it did not involve a matter of Commonwealth law.[14]
LAFS formally advised Rennick Briggs of this on 18 July 1995.[15]
6.28 On 23 August 1995, Rennick Briggs wrote to the Secretary of the
AttorneyGeneral's Department requesting that he exercise any discretion
he might have to provide funding for the case.[16]
6.29 As a result of that approach, there was a review of the decision
not to grant legal aid under the Public Interest and Test Cases Scheme.
The review was undertaken by LAFS officers who had no connection with
the original decision and who were of a higher rank. LAFS advised the
Committee that, in conducting the review, LAFS sought information from
the AGS, the Health Department and the Office of General Counsel.[17]
6.30 Mr McDonald of the AGS, who had carriage of the APQ matter for the
Commonwealth, advised LAFS that he did not consider that the case came
with the scope of the Public Interest and Test Case Scheme. Mr McDonald
noted that the case was a common law matter rather than a Commonwealth
matter. According to LAFS' submission to the Committee, he also advised
that APQ's case was not a test case because APQ was treated between 1980
and 1985 and any finding against APQ would be because of the late date
of the treatment and the reasonable foreseeability of injury at the time.
Mr McDonald advised LAFS that 50 per cent of pituitary hormone recipients
had been treated prior to 1980. He also advised that APQ's case would
not resolve the legal issues in relation to people who had been treated
with hGH.[18]
6.31 In September 1995, the Health Department provided LAFS with information
about the Allars Inquiry, levels of expenditure concerning hormone recipients,
and 'the limited extent of medical problems and concerns that had arisen
out of the hormone treatment problem'.[19]
6.32 The propriety of seeking information from the defendant Department
in relation to the plaintiffs application for legal aid was questioned.
The Committee was informed that there is a practice within the Legal Aid
Branch when considering such applications which raise complex questions
about which the Branch has no specialised knowledge or expertise, to seek
information from those who do have relevant knowledge. In this particular
case `the comments from the department of health did not go to whether
we ought to grant legal aid; they went to the general matters of the CJD
inquiry to...widen our understanding of the issues at hand'.[20]
6.33 In a letter dated 6 October 1995, the Secretary of the Attorney-General's
Department advised Rennick Briggs that the decision not to fund under
the Public Interest and Test Cases Scheme had been upheld because the
case was essentially a common law action. The Secretary also noted that
the new Scheme for Cases of National Importance was expected to be operative
by the end of 1995. Although eligibility criteria and guidelines were
still being developed, it was envisaged that the Scheme would cover cases
arising under common law and cases that may turn on particular facts rather
than an unresolved point of law, provided that there were a large number
of cases involving similar facts.[21]
6.34 The Secretary also informed Rennick Briggs that he had asked LAFS
to consider further the application of the Special Circumstances Scheme.
6.35 Prior to 24 October 1995, the guidelines for the Special Circumstances
Scheme provided for grants of financial assistance in four situations.
They were:
(a) where a public servant or other person acting on behalf of the
government has, in the exercise of his/her duties, given incorrect advice
(or taken some other incorrect action) which has led the claimant to
taking a course which was to his/her financial detriment;
(b) where the matter in respect of which payment is sought is covered
by specific legislation but the application of the legislation would
produce a result that was unintended, anomalous, inequitable or otherwise
unacceptable in the particular circumstances;
(c) where the matter in respect of which payment is sought is not covered
by legislation but it is intended to introduce legislation and for special
reasons it is considered desirable in a particular case to apply the
benefits of the proposed legislation prospectively by act of grace;
or
where in a particular case there are other special
circumstances which lead to the conclusion that there is a moral obligation
on the Commonwealth to make a payment.[22]
6.36 On 23 October 1995, Rennick Briggs sought immediate consideration
under that scheme.[23] LAFS responded
on 26 October by requesting an estimate of possible costs from Rennick
Briggs and noting that, unless Rennick Briggs objected, LAFS could contact
the Department of Human Services and Health. It appears from LAFS' submission
that, between 23 August and 6 October 1995, the AttorneyGeneral's Department
had already obtained information from the Department of Human Services
and Health in connection with the review of the application under the
Public Interest and Test Cases Scheme.[24]
LAFS also emphasised that eligibility under the Special Circumstances
Scheme depended on `special circumstances rather than any legal liability
to pay'.[25]
6.37 On 27 October 1995, LAFS sought advice from the Office of General
Counsel on the question of whether there was a moral obligation to provide
legal aid under the guidelines for the Special Circumstances Scheme. On
1 December the Office of General Counsel responded that it did not have
any comment on this matter.[26]
6.38 According to LAFS' submission to the Committee, Rennick Briggs had
a telephone conversation with LAFS on 30 October 1995 during which Rennick
Briggs advised that `they did not think that there was much they could
provide on the issue of moral obligation' and `they would prefer it if
the Department did not contact the Department of Human Services and Health
about their submission'.[27]
6.39 Rennick Briggs reiterated this preference in a letter dated 14 November
1995. That letter also advised some details of costs, and indicated their
belief that the moral obligation on the part of the Commonwealth arose
out of the authorisation given by the Commonwealth for the use of unsafe
and untested hormones which had placed recipients at risk.[28]
6.40 On the evidence before the Committee, it appears that LAFS gave
particular consideration to whether funding should be granted under paragraph
(a) or (d) of the Special Circumstances Scheme guidelines.
6.41 On 24 October 1995 the Government in effect deleted paragraph (a)
from the guidelines. In its submission, LAFS explained to the Committee
that this followed a decision by the Government to cease Act of Grace
payments under s.34A of the Audit Act through the Department of Finance
in circumstances covered by paragraph (a) where incorrect advice was provided
leading to a claimant acting to their financial detriment.[29]
6.42 In lieu of this, a new scheme was set up called the `Compensation
for Detriment caused by Defective Administration Scheme'. The new scheme
was to be administered by the Minister of the department or agency alleged
to have engaged in defective administration. Thus it fell to the relevant
Minister to determine whether a payment should be made. It would appear
that, as of 24 October 1995, this was no longer a matter for the Attorney-General's
Department to decide.[30]
6.43 LAFS advised the Committee that on 19 December 1995 Rennick Briggs
were advised in a telephone conversation that the Special Circumstances
Scheme `may have been replaced by new arrangements' and that `a decision
in the case would be delayed while the ambit for the operation of the
new scheme and its effect were clarified'.[31]
6.44 On 15 January 1996, Rennick Briggs wrote to the Secretary of the
Attorney-General's Department raising `your Department's failure to determine
our application for funding' and concerns about the possible effect of
the Compensation for Detriment caused by Defective Administration Scheme.
Rennick Briggs particularly sought the Secretary's intervention `in order
that at least a decision be made one way or the other as to which scheme
our application is being considered under and when a decision will be
made'.[32]
6.45 It would appear that sometime after this the Attorney-General's
Department established that the effect of the new scheme was to remove
paragraph (a) type applications from the ambit of the Special Circumstances
Scheme.[33] Accordingly, APQ's
application for legal aid now fell for consideration under paragraph (d).
6.46 One matter that remains unclear from the LAFS submission is whether
there was an application to the appropriate Minister (presumably the Minister
for Health) under the Compensation for Detriment caused by Defective Administration
Scheme.
6.47 The Attorney-General's Department considered paragraph (d) of the
Special Circumstances Scheme guidelines. As noted above, that enables
funding `where in a particular case there are other special circumstances
which lead to the conclusion that there is a moral obligation on the Commonwealth
to make a payment'.
6.48 LAFS wrote to Rennick Briggs on 25 January 1996, indicating that:
On the available material, [LAFS is] unable to conclude that
a moral obligation exists as this involves, in effect, making a preliminary
finding on the very matters to be litigated. Accordingly, [LAFS has]
decided not to approve assistance under this scheme.[34]
6.49 The letter noted that any request for a review of this decision
should be lodged within 28 days. Rennicks requested a review of the decision
that day. The LAFS letter also indicated that APQ's application would
be considered for eligibility under the Cases of National Importance Scheme,
which had commenced on 1 January 1996.
6.50 LAFS advised Rennicks of the outcome of their internal review in
a letter dated 4 October 1996. The decision was to affirm the original
decision and refuse assistance to APQ under the Special Circumstances
Scheme.
6.51 In relation to paragraph (d) of the guidelines, LAFS acknowledged
that:
The findings of the Allars report and the decision of Justice
Morland in the English High Court CJD litigation offer support for the
view that there may be a moral obligation to compensate for injuries
suffered as a result of the hormone treatment program.
However, LAFS continued:
The Commonwealth has provided compensation in all cases where
CJD has developed and $5 million for counselling support has been made
available by the Commonwealth for all those who participated in the
hormone treatment programs. Quite clearly, there is a demonstrated intention
on the part of the Commonwealth to assist those who do become afflicted
with CJD and to help all who were part of the hormone treatment program.
APQ's claim is for additional recompense. I do not believe that an obligation
exists in the circumstances to assist her in that claim.[35]
6.52 In the letter of 4 October 1996, a copy of which is at Appendix
10, LAFS also denied there was a moral obligation on the Commonwealth
because APQ's case fell outside `the currently applied principles of law
on negligence in Australia'; APQ's legal costs would be disproportionate
given the funding available; and her legal costs would be disproportionate
in relation to any damages should she succeed.
6.53 LAFS next considered APQ's legal aid application under the new scheme,
which was established on 1 January 1996, called the Cases of National
Importance Scheme.
6.54 This scheme replaced the Public Interest and Test Cases Scheme under
which LAFS had first considered APQ's legal aid application. As noted
above, LAFS had rejected APQ's application under the Public Interest and
Test Cases Scheme because the guidelines had only referred to funding
for matters arising under Commonwealth legislation, and APQ's matter arose
under the common law.
6.55 The guidelines for the Cases of National Importance Scheme were
broader than those under the Public Interest and Test Cases Scheme. They
provided that assistance could be granted for legal costs in, amongst
other things:
- cases arising under common law, where there were issues of national
importance and/or public importance involved;
- cases raising previously untested factual situations where there were
a large number of cases with the same or similar facts which could be
resolved once a `test' case had been decided by a court.[36]
6.56 LAFS advised the Committee that applications under the Cases of
National Importance Scheme were subjected to an assessment of hardship
to the applicant and an overriding consideration of whether it was reasonable
to grant the assistance.[37]
6.57 LAFS first told Rennick Briggs about the Cases of National Importance
Scheme in a telephone conversation on 21 June 1995. At that time the scheme
had been proposed by the then Government in its Justice Statement. However,
the scheme had not been established then and guidelines were not in place.
Rennicks was advised in letters during mid to late 1995 of the Scheme's
pending commencement. Finally, on 17 January 1996, Rennick Briggs received
a copy of the relevant guidelines.[38]
6.58 As noted earlier, LAFS had advised Rennick Briggs on 25 January
1996 that APQ's case would be considered under the Cases of National Importance
Scheme. The letter advised Rennick Briggs of the limited funding available,
and drew that firm's attention to paragraphs 4.14 and 4.15 of the relevant
guidelines. These paragraphs provide, in essence, that as there are only
limited funds available, not all cases will be funded, and that in assessing
an application, the decision maker must have regard to the funds available
in a given year.[39]
6.59 In January 1996, LAFS considered APQ's application under the Cases
of National Importance Scheme. For the first time a decision favourable
to APQ's application appeared to be reached. Mr Norman Reaburn, Deputy
Secretary of the Attorney-General's Department explained to the Committee:
We took the view that under that schemethe then cases of national
importance schemethis would be an appropriate case to receive legal
aid, but because the proposed costs of the matter came to something
like 50 per cent of the total money available to the scheme for four
years we intended to go to the minister and suggest that the minister
go to cabinet on the possibility of some additional funds for that scheme.
We were working on that particular proposition at the time that the
election was called.[40]
6.60 On 27 January 1996 a Federal election was announced for 2 March
1996. As a result, the Government went into caretaker mode which meant
that a decision on this matter could not be taken by the Attorney-General.
The decision whether to fund APQ's application under the Cases of National
Importance Scheme was deferred until after the election. LAFS advised
the Committee that, before the election, the Coalition announced that
it would end the Cases of National Importance Scheme, and revert to a
Public Interest and Test Cases Scheme that only funded matters under Commonwealth
law.[41] Accordingly, the Cases
of National Importance Scheme ceased operation following the election
of the Coalition Government on 2 March 1996.
6.61 APQ's matter had not been considered by Cabinet by the date the
election was called, consequently, APQ did not receive funding under the
Cases of National Importance Scheme.
6.62 LAFS advised the Committee that on 1 August 1996 the Coalition Government
established guidelines for a new Public Interest and Test Cases Scheme
to replace the Cases of National Importance Scheme. The guidelines for
the new scheme were similar to those under the former incarnation of the
scheme, although, only matters arising under Commonwealth law were eligible
for funding.[42] As Rennick Briggs
noted in their submission `the new guidelines specifically excluded
common law actions against the Commonwealth from legal aid funding'.[43]
6.63 Following a series of letters to the Attorney-General's Office,
a copy of the new guidelines were forwarded to Rennick Briggs on 26 August
1996.[44]
6.64 APQ's application was considered under the new Public Interest and
Test Cases Scheme and, on 27 August 1996, LAFS decided to refuse assistance
on the ground that under the more restrictive guidelines the scheme did
not apply to cases involving only State or common law principles. On 28
August 1996 LAFS advised Rennick Briggs of the decision to refuse funding.[45]
6.65 On 23 September 1996, Rennick Briggs wrote to the Attorney-General's
Department seeking a review of the decisions not to grant legal aid under
the various schemes.[46]
6.66 The Committee was advised that reviews were undertaken, but the
various decisions to refuse assistance were upheld.[47]
Rennick Briggs' arguments, and LAFS' responses are set out below.
6.67 Rennick Briggs submitted in its 23 September letter (see Appendix
9) that:
- as the scheme was non-statutory, it was unfettered by mandatory considerations;
- guidelines cannot, in law, be treated as though they are of inflexible
application (citing Norbis v Norbis (1988) 161 CLR 513 at 520
per Mason and Deane JJ);
- an error had been made in applying the guidelines inflexibly without
enough attention to what was expedient in the interests of the particular
cases;
- APQ's case raised a matter in the public interest and was a test case;
- there was a Commonwealth ingredient in that the case was brought against
the Commonwealth and related to the actions or behaviour of the Commonwealth;
- APQ faced a litigant (the Commonwealth) with potentially unlimited
resources; and
- APQ's success or failure should depend on the merits of her case and
not on her lack of financial resources.
6.68 In a letter of 20 December 1996, a copy of which is at Appendix
11, LAFS disputed Rennick Briggs' argument that Norbis v Norbis assisted
APQ. LAFS explained that in that case the High Court had held that it
was in order for a Family Court judge to go outside judicial guidelines
concerning the interpretation of a statutory provision concerning
property orders. In that case, then, the issue was whether the guidelines
had the potential to unduly fetter a judge's statutory discretion. LAFS
argued that the guidelines for the administration of the non-statutory
funds were different. The discretion to grant legal aid was actually
conferred on the Attorney-General. The Attorney had delegated it to officers
of his Department, but had chosen to do so subject to guidelines. LAFS
argued that those guidelines could only be relaxed by the Attorney, and
not by officers exercising his authority.[48]
6.69 LAFS acknowledged Rennicks' claim that APQ's matter was of public
importance, but reiterated that it was not a matter of public importance
within the meaning of the guidelines, because it did not arise under a
law of the Commonwealth.[49] The
Committee has already noted that the AGS did not consider APQ's matter
to be a test case.[50]
6.70 LAFS also contended that the possibility that a person might obtain
a benefit under a non-statutory scheme could not give rise to a legitimate
expectation, citing Bristol-Myers Squibb Pharmaceuticals and Ors v
Minister for Human Services and Health and Ors (Federal Court, NG
213 of 1994, 18 September 1996).[51]
6.71 In its letter of 23 September 1996, Rennick Briggs repeated its
arguments relating to the nature of the guidelines and Norbis v Norbis.
6.72 In addition, Rennick Briggs said that LAFS' stated reason in the
letter of 25 January 1996 for declining legal aid under this scheme was
that it would involve making a decision on whether APQ's case raised `special
circumstances' putting a `moral obligation on the Commonwealth to make
payment', and the Department could not determine this because it would
involve `making a preliminary decision on the very matters to be litigated'.
Rennick Briggs argued that this approach misinterpreted the word `payment'.
Rennick Briggs noted that the appropriate question was whether there should
be a payment of legal costs, whereas LAFS appeared to be
suggesting that the question was whether the Commonwealth should pay damages
on APQ's claim.[52]
6.73 Rennick Briggs also argued that the guidelines were invalid in any
case for unreasonableness, contending that, properly interpreted, paragraphs
(b), (c) and (d) would only apply if litigation was doomed to failure.
6.74 LAFS' response of 4 October 1996 (see Appendix 10) appears to have
implicitly accepted Rennick Briggs' view on the meaning of the word `payment'.
LAFS nevertheless denied there was a moral obligation in terms of paragraph
(d) because APQ's case went beyond established legal principles; the Commonwealth
had set aside $5 million for counselling for recipients; APQ's legal costs
would be disproportionate given the funding available; and her legal costs
would be disproportionate in relation to any damages should she succeed.[53]
6.75 In their letter of 23 September 1996, Rennick Briggs also argued
that the Commonwealth should have granted legal aid under the Cases of
National Importance Scheme as, while that scheme was in place, APQ came
within its guidelines.
6.76 In its letter of 20 December 1996, LAFS reiterated that the amount
of funding sought required Cabinet consideration, and it was not possible
to make a decision during the period that the guidelines were in force.
The letter continued:
It was not possible to make a decision during the period that
these guidelines were in operation and I cannot accept that the Commonwealth
is in any way obliged to apply the former guidelines on this basis.[54]
6.77 Rennick Briggs submitted in respect of the question of legal aid
generally:
That in matters of major Commonwealth Government Legal Aid funding
such as the Public Interest and Test Cases Scheme surely there is a
strong argument that the Scheme ought to be statutory in nature and,
importantly, a person or persons aggrieved by a reviewable decision
ought to be able to appeal to an independent tribunal such as the Administrative
Appeals Tribunal.[55]
6.78 Wider issues relating to legal progress have also been raised by
the denial of legal aid in APQ's case. Writing in the Journal of the Australian
Plaintiff Lawyers Association, Sean Millard suggested that `when no legal
aid is available and contentious issues such as liability for psychiatric
injury are in question, advances by the law to accommodate modern problems
will only continue to occur slowly and not without risk and cost to plaintiff
lawyers'.[56]
6.79 The Committee cannot come to a firm view on whether the decisions
made by officers of the Attorney-General's Department were properly made.
This would involve difficult questions of administrative law, especially
in relation to the question of whether the relevant guidelines were applied
in too literal and inflexible a manner. There is also an issue of whether
the guidelines for the Special Circumstances Scheme are invalid for unreasonableness.
6.80 The Committee appreciates that any government body administering
a legal aid scheme needs to prioritise claims. The Committee is also of
the view that, where appropriate, written guidelines should yield to the
justice of clearly meritorious cases.
6.81 It also appears to the Committee, based on LAFS' submission, that
the Attorney-General himself was not bound by the guidelines, and
that they only applied to decisions made by his delegates within the Attorney-General's
Department.
6.82 The real question is whether the failure to grant legal aid was
unfair; not whether there was an error in an administrative law sense.
6.83 The Committee notes the acknowledgment that by early 1996 LAFS held
the view that APQ's would be an appropriate case to receive legal aid
under the Cases of National Importance Scheme. The Committee has referred
to the limitation in funds that are available for legal aid and that apparently
meritorious cases are not always able to be funded. It was estimated at
the time that to fund APQ's case would use about half the money available
for that Scheme. This would impact on the ability to fund other meritorious
cases. Additional funds for the Scheme would require Cabinet approval.
However, policy changes after the election altered eligibility requirements.
6.84 The Committee also notes that, to an extent, LAFS attempted to come
to a view on whether APQ had a moral claim for legal aid in the context
of APQ's claim under paragraph (d) of the special circumstances scheme.
The Committee notes the matters referred to in LAFS' letter of 4 October
1996 to Rennick Briggs are relevant considerations in relation to the
question of whether the denial of legal aid was unfair.
6.85 These matters included APQ's prospects of success, the size of any
damages payment compared with legal costs anda crucial considerationthe
size of APQ's funding needs compared with the funding that was available.
6.86 Another consideration is that a grant of legal aid would have placed
APQ in a fairer position visavis the Commonwealth.
6.87 The Committee understands and has much sympathy with the feeling
expressed by some recipients that if they had committed a criminal activity
legal aid would be provided, rather than being in this situation whereby
as victims they are denied. Unfortunately, as noted earlier, legal process
does not operate in this manner.
6.88 Thus, based upon the interpretation of the eligibility guidelines
as they operated for various schemes at particular times and as described
in evidence to the Committee, on balance, the Committee is of the view
that legal aid was not unfairly denied to APQ.
6.89 The Committee has no doubt that the denial of legal aid to APQ placed
pressure on both her and her legal advisers and influenced her decision
to settle.
6.90 The Committee considers that the denial of legal aid to APQ was
also influential in the decision of other pituitary hormone recipients
to settle. The Committee has already noted the evidence of one hormone
recipient on this point and of the many individual submissions which acknowledged
that without legal aid they would not have the financial resources to
pursue court action and therefore settled.
6.91 In their letter to clients of 4 April 1997, Rennick Briggs made
it clear that they could not continue to act for hormone recipients because
of the lack of legal aid. While many of their clients have expressed strong
views about Rennicks' handling of this matter, the Committee notes that
Rennicks has documented the considerable effort and argument spent in
pursuing legal aid from the Commonwealth. When this was ultimately denied
they pursued other avenues in an attempt to obtain financial assistance.
6.92 If APQ had received legal aid, she would have been in a stronger
bargaining position visavis the Commonwealth. It is difficult for the
Committee to predict whether, and to what extent, the Commonwealth would
have yielded to APQ's additional bargaining power in such an event. The
Commonwealth may have made additional concessions. However, the Commonwealth
would probably have been mindful of the expectations that may have been
created in the minds of other litigants and potential litigants, and not
only in the context of CJD litigation. In short, the Commonwealth may
have been concerned about 'opening the floodgates'.[57]
6.93 The Committee cannot rule out the possibility that APQ's case might
have settled on the terms proposed by the Commonwealth even if legal aid
was granted. It is conceivable although one can really only speculate
that APQ's case may eventually have settled on the basis of the Commonwealth's
offer anyway. The same may be true for other plaintiffs.
6.94 While the issue of legal aid was of great importance, it was not
the only factor that the plaintiff's legal advisers would have had to
take into account. The preceding chapter considers a range of issues relevant
to the adequacy of the Commonwealth's offer. Apart from the question of
legal aid, these included:
- the contentious legal issue of whether the relevant kind of nervous
shock is actually compensable, having regard to the alleged policy of
the courts to limit the categories of situations in which nervous shock
damages can be claimed;
- whether a judgement for damages for nervous shock will prevent a plaintiff
who later contracts CJD from pursuing litigation for common law damages
for physical injury; and
- the likely size of an award of damages for nervous shock.
6.95 LAFS, which administered the relevant legal aid schemes, and the
AGS, which acted for the defendants, both form part of the Attorney-General's
Department. The impression this creates is unfortunate. It encourages
a perception, if not the reality, of partiality. This should not be taken
to suggest that the Committee has come to the view that officers within
that Department acted improperly.
6.96 The Committee also received evidence from LAFS itself that Rennick
Briggs had advised the Attorney-General's Department that `they would
prefer it if the Department did not contact the Department of Human Services
and Health about their submission' under the Special Circumstances Scheme.[58]
6.97 It also appears from LAFS' submission that, between August and October
1995, the AttorneyGeneral's Department had in fact consulted the Department
of Human Services and Health about the prior application under the Public
Interest and Test Cases Scheme.[59]
The Health Department provided LAFS with information about the Allars
Inquiry, levels of expenditure concerning hormone recipients, and 'the
limited extent of medical problems and concerns that had arisen out of
the hormone treatment problem'.[60]
6.98 This contact between LAFS and the Health Department may well have
added to an apprehension among litigants that LAFS, being under Government
direction, might not act wholly dispassionately in determining whether
legal aid should be granted. On the other hand, there is an argument that
LAFS was justified in seeking information about the case from the Health
Department which had institutional knowledge of the issues and background.
6.99 It may also be suggested that the real difficulty is that LAFS,
the AGS and the Health Department are all under Government control.
Recommendations
Recommendation 10: The Committee recommends that the current eligibility
guidelines for the provision of legal aid be revised to ensure that cases,
particularly test cases, involving issues of public interest such as those
raised in APQ's case be eligible to receive legal aid assistance in the
future.
Recommendation 11: The Committee recommends that, in future, the determination
of legal aid applications should be made in accordance with the guidelines
operating at the time the application was submitted. Thus, any variations
to eligibility criteria would only apply to applications submitted after
such variations had been introduced.
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Footnotes
[1] Submission No.11, p.3 (Rennick
Briggs).
[2] Transcript of Evidence,
12.8.97, p.61.
[3] Transcript of Evidence,
12.8.97, p.61.
[4] Rennick Briggs, supplementary
information, 13.8.97, Attachment 5-Letter from Rennick Briggs to clients,
4.4.97, pp. 2-3.
[5] Rennick Briggs, supplementary
information, 11.8.97, p.5 and 13.8.97, Attachment 5-Letter from Rennick
Briggs to clients, 4.4.97, pp.2-3.
[6] Rennick Briggs, supplementary
information, 13.8.97, Attachment 5-Letter from Rennick Briggs to clients,
4.4.97, p.4.
[7] Submission No.11, p.3 (Rennick
Briggs).
[8] Submission No.43, p.4.
[9] Submission No.27, p.5.
[10] For example Submission No.71,
p.2.
[11] Rennick Briggs, supplementary
information, 22.8.97, Attachment I.
[12] Submission No.74, ToR 1(d),
(LAFS).
[13] Submission No.74, ToR 1(d),
p.2 and Attachment B-Guidelines for the provision of legal or financial
assistance by the commonwealth other than under the Industrial Relations
Act.
[14] Submission No.74, ToR 1(d),
p.8 (LAFS).
[15] Submission No.74, ToR 1(d),
p.6 (LAFS). Copy of letter is in Rennick Briggs, supplementary information,
22.8.97, Attachment 2.
[16] Rennick Briggs, supplementary
information, 22.8.97, Attachment 3.
[17] Submission No.74, ToR 1(d),
p.6 (LAFS) and Transcript of Evidence, 13.8.97, pp.165-167.
[18] Submission No.74, ToR 1(d),
p.8 (LAFS).
[19] Submission No.74, ToR 1(d),
p.9 (LAFS).
[20] Transcript of Evidence,
13.8.97, p.167.
[21] Rennick Briggs, supplementary
information, 22.8.97, Attachment 4.
[22] Submission No.74, ToR 1(d),
p.4 and Attachment E-Special Circumstances Scheme Guidelines
[23] Submission No.74, ToR 1(d),
p.14 (LAFS); and Rennick Briggs, supplementary information, 22.8.97, Attachments
5 and 6.
[24] Submission No.74, ToR 1(d),
p.6 (LAFS).
[25] Submission No.74, ToR 1(d),
p.14 (LAFS); and Rennick Briggs, supplementary information, 22.8.97, Attachment
7-Letter from LAFS to Rennicks, 26.10.95.
[26] Submission No.74, ToR 1(d),
p.15 (LAFS).
[27] Submission No.74, ToR 1(d),
p.14 (LAFS).
[28] Rennick Briggs, supplementary
information, 22.8.97, Attachment 9.
[29] Submission No.74, ToR 1(d),
p.4 (LAFS).
[30] Submission No.74, ToR 1(d),
pp.4-5 (LAFS).
[31] Submission No.74, ToR 1(d),
p.15 (LAFS).
[32] Rennick Briggs, supplementary
information, 22.8.97, Attachment 10.
[33] Rennick Briggs, supplementary
information, 22.8.97, Attachment 22-Letter from LAFS to DHFS, 9.9.96.
[34] Submission No.11, p.6 (Rennick
Briggs) and supplementary information, 22.8.97, Attachment 12.
[35] Submission No.11, Attachment
4-Letter from LAFS to Rennicks, 4.10.96 (Rennick Briggs).
[36] Submission No.74, ToR 1(d),
p.3 and Attachment C-Guidelines for the provision of assistance by the
Commonwealth for legal and related expenses under the Cases of National
Importance Scheme, January 1996 (LAFS).
[37] Submission No.74, ToR 1(d),
p.3 (LAFS).
[38] Submission No.74, ToR 1(d),
pp.9-10 (LAFS); and Rennick Briggs, supplementary information, 22.8.97,
Attachments 2, 4 and 8.
[39] Submission No.74, ToR 1(d),
p.10 and Attachment C, p.4 (LAFS).
[40] Transcript of Evidence,
13.8.97, p.170.
[41] Submission No.74, ToR 1(d),
pp.6 and 10 (LAFS).
[42] Submission No.74, ToR 1(d),
p.3 and Attachment D- Guidelines for the provision of assistance by the
Commonwealth for legal and related expenses under the Commonwealth Public
Interest and Test Cases Scheme, August 1996 (LAFS).
[43] Submission No.11, p.2 (Rennick
Briggs).
[44] Submission No.74, ToR 1(d),
p.11 (LAFS).
[45] Submission No.74, ToR 1(d),
p.11 (LAFS); and Rennick Briggs, supplementary information, 22.8.97, Attachment
19.
[46] Submission No.11, p.4 and
Attachment 3 (Rennick Briggs).
[47] Submission No.74, ToR 1(d),
p.7 (LAFS).
[48] Submission No.11, Attachment
5 (Rennick Briggs).
[49] Submission No.11, Attachment
5, p.2 (Rennick Briggs).
[50] Submission No.74, ToR 1(d),
p.8 (LAFS).
[51] Submission No.11, Attachment
5, p.2 (Rennick Briggs).
[52] Submission No.11, Attachment
3 (Rennick Briggs).
[53] Submission No.11, Attachment
4 (Rennick Briggs).
[54] Submission No.11, Attachment
5 (Rennick Briggs).
[55] Rennick Briggs, supplementary
information, 22.8.97, p.6.
[56] Sean Millard, `Lack of legal
aid discourages advances in negligence justice', Plaintiff, Issue
20, April 1997, p.20.
[57] See Submission No.74, ToR
1(c), p.3 (AGS).
[58] Submission No.74, ToR 1(d),
p.14 (LAFS).
[59] Submission No.74, ToR 1(d),
pp.6 and 8-9 (LAFS).
[60] Submission No.74, ToR 1(d),
p.9 (LAFS).