Chapter 4
The Cost of Delivering Justice
4.1
Term of reference (c) addresses the cost of delivering justice. In
general, submissions and evidence adopted a litigant's perspective of costs or
a lawyer's perspective of legal aid remuneration scales. This chapter discusses
the following topics examined by the committee:
-
the Commonwealth's annual court costs;
-
the cost of disbursements;
-
exposure to adverse costs orders; and
-
the cost of legal representation.
The Commonwealth's annual court costs
4.2
The Attorney-General's Department (department) estimated that the total
cost of the federal court system would be $314,047,542.86 for the financial
year ending 30 June 2009:
Table 4.1 – Federal court system costs: 2008-09
Item |
Amount |
Total Court Appropriations
2008-09 |
$291,140,000.00 |
Cost of Pensions (as at 20
April 2009) |
$19,301,542.86 |
Appropriation for High
Court Remuneration & Allowances |
$3,050,000.00 |
Additional Funding to
Family Court of Western Australia |
$556,000.00 |
Total |
$314,047,542.86 |
Source: Attorney-General's
Department, Submission 54, p. 3.
(Note: This sum did not
include one-off additional funding for the Family Court of Western Australia to
appoint an acting family law magistrate and associated support staff for 12
months).
4.3
According to the 2009‑10 Budget, this cost will increase to $355.828
million in the current financial year, an increase of approximately 22 per cent.[1]
4.4
The committee notes that some federal courts have recently considered,
or are considering, costs savings measures.
4.5
The Federal Court of Australia (Federal Court), for example,
investigated a new model for the provision of Federal Court services, whereby
all small registries would report to the Deputy Registrar of a larger 'parent'
registry.[2]
4.6
At the Canberra hearing, the Law Society of Tasmania opposed such a move
both on principle and due to the potential reduction in court users' ability to
access the judicial system:
The Tasmanian District Registry ought to have a resident,
legally qualified registrar. Leading from that, to say that the level of
service of the court will not be adversely affected if there is not a registrar
present and on the ground on a full-time basis is, quite frankly, illogical.
The submission that we have made is that the service as it stood at the time of
the submission to this committee was able to provide a timely, convenient and
personal service.[3]
4.7
Tasmanian senators, the Hon. Eric Abetz, Guy Barnett and Bob Brown,
together with Tasmanian member, the Hon. Duncan Kerr SC have also profiled the
issue since the proposal was first raised, illustrating the importance of this
matter for the people of Tasmania and the lack of clarity concerning the
proposal.[4]
4.8
In evidence, the Law Society of Tasmania acknowledged that these concerns
would be moot if Parliament were to pass the Senate's Access to Justice (Civil
Litigation Reforms) Amendment Bill 2009, Amendment 5937 Revised 2.[5]
However, the Australian Government elected instead to propose its own
amendment, that:
The Registrar must ensure that at least one Registry in each
State is staffed appropriately to discharge the functions of a District
Registry, with the staff to include a District Registrar in that State.[6]
4.9
The Attorney‑General, the Hon. Robert McClelland MP told the
Parliament that this amendment would ensure that each state/territory would
have an appropriately staffed federal registry while maintaining the
flexibility of the court to manage its affairs. The government amendment passed
both houses of parliament and is currently awaiting Royal Assent.[7]
4.10
The committee nonetheless considers that each state and territory should
be permanently staffed by a locally‑based and legally trained Registrar,
and accordingly, makes the following recommendation.
Recommendation 11
4.11
The committee recommends that each state and territory registry of the
Federal Court of Australia be permanently staffed by a locally‑based and
legally trained registrar.
4.12
The cost of delivering justice is not however limited to the annual
costs of the federal court system.[8]
There are also the annual costs of the state/territory court systems, as well
as financial and non‑financial costs to court users. Due to the evidence
received by the committee, this chapter focuses solely on the financial costs,
beginning with the cost of disbursements.
The cost of disbursements
4.13
The Public Interest Law Clearing House (PILCH) provided the following
summary of how litigation costs, including the cost of disbursements affects
access to justice:
The cost of delivering and achieving justice is becoming
increasingly high and beyond the reach of many sections of the community,
particularly disadvantaged and marginalised individuals and groups. For many,
litigation costs are so prohibitive that they act as a barrier to accessing the
legal system and to having disputes resolved and rights upheld. These costs
include: the cost of legal representation; the costs of disbursements,
including court fees; and the [sic] exposure to adverse costs orders.[9]
4.14
The committee heard that the cost of disbursements is already high, increasing
and effectively preventing people from accessing justice. This argument was
especially raised in relation to pro bono matters.
4.15
DLA Phillips Fox, for example, submitted that a lack of disbursement
funding acts as a substantial barrier to justice as few pro bono clients or pro
bono law firms have the capacity to pay these expenses.[10]
Consequently, pro bono clients and pro bono lawyers might be loathe to commence
or continue proceedings, thereby denying these clients access to justice.
4.16
The committee considers that this barrier to access to justice can be easily
eliminated, and in such a way as to assist the private legal profession to
undertake pro bono work. The committee proposes the creation of a disbursements
fund for pro bono matters which is accessible to all law firms and/or legal
practitioners who provide in excess of 10 hours per legal matter. In setting
this threshold, the committee notes that the fund should be most accessible to
pro bono matters undertaken in rural, regional and remote (RRR) areas.
Recommendation 12
4.17
The committee recommends that the federal, state and territory
governments create and fund a specific disbursement fund for pro bono matters, with
eligibility criteria designed to promote the provision of pro bono legal
services by the private legal profession.
4.18
In relation to continued proceedings, some submissions focussed on the
position of people involved in but unable to extricate themselves from the proceedings.
Russo Lawyers cited the example of criminal matters in which psychological and/or
psychiatric reports are required but unaffordable, and without which
inappropriate sentencing occurs.[11]
Assistance with the cost of
disbursements
4.19
In some jurisdictions, various schemes assist litigants with civil law
disbursement costs. Each scheme has its own terms and conditions, leading submissions
to remark on their 'unattractiveness' due to:
-
the limited availability of funding;
-
the requirement to apply only after the disbursement cost has
been incurred;
-
the application of fees, means and merits tests; and
-
the limitation of assistance to cases likely to recover damages.[12]
4.20
By way of example, Law Aid, the Victorian disbursement scheme, applies
the last mentioned criterion, which stymies applications for disbursement relief
in public interest litigation where test case outcomes are largely uncertain.[13]
4.21
PILCH submitted that disbursement funding should be available nationwide
in all areas of law,[14]
and DLA Phillips Fox suggested that disbursement funding in RRR matters would
greatly encourage the provision of pro bono services in those high need areas:
There is a high level of willingness in the legal profession
to deliver services to isolated communities, but this capacity is constrained
by the high costs associated with the deployment of resources...If a fund for
disbursements in pro bono matters was [sic] introduced, it could be used to divert
pro bono capacity to areas where high levels of legal need have been identified.
This could be achieved by restricting availability of disbursement funding to
specific types of matters, classes of clients, or clients' geographic location.[15]
4.22
The committee considers that more should be done to contain the cost of disbursements
and increase access to justice for the Australian community. In this regard,
the committee supports the establishment of a disbursement fund with uniform
criteria, and which eases the cost of justice for disadvantaged Australians.
Recommendation 13
4.23
The committee recommends that the federal, state and territory
governments develop and implement uniform general disbursement funds throughout
Australia to be accessed according to defined criteria with a view to easing
the cost of justice for disadvantaged Australians.
Exposure to adverse costs orders
4.24
In Australia, legal costs are usually concerned with solicitor/client
costs (the fees which a client pays for his/her solicitor's services) and
party/party costs (the amount an unsuccessful litigant is required to pay
his/her opponent to cover their solicitor/client costs).
Civil law proceedings
4.25
In civil law proceedings, the general rule is that costs follow the
event, meaning that a successful litigant can expect a party/party costs order in
his/her favour. In general, submissions focussed upon such orders, arguing that
the risk of an adverse costs order dissuades potential litigants from engaging
with the justice system, thereby affecting their and others' access to justice.
4.26
Gilbert & Tobin illustrated the problem with reference to
discrimination matters which originate in a 'no costs' forum but proceed to the
Federal Court of Australia (FCA) and Federal Magistrates Court (FMC) costs
jurisdictions. At that time, clients do not pursue proceedings but seek
alternative and less costly settlement options:
We have pursued a number of discrimination matters to
conciliation level against the same few respondents in respect of the same or
very similar issues. Resources are often wasted obtaining outcomes for
individuals, or even small groups, in each case that discrimination arises if
the parties are forced to accept a conciliated outcome rather than a precedent
setting Court determination for fear of suffering an adverse costs order.[16]
4.27
An alternate view posed by the Law Council of Australia (Law Council)
focussed on costs incurred by the courts and expenditure of their limited
resources. It opposed the notion of charging litigants court fees which reflect
the true cost of running and administering the court, warning that a 'user
pays' approach is 'philosophically problematic' and inhibits access to justice:
If a cost recovery system were introduced there would also
need to be stringent concessions and exemptions applied to ensure that only
large litigators were targeted by the scheme, and that the increased fees did
not inhibit individuals and corporations from accessing the justice system.[17]
4.28
The committee acknowledges that the risk of an adverse costs order cost
can affect the conduct of litigation, and notes that the Standing Committee of
Attorneys‑General (SCAG) is currently exploring options for targeted
costs recovery in civil law proceedings with particular reference to mega‑litigation.[18]
Public interest litigation
4.29
For public interest matters, legal costs are a significant deterrent to
litigation, particularly party/party costs and the risk of an adverse costs
order in civil law proceedings. In many cases, public interest litigants are
required to demonstrate at the outset that they will be able to pay the other
party's costs if they are not successful in the proceedings (security for
costs).[19]
4.30
According to PILCH, nine times out of ten the risk of an adverse costs
order results in meritorious public interest matters not being pursued:
This is especially the case where the matter involves an
unresolved area of law, in the nature of a test case, such that legal advisors
are not able to advise with any degree of certainty the likely outcome of the
litigation. Such uncertainty increases the risk of an adverse costs order and
therefore reduces the likelihood that a disadvantaged or marginalised applicant
will pursue the important test case.[20]
4.31
In general, submissions expressed the view that public interest
litigants with meritorious claims should be relieved of the risk of an adverse
costs order and/or security for costs orders.[21]
4.32
DLA Phillips Fox, for example, suggested that the general rule in
relation to costs should be altered by providing an exemption for public
interest litigants:
It would be more appropriate to implement a policy in which
costs are not ordered against unsuccessful public interest litigants than make
these decision on a case by case basis. Litigants ought to be able to secure
declaration as to the public interest nature of the matter, and the protective
cost consequences early in any proceedings, and before the other party to the
proceeding has incurred substantial costs.[22]
4.33
Some Australian courts already have provision for the type of protective
costs orders advocated by DLA Phillips Fox. However, the power is generic and
discretionary, for example, subsection 43(2) of the Federal Court of
Australia Act 1976 which grants the FCA the power to award costs.
4.34
In 2001, the Full Court of the FCA considered pro bono legal representation
as a relevant factor in the making of a costs order, but affirmed that there is
no general principle that public interest litigation should not attract the usual
costs orders.[23]
This decision was upheld by the High Court of Australia in the 2001 Tampa
litigation.[24]
4.35
While protective costs orders are not common, and there is a paucity of
relevant case law, the committee does not consider that there is any need for
clarification of the legislation.[25]
The committee is confident that the current provisions for
determining each matter on a case by case basis function adequately, and there
is no need to guide or fetter the court's discretion.
Indemnity principle
4.36
At present, the nature of costs as an indemnity means that if a
successful pro bono practitioner is awarded costs, and the other party
challenges that award, the unsuccessful party might succeed because there is
nothing to indemnify.
4.37
PILCH suggested that the indemnity principle be abrogated to allow
parties to recover their costs in successful pro bono matters.[26]
Although this would also require state/territory support, the committee
considers that such a move would encourage private legal practitioners
to provide pro bono legal services, thus increasing access to justice.
Recommendation 14
4.38
The committee recommends that the federal, state and territory
governments enact legislation to abrogate the indemnity principle, to the
extent necessary, to ensure that litigation costs can be awarded and recovered
in pro bono matters.
The cost of legal representation
Private legal representation
4.39
Chapter 2 identified the cost of legal representation as one factor
affecting people's ability to access justice. This difficulty arises at the
outset as in most cases lawyers require their clients to deposit adequate funds
into their trust account or provide evidence of financial means prior to the
commencement of a matter. A client unable to meet either requirement is not
likely to secure legal representation.
4.40
There may be some situations where a lawyer will agree to a contingency
fee arrangement (where billing is deferred until conclusion of a matter), but
this option is increasingly not available.[27]
4.41
For clients who secure legal representation, the cost of that
representation continues throughout the life of a matter. In some cases,
particularly those involving litigation, this cost can be substantial. In evidence,
the FCA expressed anxiety about the amounts paid to legal representatives in
family law proceedings:
In many cases there is no proportionality, unfortunately, or
little proportionality between what people are fighting over and the costs they
are paying.[28]
4.42
His Honour Chief Federal Magistrate John Pascoe concurred, adding that
there are additional costs involved in family law (or other) litigation:
One of the difficulties people often raise is taking time off
work and the difficulties of dealing with children during court proceedings. We
often start early, for example, at nine o’clock, or try and facilitate people
being able to deal with other aspects of their lives. There are costs at a
whole range of levels.[29]
4.43
In its submission, Gilbert & Tobin remarked on the number of
meritorious claims abandoned due to clients being unable to afford or continue
to afford legal representation, for example, matters involving property
settlements:
Our experience has been that there is a significant demand
for assistance amongst people whose property is limited. The value of their
property would not warrant the payment of legal fees either upfront or on a
contingency or delayed fee basis. These are generally the most financially
vulnerable of clients so to lose the little that would be entitled to them
impacts more than it might in other socio‑economic brackets.[30]
4.44
For many Australians, the cost of private legal representation inhibits
their ability to obtain justice, hence the raison d'être of the publicly
funded legal aid sector. However, submissions and evidence revealed, and not
for the first time, that the sector has limited ability to bridge the legal
needs gap.
4.45
Under this term of reference (d), the committee received evidence
directed toward the legal profession's cost of delivering justice under the
Legal Aid Program (LAP).
The private legal profession's
participation in legal aid work
4.46
In late 2006, the department published results of its Study of the
Participation of Private Legal Practitioners in the Provision of Legal Aid
Services in Australia (TNS study), a study whose primary purpose was to
understand current and future trends in the supply and composition of the
private labour market for legal aid.[31]
4.47
Figure 4.1 below shows that, in 2006: 48 per cent of family and criminal
law firms undertook legal aid work in those areas; 33 per cent used to undertake
referrals from LACs but no longer do; and 19 per cent have never participated
in the legal aid system.
Figure 4.1 – Supply of legal aid by the private profession
![Chart of the supply of legal aid by the private profession](/~/media/wopapub/senate/committee/legcon_ctte/completed_inquiries/2008_10/access_to_justice/report/c04_1_gif.ashx)
Source: TNS Social Research, Study of the
Participation of Private Legal Practitioners in the Provision of Legal Aid
Services in Australia, December 2006, p. 13.
4.48
In RRR areas, the TNS Study found: 65 per cent of regional and remote
law firms assisted LACs with the provision of legal services; a further 26 per
cent used to but no longer did so; and eight per cent have never undertaken
legal aid work.
Figure 4.2 – Supply of legal aid by the private profession in regional and
remote areas
![Chart of the supply of legal aid by the private profession in regional and remote areas](/~/media/wopapub/senate/committee/legcon_ctte/completed_inquiries/2008_10/access_to_justice/report/c04_2_gif.ashx)
Source: TNS Social Research, Study of the Participation
of Private Legal Practitioners in the Provision of Legal Aid Services in
Australia, December 2006, p. 40.
4.49
The TNS Study remarked upon a strong sense of moral obligation as the
key motivator for the private legal profession's acceptance of LAC work.
However, the study also commented on law firms' disengagement with the legal
aid system:
Remuneration matters including the low hourly rate, and
issues with the number of hours allocated under the stage of matter payment
structure were the key reasons for disengagement from legal aid among all
firms. Red tape associated with processing a grant of legal aid was also seen
as a key reason for disengagement. This was particularly evident among firms
that used to provide legal aid but now do not.[32]
4.50
The TNS Study revealed that approximately one in three family and/or
criminal law firms have moved away from the provision of legal aid (33 per cent).
In RRR areas the proportion was one in four family and/or criminal law firms.
However, the relative shortage of legal practitioners in RRR areas (three per 10
000 residents), as compared with legal practitioners in capital cities (10.7
per 10 000 residents) suggests that:
Providers of legal aid in regional and remote areas are
‘keeping the system going’ with a small number of lawyers providing significant
amounts of legal aid.[33]
4.51
The TNS Study found that while most law firms currently undertaking legal
aid work were likely to continue with their current pattern of provision, if nothing
were done in terms of making legal aid more attractive to private legal practitioners,
these firms' revenues would decrease in the next five years, and this would
have a 'deleterious' impact, particularly in RRR areas.[34]
Legal aid remuneration scales
4.52
The Australian Legal Aid Office was created in 1974, at which time it
paid 100 per cent of normal fees on matters referred to private practitioners.
Two years later, it paid 90 per cent of scale fees, and in 1978, after Legal
Aid Commissions (LACs) were established, the LACs paid 80 per cent of scale
fees.
4.53
In the early 1980s, Part V of the Family Law Regulations 1984
instituted a legal aid scale, and each LAC then paid fees in accordance with that
specific scale. The regulations did not provide for indexation or inflation,
and over time, the scale fees fell well below the 80 per cent of scale fees
previously paid by LACs.
4.54
In the early 1990s, LACs were given power to negotiate their own scales.
However, no commission was able to make up for the loss of value caused by the
omission of an inflator during the 1980s, and the eventual provision of an
inflator saw a (further) reduction in the real value of LAC funding.
4.55
As discussed in Chapter 3, from 1 July 1997 the Australian Government introduced
major changes to legal aid funding. This led to an immediate reduction in
actual expenditure of over $33 million each year for the following three years,
and a real reduction in long‑term funding. In 2003‑04, for example,
the Commonwealth’s contribution to legal aid funding was $130 million, compared
to its contribution of $159 million in 1996‑97.[35]
4.56
In addition to reduced scale fees, legal aid fees are subject to lump
sum 'stage of matter' funding and capping. According to submissions, this has
created a problem in that the fees paid to private practitioners who accept
referrals from LACs are neither competitive nor attractive.
4.57
The Law Council reported that the cost per solicitor chargeable hour varies
across firms: approximately $140 per hour in a major regional city;
approximately $153 per hour in a suburban practice; and approximately $132 per
hour in a remote country region. At the same time, legal assistance rates are
below $130 per hour, commonly ranging from $88 to $105 per hour. On average, regional,
suburban and country law firms do not therefore recover the true cost of
employing a practitioner to undertake legal aid. The Law Council concluded
that:
Legal aid is a losing proposition even if the solicitor doing
the work is paid a very low salary. As a result “juniorisation” occurs of those
private practitioners who undertake legal work. Law firms cannot afford to have
their high charging fee earners undertaking significant volumes of legal aid
work. The opportunity costs of undertaking legal aid work as against a lower
volume of higher paid work means that it makes little sense for experienced
practitioners to decline full fee‑paying clients in favour of legal aid
clients.[36]
4.58
The Law Institute of Victoria (LIV) told the committee that the current
levels of criminal law (and family law) legal aid funding in Victoria are 'vastly
inadequate and undermines citizens’ access to justice'.[37]
In 2008, the LIV surveyed criminal law practices in Victoria to determine an
average private rate for a range of different types of criminal matters.
4.59
Table 4.2 below shows, inclusive of GST, the average fee charged to
private clients in various criminal matters, compared with Victoria Legal Aid’s
payment for the same matter. Victoria Legal Aid's fees are less than 50 per
cent of average private fees, well short of the 80 per cent figure that was traditionally
considered a fair proportion.[38]
Table 4.2 – Private legal fees and legal assistance fees in criminal law
matters (Victoria)
Matter type |
VLA rate payable |
Range of fees (private
client) |
VLA rate as a percent of
the range of private fees |
Average fees for private client |
VLA rate as a percentage of
average private fees |
80% of average private fees |
Magistrates' Court plea |
$602 |
$110-$3850 |
16-54% |
$2370 |
25% |
$1896 |
Magistrates' Court contest |
$721 |
$2000-$8450 |
9-36% |
$3884 |
18% |
$3107 |
Bail application
(Magistrates Court) |
$444 |
$1100-$4400 |
10-40% |
$2821 |
15% |
$2256 |
Committal – 1 day –
solicitor/client costs only |
$914 |
$2000-$9350 |
10-45% |
$4600 |
20% |
$3680 |
County Court plea |
$2720 |
$3000-$10756 |
25-91% |
$6145 |
44% |
$4916 |
County Court – 5 day trial
– solicitor/client costs only |
$5077 |
$6500-$19500 |
26-78% |
$11290 |
45% |
$9032 |
Source: Law Institute of
Victoria, Submission 11, p. 4.
4.60
The LIV highlighted the critical role of private practitioners in the
legal aid system, stating that Victoria Legal Aid's in‑house criminal
lawyers would otherwise not be able to meet existing demand for criminal law
casework:
Without the services of private practitioners the legal aid
system would collapse, and yet legal aid fees have declined in real terms over
recent years and have not kept pace with the increase in the complexity and
seriousness of legally aided matters being conducted by private practitioners.[39]
4.61
In 2008, the Victorian Bar Association also examined the fees paid to
criminal law barristers in Victoria. The Review of Fees Paid by Victoria
Legal Aid to Barristers in Criminal Cases report found that Victoria Legal
Aid fee increases have failed to keep pace with both:
-
the primary measure of inflation, the Consumer Price Index; and
-
the more specific cost index established by tracking the increases
in expenses that barristers face in running their practices.[40]
Table 4.3 – Victoria Legal Aid fees paid to criminal barristers
Court jurisdiction |
Period |
Change in VLA fees |
Change in CPI |
Change in barristers' costs |
Magistrates |
1993-2007 |
16% |
44% |
56% |
County |
1993-2007 |
22% |
44% |
56% |
Supreme |
1993-2007 |
31% |
44% |
56% |
Source: PricewaterhouseCoopers, Review of Fees Paid by
Victoria Legal Aid to Barristers in Criminal Cases, April 2008, p. 2.
4.62
The report concluded that the income received by barristers handling Victoria
Legal Aid cases declined in real terms from 1993 and by as much as 20-32 per
cent, while the income of other legal professionals has increased 15 per cent
during the same period.
Table 4.4 – Comparison of legal professionals' income: 2008
Career level |
VLA criminal barrister |
Public prosecutor |
Solicitors at law firm |
In‑house counsel |
Junior |
$36,383 |
$87,200 |
$85,000 |
$97,500 |
Mid‑career |
$91,478 |
$196,200 |
$177,500 |
$197,500 |
Senior |
$110,241 |
$287,021 |
$210,000 |
$325,000 |
Source: PricewaterhouseCoopers, Review of Fees Paid by
Victoria Legal Aid to Barristers in Criminal Cases, April 2008, p. 3.
4.63
As indicated in Chapters 3, 7 and 8, lawyers employed by legal aid service
providers earn substantially less than they would in private employment. According
to the Victorian Bar Council, this emphasises the remuneration disparity
experienced by criminal law barristers undertaking Victoria Legal Aid work:
We would expect, that those VLA lawyers being paid between
47½ thousand dollars and $103,000 are themselves working in the legal community
for significantly lower remuneration than the general set of solicitors
undertaking similar work...barristers working in that area are getting paid even
less than the VLA salaried persons...the VLA salaried [persons]...are also getting
superannuation, leave loadings, sick leave and things of that nature.[41]
4.64
The Review of Fees Paid by Victoria Legal Aid to Barristers in
Criminal Cases report notes that some barristers can cross‑subsidise
their income with private or civil work, but ultimately, this means that they
are bearing the cost of providing a public good, a position which is
unsustainable:
Barristers, as rational economic actors cannot be expected to
continue this practice and will eventually preference away from the lower paid
work.[42]
4.65
The Victorian Bar Council added that, effectively, there is a
substantial amount of pro bono work being undertaken in the criminal practice
area (and no doubt other areas of law).[43]
4.66
The Law Council advised that, in Victoria, the number of junior
barristers who practise 90 per cent or more criminal work (more than 50 per
cent of which is legal aid work) has declined by 59 per cent over the last
three years and 26 per cent for criminal barristers overall in the same period.
4.67
The Law Council cautioned that, 'to maintain the viability of a fair
justice system, it is essential that the under‑funding of legal aid
barristers be addressed',[44]
and the LIV concurred with particular reference to criminal law barristers in
Victoria:
The withdrawal of criminal lawyers from legally aided matters
will have a grave impact on Victorians’ access to justice. It will lead to a
situation where there are two tiers of defendants – those able to access
quality, experienced representation by funding their own matters and those who
receive limited legal aid or are left to represent themselves.
It is anticipated that inadequate legal aid funding will have
negative consequences for the courts as more mistakes will be made by
inexperienced practitioners because senior criminal lawyers are increasingly
withdrawing from legally aided work. Cases before the courts will be subject to
increased delay and there is a greater possibility that errors will be made
that will give rise to more appeals.[45]
4.68
The Victorian Bar Council added:
The economic benefits when one looks at the very substantial
cost of running this component of the administration of justice bring about a
situation where it is cost effective to properly fund legal aid to prevent the
sorts of additional costs in the overall administration of justice that we have
referred to.[46]
4.69
National Legal Aid (NLA) is aware of the debate regarding legal aid
remuneration fees, but told the committee that the Australian Government contributed
to the problem:
A few years ago Attorney‑General Ruddock instituted a
process whereby, on the Commonwealth side of legal aid funding, there was a
floor of $120 an hour. In other words, there was no‑one in legal aid in
Australia paying fees that were less than $120 an hour, or the fee was
calculated on the basis of $120 an hour...It depends on whether the commission
has a policy of maintaining the same level of fee no matter the work, which some
commissions do, or having different fees for different areas of work, which
some commissions do. What you find as a consequence of that is that, for
example, in some parts of the country the fees for criminal work, because they
are supported by state funds, are lower than the fees for family law work,
because those are supported by Commonwealth funds and subject to Commonwealth
insistence that there should be a floor on the level of the fee.[47]
Modernising the legal aid
remuneration scales
4.70
In response to the findings of the Study of the Participation of
Private Legal Practitioners in the Provision of Legal Aid Services in Australia
report, the department reviewed remuneration arrangements for private practitioners
providing family law legal aid services. The review found that:
-
remuneration must be increased to ensure the sustainability of
the legal aid system;
-
high volume providers are struggling to maintain sustainable
legal practices with the fees received from legally aided matters; and
-
high volume providers would agree to an increase in fees to $190
- $200 (GST inclusive) to match court scales.[48]
4.71
The Law Council informed the committee that these findings are
consistent with similar studies conducted by the private legal profession, the department,
legal aid service providers, and other interested stakeholders.
4.72
The Law Council affirmed that private practitioners are prepared to
undertake publicly funded legal aid work for less remuneration than would be
payable by a private client.[49]
However, submissions and evidence from the legal profession asserted that:
Practitioners should be paid fairly for the work they do to
facilitate access to quality legal representation.[50]
4.73
The Law Council urged that funds be injected into the legal aid system
to enable LACs to fully implement their charter, including a component for
increased legal aid fees, predicting that an injection will:
-
encourage private practitioners to undertake legal aid work;
-
encourage experienced practitioners to resume legal aid work;
-
reduce the number of self‑represented litigants; and
-
optimize the delivery of legal aid to the Australian community.[51]
4.74
In its submission, NLA acknowledged private practitioners' important
role in the delivery of legal aid, particularly in RRR areas and where conflicts
of interest prevent LACs from handling matters in‑house. NLA endorsed calls
for an increase in both legal aid funding and legal aid fees:
Those private practitioners who are prepared to do legal aid
work are remunerated at levels well below the market rate. NLA policy is that
fees paid to private practitioners currently prepared to work at reduced rates
should be increased so as to retain those practitioners in the legal aid market
place. Even if fees across the country moved over the next few years to a
minimum of $165 per hour, the above would still be correct. At present Commissions
do not have the funds to provide this increase and do not believe that fees
should be increased to private practitioners at the expense of the number of
grants of aid that can be made available.[52]
4.75
The committee acknowledges the variety of fee scales which have
developed nationwide as a result of funding policies, and is concerned that, in
some instances, these scales are so low as to discourage private legal
practitioners from accepting LAC referrals. Private legal practitioners are a
vital component of the legal aid system, assisting publicly funded legal aid
service providers to provide access to justice to disadvantaged Australians.
Accordingly, the committee makes the following Recommendation 15.
Recommendation 15
4.76
The committee recommends that the federal, state and territory governments,
in conjunction with affected stakeholders, review and modernise existing legal
aid fee scales including an inflator to promote participation of the private
legal profession in legal aid service delivery.
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