Summary and Recommendations
Chapter 1 Events since the Second Report
In 1996, the Commonwealth decided that it would in future fund legal
aid only for matters arising under Commonwealth laws, leaving the states
and territories to fund the provision of legal aid for matters arising
under their laws. With effect from 1 July 1997, new legal aid agreements
commenced between the Commonwealth and the each of the states and territories
which gave effect to this decision.
The agreements deal with the level of Commonwealth funding to be provided
and the priorities and guidelines that determine how the money is to be
spent. The Committee found that a degree of confusion accompanied the
changeover to the new regime.
The Committee notes that it took the Government 14 months to respond
to the single, unanimous, recommendation in the Committee's First Report
and 11 months to respond to the recommendations in its Second Report.
The Committee considers that this delay is unacceptable. The delay is
a very clear indication of the fact that the Attorney-General and the
Government have failed to appreciate the very significant problems that
they have created in the legal aid system.
Chapter 2 Inadequate data on the state of the legal aid system
The Attorney-General's Department publishes a Statistical Yearbook on
legal aid in Australia, but lengthy periods have elapsed between the close
of a year and the publication of the relevant yearbook. The Committee
considers the delay in producing the yearbooks to be unacceptable. Moreover,
the need for some of the more detailed data in the yearbooks was not clear.
More generally, there is inadequate information available on the extent
to which the legal aid system fails to provide legal services to all who
need them (the `unmet need'). The Commonwealth has recognised this deficiency,
but it nonetheless proceeded with its 1 July 1997 changes.
The Committee concludes that the changes made by the Commonwealth to
the legal aid system were based on insufficient information. The way that
they came about displayed more concern to achieve savings than with their
impact on the legal aid system and access to justice. The Committee also
concludes that insufficient steps are being taken by the Commonwealth
to collect, analyse and publish meaningful data on the impact of the changes
to the legal aid system. It considers that, to be meaningful, such data
must include the wider impact of the changes, including the effect on
the operation of the courts, prosecution authorities, and community legal
centres and other providers of free legal services.
The Committee recommends that:
- the Commonwealth continue to be a clearinghouse for, and publisher
of, detailed information on the operation of all aspects of the Australian
legal aid system, not just those parts it directly funds;
- the Commonwealth take steps to collect, analyse and publish more meaningful
data on the impact of the changes on the legal aid system and on the
continuing operation of the system;
- this data be in a standardised form that enables comparisons between
jurisdictions and over time; and
- the Attorney-General's Department examine in consultation with National
Legal Aid and the individual legal aid commissions whether there is
any continuing need for all of the data presently contained in its Statistical
Yearbooks on legal aid in Australia to be collected and published. (Recommendation
1: p. 23)
The Committee notes that there are signs emerging that the Commonwealth,
having decided to fund only Commonwealth matters, is reducing its role
in co-ordinating the legal aid system in Australia.
The Committee recommends that the Commonwealth retain an active
role in promoting co-ordination and cross-fertilisation of innovations
and research among the various legal aid bodies in Australia, notwithstanding
its decision to fund only Commonwealth matters. (Recommendation 2:
p. 24)
Chapter 3 Funding issues
In its Second Report the Committee expressed its basic disagreement
with the Commonwealth Government's decision no longer to accept responsibility
for the funding of any matters arising under state and territory laws.
Nothing that has occurred since then has altered the Committee's view.
The tenor of the evidence received by the Committee was that the Commonwealth
was providing insufficient legal aid funding for Commonwealth matters.
The Committee regards news that a legal aid commission is being forced
into using next year's funds to meet this year's expenses as further evidence
of the inadequate level of funding provided in the agreements.
Another performance measure of how well the legal aid system is performing
is the number of litigants who appear unrepresented before the courts
because funding was lacking to provide them with legal aid. The evidence
suggested that this was occurring to an increased extent, although comprehensive
data is not available.
Accordingly, the Committee recommends that, in order to assist
in measuring how well the legal aid system is operating, the Government
should collect, analyse and publish annual data on unrepresented litigants
appearing in the Family Court, the Federal Court, the state and territory
Supreme Courts and District/County Courts, and the courts hearing appeals
from those courts. (Recommendation 3: p. 30)
Unrepresented litigants often take up considerably more court and court
registry time than those with legal representation. It was frequently
suggested to the Committee that these extra costs were greater than the
cost of providing unrepresented litigants with legal aid. Again, the data
needed to verify this is not available.
Accordingly, the Committee recommends that the Government examineexamine
and report on whether savings made by denying legal aid are outweighed
by the extra costs imposed on the public purse by unrepresented litigants.
(Recommendation 4: p. 36)
Another measure of whether the legal aid system is adequately funded
is whether it can afford the salaries needed to attract competent staff
to provide legal assistance from within the legal aid commissions. In
addition, it has to be able to pay the rates necessary to secure from
the private profession adequate legal representation for legal aid applicants.
The evidence with regard to in-house salaried staff suggested to the
Committee that a competent level of representation is being maintained,
though perhaps not without considerable difficulty. In regard to the payments
to private lawyers, the bulk of the evidence to the Committee suggested
that the competency of representation was likely to suffer seriously unless
payments were increased. Some of the evidence indicated that this was
already happening. The Committee regards this situation as unacceptable.
The Committee recommends that:
- the rates of payment to practitioners be set by the legal aid commissions
at sufficiently high rates to ensure that competent representation continues
to be provided to those receiving legal aid;
- the Commonwealth provide sufficient funding to the commissions to
enable them to do this; and
- greater efforts be made to continuously monitor the quality of representation
provided under legal aid funding. (Recommendation 5: p. 52)
At a time of funding stringency, the new need to account separately for
Commonwealth and state/territory matters and funds has imposed additional
administrative burdens and costs on the legal aid commissions. The Committee
is concerned that the Commonwealth appears to have ignored the impact
of the increased costs, particularly the transitional costs, in deciding
to impose the new legal aid agreements.
Chapter 4 General issues about the Commonwealth's priorities and guidelines
The categories of matters identified by the Commonwealth in the new legal
aid agreements as `priorities' are not arranged in any hierarchy. Concerns
were raised with the Committee that the demands of one category identified
as a priority might starve another category of funds.
The Committee recommends that the Government monitor the expenditure
on the various categories and sub-categories of legal aid matters it funds
under its general legal aid funding to determine if disproportionate expenditure
in one priority area is having the effect of depriving another of appropriate
funding. (Recommendation 6: p. 57)
The Committee notes that, apart from the areas identified as priorities
under the agreements, there are about two dozen special schemes for providing
Commonwealth legal assistance. These stand apart from the mainstream system
of providing legal aid through legal aid commissions. It is not clear
to the Committee to what extent all of these schemes are still justified.
In particular it is not clear whether all the matters in these special
schemes merit receiving what appears to be a special priority or treatment,
compared with the items listed as priorities under the legal aid agreements.
The Committee received evidence that applications for legal aid that
meet all the criteria under the agreements are sometimes refused because
of a lack of Commonwealth funding. There is a lack of data available on
how often this occurs.
The Committee recommends that the data currently collected on
the number of applications for legal aid that are refused be expanded
to show how many are for applications that meet all the criteria and are
refused solely for lack of Commonwealth funds. (Recommendation 7: p.
61)
Applicants for legal aid are subject to a means test. Overwhelmingly,
the criticism of the means test is that it is too stringent. In addition,
there is evidence that variations occur in the means test levels applied
in the various parts of Australia. Some of the variation is apparently
due to differing regional economic factors. However, the variation also
reflects the differing extent to which the legal aid commissions can afford
to raise means test levels in line with inflation.
The Committee recommends that:
- the Government ensure that the means test income and asset levels
are set at the same amounts for all parts of Australia, unless regional
variations can be shown to be justified by differing economic conditions;
- to achieve this, the Government must provide sufficient legal aid
funding to alleviate the position of those legal aid commissions that
impose more stringent means tests due to inadequate funding; and
- the Government should, in the light of the new funding arrangements,
institute a review of the appropriateness of the means test levels that
currently apply. (Recommendation 8: p. 65)
One element of the merits test aims broadly to limit an applicant for
legal aid to the level of resources that an `ordinarily prudent self-funding
litigant' would elect to spend on the matter. The Committee believes that
this fails to recognise that a matter which ana reasonably affluent person
may not consider worth litigating over may be of crucial importance to
a poorer or more disadvantaged person.
The Commonwealth announced in May 1998 that it was having research conducted
into what an ordinarily prudent self-funding litigant spends, compared
to a legally-aided litigant. Theis belated funding of this research shows
indicates acknowledgment that the Commonwealth imposed a test that legal
aid commissions were required to use, without having the necessary information
to adequately explain to them what it means. The Committee sees this as
further evidence that the 1 July 1997 changes were driven by budget needs
rather than any concern for the wellbeing of the legal aid system and
its clients.
Chapter 5 Legal aid in family law matters
As a general rule, applicants for legal aid in family law matters are
required to use primary dispute resolution procedures such as counselling
and conferencing before aid for litigation will be considered. The Commonwealth's
guidelines identify four situations where it would not ordinarily be appropriate
to require this rule to be followed. The Committee received evidence that
language and cultural factors sometimes make primary dispute resolution
procedures inappropriate, although these factors are not explicitly recognised
in any of the four identified situations.
The Committee recommends that criteria setting out when recourse
to a primary dispute resolution service is not appropriate in family law
matters be amended to include situations in which there is no service
available that can accommodate any particular language and cultural barriers
faced by the legal aid applicant. (Recommendation 9: p. 73)
The Government has sharply reduced its commitment to combating domestic
violence by eliminating its funding for legal assistance for actions taken
against it under state/territory laws. The Committee believes that the
distinction between Commonwealth and state/territory matters which has
been imposed by the present Government is not appropriate generally. It
is particularly inappropriate in relation to domestic violence. Adequate
funding of legal assistance for actions taken under state/territory law
against domestic violence is essential because the scope for prompt and
effective action is markedly less available under Commonwealth law.
The Committee recommends that the Government should:
- either provide an adequate level of funding for legal assistance for
actions taken under state/territory law against domestic violence;
- or enhance the remedies available under Commonwealth law against domestic
violence, and then ensure that adequate legal aid funding is provided
to enable victims of domestic violence to access those remedies.
- If it pursues the latter option, it should as an interim measure provide
adequate funding to the states/territories until the new Commonwealth
remedies are operating and legal aid funding is available. (Recommendation
10: p. 79)
Under the new legal aid agreements, caps are imposed on the amount of
legal aid that will be provided to any one litigant. In family law matters,
the amount is $10,000 for parties, and $15,000 for any special representative
that may be appointed to look after the interests of a child.
Evidence to the Committee indicated that caps may bring some benefits
in the form of more efficient expenditure of legal aid funding. But the
evidence also indicated that caps created many problems. Most thought
that the cap levels were too low, and data provided by a study into fee
scales in the Family Court seems to confirm this view.
Arguments were put to the Committee that if caps are to remain there
needs to be a greater discretion to exceed them in exceptional cases.
The Government has to some extent acknowledged this in revisions to the
guidelines to take effect on 1 July 1998. However, given the inadequate
funding, any exercise of the discretion becomes an exercise in robbing
Peter to pay Paul. The applicant in the expensive case may benefit, but
at the expense of other equally meritorious applicants who cannot then
be funded. No amount of juggling with discretions and cap levels will
overcome this sort of dilemma. Only the provision of an adequate level
of funding can do so.
The data is not available to assess with any precision the impact of
caps and the need for changes.
Accordingly, the Committee recommends that the Government should
act to ensure that the necessary data on the operation of the caps in
its legal aid guidelines is collected, analysed, published and acted upon,
so as to ensure that capping does not deny justice in particular cases.
(Recommendation 11: p. 95)
Chapter 6 Legal aid in criminal matters
The Committee believes that the division between Commonwealth and state/territory
criminal matters ignores the policy imperative for the Commonwealth to
provide funding in some types of cases in which the charges are under
state/territory law. At a time when the law enforcement effort against
drugs increasingly demands the putting to one side of jurisdictional boundaries,
it is unacceptable that the Commonwealth has chosen to erect an artificial
jurisdictional distinction for legal aid funding for the resulting major
drug trials.
Prior to the new legal aid agreements the Commonwealth provided a special
fund to assist with the costs of legal aid in very expensive criminal
cases involving Commonwealth matters. Now the Commonwealth expects the
legal aid commissions to meet these costs. By no longer providing the
top-up funding the Commonwealth is in effect squeezing the resources of
the legal aid commissions, forcing them to reduce the use of Commonwealth
funding to other areas, in order to meet the costs of major criminal cases.
The Committee does not regard this as acceptable. In addition, the provisions
made in the legal aid agreements for handling expensive criminal cases
appear to the Committee to be incapable of coping with all situations
that are likely to arise.
Accordingly, the Committee recommends that the Government provide
an additional fund administered by the Attorney-General's Department to
meet the extra costs involved in providing legal aid in exceptionally
expensive criminal cases involving Commonwealth matters. (Recommendation
12: p. 112)
The Committee also notes the significance of a lack of separate representation
for children in cases where it is warranted, and is concerned that there
are cases in which the Family Court believes separate representation is
necessary but which fall outside the guidelines.
Chapter 7 Legal aid in civil law matters
The general thrust of the evidence received by the Committee was that
the availability of legal aid under the new agreements was too restricted.
Funding for virtually all immigration matters has been removed. Criticisms
were made of the restrictions on aid in social security matters, product
liability cases, veterans' matters and discrimination cases.
The Committee considers that the requirement in discrimination cases
that there be a substantial benefit to the public or a section of it before
legal aid will be provided is inappropriate. It fails to recognise that
the community has a definite interest in ensuring that discrimination
does not occur in individual cases. It is essential that legal aid be
available to achieve this.
Accordingly, the Committee recommends that the guideline in relation
to the provision of legal aid in discrimination matters be amended to
remove the condition that there be a substantial benefit to the public
or a section of it in order for aid to be granted. (Recommendation
13: p. 122)
The Committee notes the availability of conditional or contingent fee
arrangements and legal expense insurance as possible means over of overcoming
some of the impacts of the inadequate legal aid funding.
The Committee concludes that legal expense insurance has little to offer
by way of alleviating the scarcity of legal aid funding. It may have some
potential to meet some of the legal needs of those who, due to their means,
fall outside the scope of legal aid, but there appear to be major marketing
difficulties to be overcome before this potential can be realised.
Chapter 8 The changing legal aid community
The Committee has found that legal aid in Australia is provided by a
diverse group of organisations that comprises the wider legal aid community.
The legal aid commissions are an important part of this community but
are by no means the whole of it, with the legal profession, the community
legal centres and a range of specialised advocacy and advice groups also
playing a central role. The Committee examined the roles of each.
The Committee recommends that the Commonwealth implement more
effective arrangements for maximising consultation between the providers
of legal aid in Australia. To this end, it is recommended that the Commonwealth
sponsor the establishment of a National Legal Aid Council, headed by a
Legal Aid Commissioner. This independent permanent body would meet bi-annually
or as required, and would provide advice on legal aid matters at the Commonwealth
and state/territory level. (Recommendation 14: p. 135)
The Committee also recommends the creation of Legal Aid Councils
in each state and territory. Membership of the councils would comprise
representatives of all members of the legal aid community, as well as
community groups and government agencies. Each council would provide a
representative to the national council. (Recommendation 15: p. 135)
The creation of this system would provide a vehicle for communication
between users and providers of legal aid. The Committee believes that
there is no adequate mechanism currently in place and argues that its
existence would offer a low cost means to continually refine the focus
and policies of the legal aid community, as well as a means of sharing
information and ideas reflecting current best practice.
The Committee recommends that legal aid agencies, and legal aid
commissions in particular, review their arrangements for community representation
on their management boards and committees. The Committee believes that
strong consultation with key stakeholders is a sound method of ensuring
the legal aid agencies remain focused on their objectives as social service
providers, and maintain a clearer sense of the nature and extent of community
need for legal aid services. (Recommendation 16: p. 142)
Evidence to the Committee suggested that there have been considerable
inroads into the traditional independence of the legal aid commissions.
Although the Committee recognises the right of the Commonwealth to impose
conditions on the use of Commonwealth funds, and to use funding arrangements
as a lever to achieve management reforms, the Committee stresses the importance
of maintaining the independence of the legal aid commissions. The commissions
must be free from interference in their decision making, be able to be
critical of the Commonwealth, and make unilateral decisions about supporting
challenges against the Commonwealth.
The Committee therefore recommends that the Attorney-General formally
addressesaddress the issue of independence of the legal aid commissions,
and reports on the measures taken to reinforce and guarantee such continued
independence. (Recommendation 17: p. 150)
From the beginning of the 1997-98 year, the Commonwealth no longer permitted
the funding it provided to Environmental Defender's Offices to be used
for conducting litigation seeking to protect the environment. The Committee
recognises that applicants for legal aid are unlike most other legal aid
applicants in that they are generally seeking to bring about the enforcement
of the law in the public interest.
The Committee recommends that the special arrangements preventing
the Environmental Defender's Offices undertaking litigation be revoked.
Commonwealth funding should be availability to provide assistance for
all legal services, including advice and litigation. (Recommendation
18: p. 155)
The Committee believes that the current government has seriously misunderstood
the nature of the extended legal community involvement in the provision
of legal aid services and of discounted or pro bono services to other
members of the broader community. This extended community includes the
legal profession, community legal centres and specialist legal centres,
and a range of other legal and community services.
In failing to understand the complex structure in which such services
are provided, the Government may have thought that reducing funding to
one part of the structure would be overcome by additional contributions
from the other components. Evidence to the Committee suggested that the
other components are subject to funding and other pressures of their own.
They are increasingly unable, or in some cases, unwilling to fill the
gaps caused by the Commonwealth's unilateral action.
The Committee recommends that the National Legal Aid Council drafts
guidelines to cover the terms and conditions under which elements of the
legal aid community provide legal aid and related services. (Recommendation
19: p. 157)
The Committee recommends that there be full recognition of the
contribution made by the legal aid community to the provision of legal
services for the community, especially within the past two years. (Recommendation
20: p. 157)
Chapter 9 The effect on the wider community
Evidence to the Committee identified ways in which the legal aid system,
under the impact of funding restrictions, was failing to meet the needs
of specific communities - including those from non-English speaking backgrounds;
indigenous Australians; those with disabilities, and in some cases, the
aged. These effects included the lack of sufficient material targeted
at the most disadvantaged informing them of their rights and particular
problems experienced with legal aid in rural and regional Australia. The
Committee believes there is a need for the Commonwealth to take responsibility
for those who are particularly disadvantaged in the community, and to
recognise the special measures that are required to enable them to have
access to justice.
The Committee recommends that Commonwealth and state and territory
governments give priority to the provision of appropriate legal aid services
to meet the specific needs of different communities. (Recommendation
21: p. 166)
It is clear from numerous submissions that the legal aid system in Australia
is fundamentally incapable of providing access to justice for an increasing
number of Australians. This situation has significant implications for
the future of many in our society, and the values central to a liberal
democracy. A lack of effective access to justice leads inevitably to the
marginalisation of the law and to increasing irrelevance of the core democratic
institutions. It is not overly dramatic to assert that, legal aid is critical
to the maintenance of justice and the rule of law, and ultimately, democracy.
Chapter 10 Tax deductibility of legal expenses
The present law allows tax deductibility for litigation expenses incurred
in most circumstances by business, but similar deductions are seldom available
to non-business litigants. Evidence to the Committee disclosed a widespread
view that this law is inequitable, and represents a form of public subsidy
to one class of litigants at a time when adequate public assistance to
other classes of litigants is proving increasingly difficult to obtain.
The Committee found that there is a lack of reliable data on the value
of these deductions claimed each year. The Committee also found that there
is also only anecdotal information on whether the availability of the
deductions significantly affects business decisions on litigation, or
distorts the market for legal services.
The Committee notes that three major reports in 1994-95 proposed that
the current law be reviewed, and that no such review has taken place.
The previous Labour Government had taken preliminary steps to undertake
such a review prior to the last election. The Committee regards the present
Government's failure to progress the issue as unsatisfactory, given the
widespread view that the legal system is operating unfairly due to tax
deductibility.
The Committee recognises that if any such review is to be conducted,
it needs to consider a broad range of issues concerning economic, social
and taxation policy.
Accordingly, the Committee recommends that the availability of
tax deductibility for litigation expenses be reviewed in order to ensure
just and equitable tax treatment of those expenses. (Recommendation
22: p. 192)